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Facultative The right of option. The right of an underwriter to decide whether or not to accept a risk. Declarations under a cargo open cover are obligatory rather than facultative.
File-and-Use Rating Laws - State-based laws which permit insurers to adopt new rates without the prior approval of the insurance department. Usually insurers submit their new rates with supporting statistical data.
Financing Entity - Provides money for purchases.
Fine Print - A reference to imaginary small type in a policy document purportedly containing exclusions, reductions, exemptions, and limitations of coverage.
Fire - Means burning with flames.
Flat Line Re-insurance - A re-insurance which covers losses on the original policy up to a fixed amount, any excess being borne by the reinsured.
Floater - A separate policy available to cover the value of goods beyond the coverage of a standard renters insurance policy including movable property such as jewelry or sports equipment.
Floating Policy - A cargo policy with a fixed sum insured which is sufficient to cover more than one shipment; each shipment up to an agreed limit being declared as it takes place. The policy lapses when the sum insured has been exhausted by declared shipments. Such policies are seldom seen today.
Flood - Means the inundation or covering of normally dry land by water which: escapes or overflows from, or cannot enter, because it is full or has overflowed, or is prevented from entering, because other water has already escaped or been released from it, the normal confines of any watercourse or lake, including any that may have been modified by human intervention, or reservoir, canal, dam or storm water channel. Flood does not mean storm water run off from areas surrounding the site or water escaping from any water main, pipe, street gutter, guttering or surface. Many Home Insurance policies do not cover flood.
Follow the Fortunes - An agreement in a re-insurance contract whereby the re-insurer agrees to follow the decisions of the original insurer. Particularly important where ex gratia payments are made by the original insurer, which would not be recoverable from re-insurers in the absence of this agreement.
FPA Free of particular average.
Fraud - The term "fraud or dishonesty" encompasses all those risks of loss that might arise through dishonest acts or omissions.
Future Purchase Option - Life and health insurance provisions that guarantee the insured the right to buy additional coverage without proving insurability. Also known as "guaranteed insurability option."
