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SPECIFIC

An inland marine form that is designed to insure various specific items with a specific amount of insurance on each.  Any articles of unusual value may normally be written on such a form provided they are movable (so they may qualify as inland marine).  Such forms usually insure against many hazards or often are written against “all risks”.

A term used when it has been decided to assume one's own risk through internal financing mechanisms rather than to purchase insurance.

A provision in a policy whereby it will pay the price for which the owner expected to sell his merchandise instead of what it would cost him to replace.  Includes the merchant's profit.

When a policy is cancelled by the policyholder before it reaches its natural expiration, the company pays a return premium less than the proportionate or pro rata part that is still unearned.  The policy is cancelled “short rate,” not “pro rata”.

Insurance that is “specific” as opposed to “blanket.” That is, it describes what is insured more definitely, e.g., a policy covering “building and contents” would be blanket whereas one covering a certain amount on the building and another amount on the contents would be “specific”.

Insurance against the damage done by water leaking from automatic sprinklers and similar fire prevention devices.

When a risk is rated with a blanket rate, that is when a single rate is to cover more than one item or building, the rating bureau requires that the policyholder give the amount of value in each separate risk and usually in the contents of each so that a correct average may be arrived at.  The information required is a “statement of values”.

Merchandise for sale or in the process of manufacture as distinguished from furniture, fixtures or machinery.

A company wishing to protect itself in the event its net loss ratio for a given year rises above a certain percentage may buy reinsurance that pays in excess of that figure up to a higher agreed percentage beyond which the company is once more liable.  In short, a plan which ameliorates an above-average net loss ratio.

When a company pays a loss for which some person other than the policyholder is responsible, the company's right to recover its loss from the guilty party is the right of “subrogation”.

Damage due to the movement of the land on which property is situated.  A house built on the side of a hill may slide down the hill due to heavy rain or some similar cause.  Not earthquake damage.

Theunderwriter who guarantees something under a bond.

Originally a risk or part thereof where the interested broker or agent had no available market.  In recent years, the definition has broadened to describe any business normally  subject to state regulations as to rate and form written by a non-admitted insurer in accordance with the surplus line laws of the relevant state.