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MUNICIPAL INSURANCE *
A. GENERAL CRITERIA FOR INSURANCE
1. Generally, insurance is available for non-catastrophic types of loss
2. There has to be a large enough number of insurers to be able to predict a loss
3. Loss must be accidental and unforeseen
4. Loss should be monetarily measurable
5. Loss should be definite in time and place
6. Cost of insurance must be economical
B. INSURANCE IS TRANSFER OF RISK
1. From insured to insurer
2. Handled through contract (or policy)
3. Contract (policy) is a promise to pay money if a loss is sustained
C. MAJOR PARTS OF A POLICY
1. Insurer is the person (or company) issuing the policy (or contract)
2. Insured is the person or entity being insured
3. Premium is the price of the insurance policy or contract
4. Deductibles are amounts of money the insured is willing to pay in the event of a loss
5. Covered perils are those causes of loss (fire, theft, lightning, etc.)
6. Exclusions are those activities, individuals or items not covered by a policy
* Pennsylvania Department of Community and Economic Development, Home Study PLGSA
Program #11, AMunicipal Insurance/Risk Management.@
XIV-7