1. PERILS: A CAUSE OF PROPERTY LOSSES UNDER AN INSURANCE CON- TRACT EX: WINDSTORM, HURRICANE, EXPLOSION, COLLAPSE OF BUILD- ING, VANDALISM, ACCIDENTAL DISCHARGE, AND THEFT
2. LAW OF LARGE NUMBERS: A FUNDAMENTAL CONCEPT
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1. PERILS: A CAUSE OF PROPERTY LOSSES UNDER AN INSURANCE CON- TRACT EX: WINDSTORM, HURRICANE, EXPLOSION, COLLAPSE OF BUILD- ING, VANDALISM, ACCIDENTAL DISCHARGE, AND THEFT
2. LAW OF LARGE NUMBERS: A FUNDAMENTAL CONCEPT IN STATISTICS AND PROBABILITY THAT DESCRIBES HOW THE AVERAGE OF A RANDOM- LY SELECTED LARGE SAMPLE FROM A POPULATION. IT BASICALLY RE- LIES ON THE PRINCIPLE THAT THE LARGER THE POOL, THE MORE PRE- DICTABLE THE AMOUNT OF LOSSES WILL BE IN A GIVEN PERIOD
3. PRINCIPLE OF INDEMNITY: IS AN INSURANCE PRINCIPLE STATING THAT AN INSURED MAY NOT BE COMPENSATED BY INSURANCE COMPANY IN AN AMOUNT EXCEEDING THE INSURED'S ECONOMIC LOSS.
4. LIMITS OF LIABILITY: THE MAXIMUM AMOUNT THAT AN INSURANCE POL- ICY WILL PAY. IT IS SPECIFIED ON THE POLICY DECLARATION PAGE.
5. PROPERTY INSURANCE: COVERAGE FOR REAL AND PERSONAL PROP- ERTY AGAINST LOSS OR DAMAGE FROM PERILS INSURED AGAINST.
6. LOSS SETTLEMENT: THE PROCESS USED TO DETERMINE THE AMOUNT OF THE LOSS
7. ACTUAL CASH VALUE: THE VALUE OF THE PROPERTY BASED ON THE CURRENT COST TO REPLACE IT MINUS DEPRECIATION.
8. AGREED VALUE: THE AMOUNT THAT THE INSURED AND INSURER AGREE UPON DURING THE TIME OF POLICY INCEPTION.
9. REPLACEMENT COST: THE COST ASSOCIATED WITH REPLACING PROP- ERTY AT CURRENT MARKET PRICES
10. MARKET VALUE: THE AMOUNT THAT THE PROPERTY IS WORTH IN A COMPETITIVE MARKET. THIS AMOUNT IS ACCEPTED BY THE BUYER AND SELLER.
11. TORT: IS A WRONG THAT INVOLVES A BREACH OF CIVIL DUTY OWED TO SOMEONE ELSE. THIS BREACH DETERMINES IF THAT PERSON IS NEG- LIGENCE.
12. ELEMENTS USED TO DETERMINE NEGLIGENCE: A DUTY OWED, A DUTY BREACHED, PROXIMATE CAUSE, AND DAMAGES
13. METHODS TO DETERMINE LOSS ARE:: ACV, MARKET VALUE, REPLACE- MENT COST, AGREED VALUE
14. CASUALTY INSURANCE: PROTECTS A PERSON FROM FINANCIAL LOSS ARISING FROM BODILY INJURY OR PROPERTY DAMAGE TO OTHERS
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