+
Related Flashcards
Related Topics
Cards In This Set
| Front | Back |
|
Is an economic device utilized by individuals and organizations to
protect themselves against the risk of realizing unforeseen and
extraordinary financial losses.
|
Insurance
|
|
A company offering insurance.
|
Insurer
|
|
The individual or entity purchasing the insurance.
|
Insured
|
|
A good risk selection is one where the profit collected is greater than
the loss and expenses. This produces a profit for the insurer. The
process of selecting these “profitable” risks is called?
|
Underwriting
|
|
Defined as a legally enforceable agreement between two or more persons or parties.
|
Contract
|
|
In order for a contract to be legally binding, all the following conditions must be met:
|
Agreement, Consideration, Competent Parties, Legal Purpose.
|
|
All parties to a contract must agree to the terms of a contract. This is
usually specified by a signature to the terms of a contract.
|
Agreement
|
|
Each party must contribute something of value to the contract (for
example, Bob transfers ownership of his car to Kate and in exchange she
gives Bob $5,600).
|
Consideration
|
|
Both parties must have the legal capacity to enter into a
contract (for example, both parties must be 18 years of age for a
contract to be enforceable, and both parties must be of proper mental
capacity when they sign the contract).
|
Competent Parties
|
|
The subject / subjects of a contract must be of legal purpose (for
example, there can be no legally-binding contract to enforce the terms
of a drug deal!).
|
Legal Purpose
|
|
"Must Have" parts of a policy: All (or at least most) insurance policies will have these four components:
|
|
|
Always the first page of an insurance policy, and provides a general overview of the policy. Often referred to as the "dec page"
|
Declarations Page
|
|
The declarations page will include?
|
|
|
Is a common part of most policies. It carefully reviews all the terms
used in an insurance contract to ensure both parties agree to the
assignment of terms in the contract language.
|
Definitions Page
Nearly every definitions page will begin by clarifying the “you”, “we” and “us”, and who it specifically refers to in terms of the contract. The definitions page will also explicitly define important terms applicable to the policy. You may see heavily worded definitions for such simple terms as "collision", "decay", or "like, kind and quality." |
|
Contains provisions inserted in the policy that qualify or place limitations on an insurer's promise to pay or perform.
|
Conditions Page
If certain policy conditions or obligations are not met by the policyholder, the insurer establishes its right to deny a claim. |
