Abandonment: As used in property insurance, prohibits the insured from abandoning damaged property to the insurance company for repair or disposal
Accelerated Benefits Rider: An adjustment (rider) to a life insurance policy that allows for the early payment of some portion of the policy's face amount should the insured suffer from a terminal illness or injury.
Accidental Death Benefit Rider: An adjustment (rider) to a life insurance policy that provides for payment of an additional cash benefit when death occurs by accidental means. This amount depends on the value of the policy.
Accidental Death Insurance: An Insurance policy that provides payment if the insured's death occurs as a results from an accident.
Accounts Receivable Coverage: Covers loss of sums owed to the insured by its customers that are not collectible due to damage by an insured peril to accounts receivable records
Actual Cash Value (ACV): Cost to repair or replace damaged property with materials of like kind and quality, less depreciation Additional Insured: A person or organization for whom insured status is arranged by endorsement
Advertising Injury: General liability coverage that insures against libel, slander, invasion of privacy, copyright infringement and misappropriation of advertising in connection with the insured's advertising of its goods or services
Agent: An authorized representative of an insurance company.
Aggregate: The maximum amount an insurance company will pay during the policy
All Risk Coverage: Property insurance covering loss arising from all causes of loss except those that are specifically excluded
Annually Renewable Term: Term insurance that provides coverage for one year and allows the policy owner to renew his or her coverage each year.
Application: A form with the information needed for an insurance company to underwrite and rate a specific policy
Assignment Assignment: The transfer of ownership of a Life Insurance policy from one person to another.
Attained Age: Your current age. Your attained age is a factor life insurance companies use to determine premiums.
Audit: A verification of the financial records, usually payroll or receipts, of an organization to determine exposures and premiums
Automobile: A land motor vehicle, trailer or semi-trailer designed for travel on public roads, not including 'mobile equipment'
Bailee Coverage: Coverage on property left in the care of the insured for storage, repair or servicing
Basic Cause of Loss Form: Property coverage for named perils: Fire, Lightening, Explosion, Smoke, Windstorm, Hail, Riot, Civil Commotion, Aircraft, Vehicles, Vandalism, Sprinkler Leakage, Sink hold Collapse and Volcanic
Best's Rating: A rating system by A.M. Best Company giving the financial condition of insurance companies
Binder: A temporary insurance policy that expires at the end of a specific time period or when a permanent policy is written. A binder is given to an applicant for insurance during the time it takes the an insurance company to complete the policy paperwork.
Boiler & Machinery Insurance: Coverage for loss caused by mechanical or electrical equipment breakdown, including damage to the equipment
Bond: A written agreement in which one party, the surety, guarantees the performance or honesty of a second party, the principal (obligor), to the third party (obligee) to whom the performance or debt is owed
Broad Causes of Loss Form: Property coverage for the named perils: Fire, Lightening, Explosion, Smoke, Windstorm, Hail, Riot, Civil Commotion, Aircraft, Vehicles, Vandalism, Sprinkler Leakage, Sinkhole Collapse, Volcanic Action, Breakage of Building Glass, Falling Objects, Weight of Snow, Ice or Sleet, Water Damage (in the form of leakage from appliances) and Collapse from Specified Causes
Building Ordinance Coverage: Covers against loss caused by enforcement or ordinances or laws regulating construction and repair of damaged buildings Burglary: Theft of property by forcible entry, which is evidenced by visible signs, in a premises, by a person
Business Auto Policy: Auto Policy for businesses that includes auto liability and auto physical damage coverages
Business Income Coverage: Insurance covering loss of income by a business when operations are interrupted due to property loss that is a covered cause of loss
Business Owners Policy (BOP): A policy that combines property and liability coverages for special types of small businesses
Cancellation: The termination of an insurance policy usually before its expiration
Care, Custody or Control: An exclusion of liability insurance which eliminates coverage for damage to property in the insured's care, custody or control
Carrier: The insurance company which provides coverage
Claimant: The person presenting a claim
Claims Reserve: An amount of money set aside to meet claims reported but not paid
Collision Insurance: Provides for payment to a covered automobile resulting from the striking of another object by a moving vehicle
Commercial General Liability Policy (CGL): A coverage which protects business organizations against liability claims for bodily injury and property damage. Those claims may be the result of events at your place of business, from your business operations, the products or services you make or do, communications or advertisements your business broadcasts
Comprehensive Auto Coverage: Covers an automobile for loss or damage for all causes except for those specifically excluded
Conditions: Things agreed upon in an insurance policy that state the rights and the requirements of the insured and the insurer
Consequential Loss: An indirect loss such as the reduction in value of property that is the result of a direct damage loss
Contingent Beneficiary: Person or persons designated to receive the value of an insurance policy in case the original beneficiary is not alive.
Contract: An agreement between two or more parties with characteristics of mutual assent, competent parties, a valid consideration and legal subject
Convertible Term: A policy that may be changed to another form by contractual provision and without evidence of insurability. Most term policies are convertible into permanent insurance.
Death Benefit: The amount of money paid to the beneficiary when the insured person dies.
Deductible: The amount of loss which is paid or absorbed by the insured prior to determining the insurance company's liability
Earned Premium: The amount of premium that has been used for certain periods of time
Effective Date: The date on which an insurance binder or policy goes into effect
Endorsement: A document attached to an insurance policy that changes the original policy provisions
Exclusions: Specified hazards listed in a policy for which benefits will not be paid.
Face Amount: The amount covered by the terms of an insurance contract, usually found on the first page of the policy.
Final Expenses: Expenses incurred at the time of a person's death. These include but are not limited to:funeral costs, court expenses, current bills or debt, mortgages, loans and taxes.
Fine Arts Coverage: Property insurance for works of art
Flood Coverage: Coverage for damage to property caused by flood
Funeral Expenses: Expenses including casket, vault, grave plot, headstone and funeral director.
Grace Period: Period of time after the due date of a premium during which the policy remains in force without penalty.
Gross Vehicle Weight (GVW): The weight specified by a manufacturer for the maximum total loaded weight of a single vehicle
Guaranteed Term: A form of renewable term insurance that remains in force as long as the premiums are paid on time. With guaranteed term insurance, the insurance company cannot terminate the policy during the term.
Hold Harmless Agreement: A contractual agreement that requires one contracting party to assume certain legal liabilities of the other party
Insurance: A formal social device for reducing risk by transferring the risks of several individual entities to an insurer. The insurer agrees, for a consideration, to pay for the loss in the amount specified in the contract.
Insurance Policy: The printed form which serves as the contract between an insurer and an insured.
Insured: The party who is being insured.
Insurer: The insurance company; Party that provides insurance coverage, typically through a contract of insurance.
Lapse: Termination of a policy due to the policy owner's failure to pay the premium within the grace period.
Lessee: The person to whom a lease is granted
Lessor: The person granting the lease
Liability: The legal obligation to pay a monetary award for injury or damage caused by one's negligent or statutorily prohibited action.
Life Insurance: Insurance coverage that pays out a set amount of money to specified beneficiaries upon the death of the individual who is insured.
Limit of Liability: The most an insurance company agrees to pay in the case of loss
Loss: The amount an insurance company pays for damages under the terms of a policy
Loss Payable Clause: An insurance clause that authorizes loss payments to a person or entity having an insurable interest in the covered property
Loss Ratio: Percentage of losses incurred against earned premiums
Loss Report: A form showing reported claims which provides information such as the date of occurrence, type of claim, amount paid and amount reserved for each loss
Loss Reserve: An estimated amount set aside for a particular claim that has not yet been paid
Medical Payments, Auto: Coverage, which is optional, under an auto policy to pay for medical expenses for bodily injury caused by an auto accident, regardless of fault.
Mexico Coverage: Coverage which is sometimes provided under automobile policies for the operation of an insured motor vehicle within Mexico, usually limited to a stated number of miles from the U.S. border
Minimum Premium: The lowest amount of premium to be charged for providing a particular insurance coverage
Mobile Equipment: Equipment such as earth movers, tractors, diggers, farm machinery, forklifts, etc., that even when self-propelled, are not considered as automobiles for insurance purposes
Mortgage Clause: Property insurance provisions granting protection for the mortgagee named in the policy. It establishes that loss to mortgaged property is payable to the insured and to the mortgagee named in the policy
National Flood Insurance Program: A federally funded program established to make flood insurance available to properties located in participating communities
Non admitted Insurer: An insurance company that is not licensed to do business in a specific state. The insurers may write coverage through an excess and surplus lines broker that is licensed in these jurisdictions
Occurrence: A continual, gradual or repeated exposure to substantially the same general harmful conditions. General liability policies insure liability for bodily injury or property damage that is caused by an occurrence
Package Policy: A policy providing several different coverages combined into one policy. Refers to a policy providing both general liability insurance and property insurance
Personal Auto Policy (PAP): A policy insuring private-passenger autos owned by individuals
Personal Injury: A General Liability coverage for insurable offenses that cause harm, other than bodily injury, such as false arrest, detention or imprisonment, malicious prosecution, wrongful eviction, slander, libel and invasion of privacy
Personal Property: All tangible property not classified as real property such as contents
Policy: The printed document given to the insured, outlining the terms and conditions of the Insurance coverage.
Policy Fee: A one-time charge per policy that does not change with the size of the premium
Policy Period: The term or duration of a policy including the effective and expiration dates
Premises: The location where coverage applies
Premises-Operations: A category of hazard ordinarily insured by a general liability policy which is composed of those exposures to loss that fall outside the defined 'products-completed operations hazard,' including liability for injury or damage arising out of the insured's premises or out of the insured's business operations while such operations are in progress
Premium: The agreed upon payment made to keep an insurance policy in force
Primary Beneficiary: In life insurance, the beneficiary designated by the insured as the first to receive policy benefits.
Primary Policy: The insurance policy that pays first when you have a loss that's covered by more than one policy.
Pro Rata Cancellation: The cancellation of an insurance policy with the return premium being the full proportion of premium for the unexpired term of the policy, without penalty for early cancellation
Product: Items manufactured, sold, handled, distributed or disposed of by the named insured or others involved with the named insured in the course of their business. Includes containers, parts and equipment, product warranties and provision of or failure to provide instructions and warnings
Product Liability: The liability for bodily injury or property damage a merchant or manufacturer may incur as a consequence of some defect in the product sold or manufactured
Products-Completed Operations: General Liability coverage for liability arising out of the insured's products or business operations conducted away from the insured's premises once those operations have been completed
Professional Liability: Coverage designed to protect professionals such as physicians and real estate brokers, against liability incurred as a result of errors and omissions in performing professional services
Property Damage: In the general liability policy, a physical injury to property, resulting in the loss of use
Real Property: Real estate including buildings
Reinstatement: Putting a lapsed policy back in force by producing satisfactory evidence of insurability and paying any past-due premiums required.
Renewal Policy: A policy issued to replace an expiring policy
Rents or Rental Value Insurance: Insurance that reimburses a building owner for loss of rental income due to damage by an insured peril
Representation: Statements made by applicants on their applications for insurance that they represent as being substantially true to the best of their knowledge and belief but that are not warranted as exact in every detail.
Robbery: Theft of property while force is used or threatened
Secondary Beneficiary: An alternate beneficiary designated to receive payment, usually in the event the original beneficiary predeceases the insured.
Short-Term Cancellation: Cancellation of an insurance policy prior to the expiration date in which a penalty in the form of a less than full pro-rata premium refund is allowed
Special Causes of Loss Form: A cause of loss form providing coverage from all causes of loss unless specifically excluded or limited
Specified Causes of Loss Coverage: Auto physical damage coverage only for losses caused by the perils listed in the policy
Surplus Lines Insurance: Insurance written by insurers not licensed in the states where the risks are located and placed with such insurers under the surplus line laws of the various states. Before such placements can be made through specially licensed surplus line agents and brokers, state laws generally require evidence reported before some predetermined future date ('sunset')
Term Insurance: Protection during limited number of years; expiring without value if the insured survives the stated period, which may be one or more years but usually is five to twenty years, because such periods usually cover the needs for temporary protection.
Umbrella Liability Policy: A policy designed to provide additional protection against catastrophic losses covered under liability policies. It provides excess limits when the limits of the underlying liability policies are used up by the payment of claims and it drops down and picks up where the underlying policy leaves off when the aggregate limit of the underlying policy in question is exhausted by the payment of claims. It also provides protection against some claims not covered by the underlying policies, subject to a self-insured retention
Underinsured Motorists Coverage: Provides coverage for bodily injury for losses incurred by an insured when an accident is caused by a motorist who does not have sufficient insurance limits
Underlying Coverage: The insurance or coverage in place on the same risk that will respond to loss before the excess policy is called on to pay any portion of the claim
Underwriter: Company receiving premiums and accepting responsibility for fulfilling the policy contract. Also, company employee who decides whether the company should assume a particular risk; or the agent who sells the policy
Universal Life: An interest-sensitive life insurance policy that builds cash values. The premium payer has control over how the policy is structured. He/she has the flexibility to eliminate the premiums (essentially pay up the policy and pay no more premiums) or have the premiums continue for life. It is a matter of juggling three variables: the assumed interest rate, the cash value and the premium payment plan. The policy is interest-sensitive, and if interest rates change from the assumed interest, it will affect the other two variables. In the past, many Universal Life Policies were structured assuming a higher interest rate then was actually received, therefore, most of them have under performed. If you have a Universal Life Policy, you should have it evaluated.
Unearned Premium: That portion of the policy premium that represents the unexpired policy term
Uninsured Motorist Coverage: Provides coverage for bodily injury for losses incurred by an insured when an accident is caused by a motorist who is not insured
Vacancy Provision: Property insurance provision found in commercial property policies that restrict coverage in connection with buildings that have been vacant for a specified number of days, usually 60 days
Valuable Papers and Records Coverage : Coverage that pays the cost to reconstruct damaged or destroyed valuable papers and records and usually includes almost all forms of printed documents or records except money or securities; data processing programs, data and media are usually excluded
Waiver of Premium: Rider or provision included in most life insurance policies exempting the insured from paying premiums after he or she has been disabled for a specified period of time, usually six months.
Whole Life Insurance: Life insurance that is kept in force for a person's whole life as long as the scheduled premiums are maintained. All Whole Life policies build up cash values. Most Whole Life policies are guaranteed as long as the scheduled premiums are maintained.
Workers' Compensation: Protection which provides benefits to employees for injury or contracted disease arising out of and in the course of employment. Most states have laws which require such protection for workers and prescribe the length and amount of such benefits provided