Property & Casualty Vocabulary PDF

Unit 2 Vocab Words Contract : a legal agreement between two competent parties that promises a certain performace in exchange for a certain consideration Competent parties : A contract is not valid unless it contains two parties who are considered competent under t...

Unit 2 Vocab Words Contract : a legal agreement between two competent parties that promises a certain performace in exchange for a certain consideration Competent parties : A contract is not valid unless it contains two parties who are considered competent under the law Legal purpose : A contract that is against public policy or in violation of the law is not enforcable Consideration : a thing of value exchanged for the performace promised in the contract Offer + Acceptance : The contract invovles two parties : 1 who makes an offer and 1 who accepts it. (Agreement) Principle of Indemnity : WHEN A LOSS OCCURS, AN INDIVIDUAL SHOULD BE RESTORED TO THE APPROXIMATE FINACIAL CONDITION HE WAS IN BEFORE THE LOSS, NO MORE AND NO LESS. Personal Contract : An insurance contract does not insure property; it insures the person who owns the property Aleatory : the insurance company is contingent on an uncertain event (a loss) that provides for unequal transfer of value between the parties Adhesion contracts : sticking to oneʼs words; one party has greater power over the other party in drafting the contract Doctrine of Reasonable Expectations : states that a policy includes coverages that an average person would reasonly expect it to include, reguardless of what the policy actually provides Unilateral : one sided promise Contract of Utmost Good Faith : The insurance company relies on truthfulness & integrity of the applicant when issuing a policy and the The insured relies on the companys promise & ability to provide coverage and pay claims Conditional contract : Conditions that both the insured and the insurer must comply with The Declarations : name of insured, the address, the amount of coverage provided, a description of property, & the cost of the property The Insuring Agreements : states in general what is to be covered & describes the type of propety covered The Conditions : responsibilties + obligations of insurance company & insured The Exclusions : describe the losses for which the insured is not covered The Defintions : clarifies the meanings of certain terms used in policy