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| Monday, April 23, 2007 05:34:54 PM | Glossary | |||||||||||||||||||||||
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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 uncollectible 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 factors 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'
Backdating:
Making the effective date of a policy earlier than the date of
application. Backdating is often used to make the age of the
applicant lower than it actually was at the time of application
so that he/she can get a lower premium. State laws often set
limits to this.
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 Action
Basic Limits:
The minimum limits of liability that can be carried by an
insured
Beneficiary:
The designated person set to receive the death benefit if the
insured should die.
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.
Bodily Injury by Accident Limit:
The most an insurer will pay under Part Two of a Workers'
Compensation Policy for claims arising out of any one accident,
regardless of how many employee claims arise out of the accident
Bodily Injury by Disease, Each Employee
: The most an insurer will pay under Part Two of a Workers'
Compensation Policy for damages due to bodily injury by disease
to any one employee
Bodily Injury by Disease-Policy Limit
: The most an insurer will pay under Part Two of a Workers'
Compensation Policy employee bodily injury by disease claims
during the policy period regardless of the number of employees
who make such claims
Bodily Injury Liability Limit:
The insured is legally liable for damages due to bodily injury,
sickness, or disease, including resulting death
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
Brands and Labels Endorsement:
Property insurance coverage that allows the insured to remove
labels from damaged goods or mark the items as 'salvage,'
provided the goods are not damaged in the process
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 Interruption Coverage:
See Business Income Coverage
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
Cash Benefits:
The Money that is paid to the policy holder upon settlement of a
covered claim.
Cash Value:
The equity amount or "savings" accumulation in a whole life
insurance policy.
Casualty Insurance:
Insurance that covers loss caused by injuries to persons and the
legal liability imposed on the insured for injury or for damage
to property of others
Catastrophe:
A severe loss causing sizable financial loss
Causes of Loss Forms:
The commercial property forms that define the covered causes of
loss for which coverage is provided. Commonly, there are 3 Cause
of Loss Forms: Basic, Broad and Special
Certificate of Insurance:
A document providing evidence that insurance has been purchased
Claim:
A request by a policyholder or a claimant for payment under a
policy of insurance
Claim Expense:
Expenses of settling or investigating a claim
Claimant:
The person presenting a claim
Claims Reserve:
An amount of money set aside to meet claims reported but not
paid
Class:
A group of businesses who have common or similar exposures and
are grouped together for rating purposes
Classification:
The arranging or establishing of business groups or categories
for rating purposes
Coinsurance Provision:
An insurance provision for property coverages in which the
policyholder must carry an amount of insurance that is at least
equal to a set percentage of the value of the property in order
to receive full payment of a loss
Collapse:
Collapse of a building and collapse of personal property within
a building due to specified causes (such as weight of snow, ice
or rain). Does not include collapse due to design error or due
to faulty workmanship or materials if the collapse occurs after
construction is complete
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
Competitive State Funds:
State-owned and operated facilities that write Workers'
Compensation Insurance solely for that state
Completed Operations:
A General Liability coverage for the work of the insured that
has been completed away from the business premises
Comprehensive Auto Coverage:
Covers an automobile for loss or damage for all causes except
for those specifically excluded
Compulsory Insurance:
Insurance that is required by law
Concealment:
Failure to disclose facts which may void an insurance policy
Conditional Receipt:
Given to policy owners when they pay a premium at the time of
the application. These receipts bind the insurance company,
provided your policy is approved, but are subject to any other
conditions stated on the receipt.
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
Constructive Total Loss:
Term used when damage to property is more than the value of the
property
*Contestable Clause:
A provision in an insurance policy setting forth the conditions
or time period under which the insurance company may contest or
void the policy. After this time has lapsed, typically two
years, the policy cannot be contested. Example: Suicide.
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
*Coverage:
Coverage is just another term for Insurance. It can be used to
mean either the dollar amounts of insurance purchased ($500,000
of liability coverage), or the type of loss covered (coverage
for theft).
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.
Countersignature:
The signature of a licensed agent or representative on a policy
that is required to validate the policy
Cross-Purchase Plan:
An agreement that provides that upon a business owner's death,
surviving owners will purchase the deceased's interest, often
with funds from life insurance.
Cumulative Injury:
A type of injury which occurs from the repetition of tasks over
an extended length of time
Data Processing or EDP Coverage:
All risk property insurance for electronic data processing
equipment (computers), computer programs and data including
mechanical breakdown, electrical injury and changes in
temperature and humidity
Death Benefit:
The amount of money paid to the beneficiary when the insured
person dies.
Decreasing Term Insurance:
Term life insurance on which the face value slowly decreases in
scheduled steps from the date the policy comes into force to the
date the policy expires, while the premium remains level. The
intervals between decreases are usually monthly or annually.
Debris Removal:
The cost of removal of debris from covered property damaged by
an insured peril
Deductible:
The amount of loss which is paid or absorbed by the insured
prior to determining the insurance company's liability
Deposit Premium:
The amount of premium required at the beginning of a policy
prior to the actual premium being determined
Depreciation:
The reduction in value of property over a period of time.
Usually as a result of age, wear and tear, or economic
obsolescence
Direct Damage:
Causes of loss that produce direct and straightforward property
damage (without interruption in time or deviation in space) from
the cause of the event to the damaged property
Double Indemnity:
Payment of twice the basic benefit in the event of loss
resulting from specified causes or under specified
circumstances.
Driver Other Car Endorsement:
An endorsement that can be added to an automobile policy that
gives protection while the insured designated in the endorsement
is driving a car other than the one named in the policy
Drop Down Provision:
A clause used in Umbrella policies providing that the Umbrella
will 'drop-down' over underlying policy aggregate limits when
they have been reduced or exhausted
Earned Premium:
The amount of premium that has been used for certain periods of
time
Earth Movement or Earthquake Exclusion:
An exclusion found in most property insurance policies
eliminating coverage for earth movement or earthquake, except
ensuing fire
Effective Date:
The date on which an insurance binder or policy goes into effect
Electrical Damage or Injury Exclusion:
An exclusion usually contained in property insurance policies
eliminating coverage for damage to electrical appliances caused
by artificially generated currents, except for ensuing fire or
explosion
Employee Dishonesty Coverage:
Coverage for theft of money, securities or property by an
employee
Employee Leasing:
A staffing method which an employee leasing company provides all
or most of its client's employees
Employers Excess Indemnity Insurance:
Insurance coverage purchased by employers that do not subscribe
to the Texas Workers' Compensation law
Employers Liability Coverage:
Part 2 of the Workers' Compensation policy which pays on behalf
of the employer all sums that the employer becomes legally
obligated to pay because of bodily injury by accident or disease
sustained by any employee of the insured arising out of and in
the course of his employment by the insured
Employment Practices Liability Insurance:
A form of liability insurance covering wrongful acts arising
from employment practices such as wrongful termination,
discrimination and sexual harassment
Endorsement:
A document attached to an insurance policy that changes the
original policy provisions
Equipment Floater:
A property insurance coverage for equipment that is often moved
from place to place
Estimated Premium:
A preliminary premium amount that could be adjusted based on a
variance in exposures
Evidence of Insurability:
Any statement or proof of a person's physical condition,
occupation, etc., affecting acceptance of the applicant for
insurance.
Excess and Surplus Lines Insurance:
Coverage that is provided by insurers not licensed in the states
where the risk is located
Excess Liability Policy:
A policy that provides additional limits in excess of an
underlying liability policy
Exclusions:
Specified hazards listed in a policy for which benefits will not
be paid.
Expected or Intended:
An exclusion for injury or damage that is expected or intended
Expediting Expense Coverage:
Coverage providing reimbursement of expenses for temporary
repairs and costs incurred to speed up the permanent repair or
replacement of covered property or equipment
Expense Constant:
A small flat expense charged to Workers' Compensation policies
Experience Modifier:
A debit or credit factor developed by measuring the difference
between the insured's actual past experience and the expected or
actual experience of the class of business
Expiration:
The ending date of an insurance policy
Exposure Base:
The basis of rates that are applied to determine premium. Some
exposures may be measured by payroll, receipts, sales, square
footage, area, man-hours or per unit
Extra Expense Coverage:
Coverage for reimbursement of expenses in excess of normal
operating expenses that are incurred to continue operations
after a direct damage loss
Extraterritorial Coverage:
The coverage for extending workers' compensation law to provide
benefits for workers hired in one state but injured while
working in another state
Face Amount:
The amount covered by the terms of an insurance contract,
usually found on the first page of the policy.
Fiduciary Liability:
The liability placed on trustees, employers, fiduciaries and
professional administrators with respect to errors and omissions
in the administration of employee benefit programs
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
Fire Department Service Charge Coverage:
Coverage in a property insurance policy for charges incurred by
the insured from a fire department for their services in
fighting a fire
Fire Legal Liability Coverage:
Liability coverage for the insured's legal liability for fire
damage to premises rented by the insured
Fire Wall:
A wall designed to prevent the spread of fire from one part of a
building to another
Firewall:
A computer that protects a company's private network from
outside internet users
Fixed Benefit:
A death benefit, the dollar amount of which does not vary.
Flat Cancellation:
The full cancellation of a policy as of the effective date of
coverage which requires the return of paid premium in full
Flood Coverage:
Coverage for damage to property caused by flood
Flood Exclusion:
A provision in most all property insurance policies eliminating
coverage for damage by flood and possibly other types of water
damage, such as seepage and sewer backup
Follow Form:
An umbrella policy provision that follows the underlying policy
for coverages and policy provisions
Forgery or Alteration Coverage:
Covers loss due to the dishonesty of writing, signing or
altering of checks and bank drafts
Fortuitous Event:
An event that is subject to chance without the implication of
suddenness
Free Look:
Trial period required in most states where policy owners have up
to 20 days to examine their new policies with no obligation.
Frequency:
The number of times that a loss will occur within any given
period of time
Full Coverage:
Any form of insurance that provides payment in full of all
losses caused by the perils insured against without applying a
deductible or depreciation
Funeral Expenses:
Expenses including casket, vault, grave plot, headstone and
funeral director.
Garage Liability Insurance:
Insurance coverage for the legal liability of automobile
dealers, garages, repair shops and service stations for bodily
injury and property damage arising out of their business
operations
Garage-keepers Coverage:
Provides coverage to owners of storage garages, parking lots and
body and repair shops for their liability of damage to
automobiles left in their custody for safekeeping or repair
General Aggregate Limit:
The maximum amount of insurance payable during the policy period
for losses (other than those arising from the products -
completed operations hazards as covered under the standard
commercial general liability policy)
General Liability Insurance:
Insurance protecting businesses from most liability exposures
other than automobile and professional liability
Glass Insurance:
A property insurance policy covering breakage of building glass
regardless of cause
Governing Classification:
In Workers' Compensation Insurance, the classification that best
describes the workers' compensation exposure of an employer's
business
Grace Period:
Period of time after the due date of a premium during which the
policy remains in force without penalty.
Graded Premium Policy:
A type of whole life policy designed for people who want more
life coverage than they can currently afford. They pay a lower
premium rate that increases gradually over the first three to
five years and then remains constant over the life of the
policy.
Gross Negligence:
Willful and wanton misconduct
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.
Hired Automobile:
An automobile whose exclusive use has been temporarily given to
another for a monetary sum or other consideration. The business
auto definition of 'hired autos,' however, includes autos
borrowed except those borrowed from employees or partners
Hold Harmless Agreement:
A contractual agreement that requires one contracting party to
assume certain legal liabilities of the other party
Host Liquor Liability:
Liability coverage for hosts of business or social functions
arising out of the serving or distribution of alcoholic
beverages by a party not engaged in this activity as a business
enterprise
Improvements and Betterments:
Additions or changes made by a lessee at his own expense to
property that may not legally be removed. Usually covered under
the tenants property coverage
Incontestable Clause:
A clause in a policy providing that a policy has been in effect
for a given length of time (two or three years), the insurer
shall not be able to contest the statements contained in the
application. In life policies, if an insured lied as to the
condition of his health at the time the policy was taken out,
that lie could not be used to contest payment under the policy
if death occurred after the time limit stated in the
incontestable clause.
Incurred Losses:
The amount of paid claims and loss reserves within a particular
period of time, usually a policy year. Customarily computed as
losses incurred during the period, plus outstanding losses at
the end of the period, less outstanding losses at the beginning
of the period
Independent Adjuster:
A claims adjuster who provides adjustment services to insurance
companies but is not employed by them
Independent Contractor:
An individual or company who has agreed, in writing, with
another party to perform a job or function on behalf of that
party
Inflation Guard Provision:
A provision that increases the limit of insurance by a specified
percentage over a specified period of time to offset inflation
costs
Insurability:
The condition of the individual wishing to be insured, including
their health, susceptibility to injury and life expectancy.
Insurance:
A formal social device for reducing risk by transferring the
risks of several
Insurance Policy:
The printed form which serves as the contract between an insurer
and an insured.
Insurance to Value:
Insurance written in an amount equal to the value of the
property or which meets coinsurance requirements
Insured:
The party who is being insured. In life insurance, it is the
person because of his or her death the insurance company would
pay out a death benefit to a designated beneficiary.
Insurer:
The insurance company; Party that provides insurance coverage,
typically through a contract of insurance.
Irrevocable Beneficiary:
A beneficiary that cannot be changed without that beneficiary's
consent.
Increasing Term Insurance:
Term life insurance in which the death benefit increases
periodically over the policy's term. Usually purchased as a cost
of living rider to a whole life policy.
Joint Venture:
A business relationship when two or more persons join their
labor or property for a business undertaking and share profits
Lapse:
Termination of a policy due to the policy owner's failure to pay
the premium within the grace period.
Leasehold Interest:
Property insurance covering the loss suffered by a tenant due to
termination of a lease because of damage to the leased premises
by a covered loss
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
Liberalization Clause:
A provision within an insurance policy that broadens the
coverage if the insurance company offers a broader coverage form
within the first 45 days of coverage
Lien:
An obligation that can be held by an individual who has an
interest in a particular matter or property
Life Expectancy:
The average number of years a person is expected to live based
on a national average per age group, and other factors.
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
Limited Pay Policy:
A type of whole life insurance designed to let the policyholder
pay higher premiums over a specific time period such as 10 or 20
years so that they won't have to pay any premiums for the rest
of his or her life.
Long-shore and Harbor Workers' Compensation Act:
A federal law that provides workers' compensation benefits to
employees of a vessel injured in maritime employment - usually
in loading, unloading, repairing or building a vessel - but not
applicable to crew members
Loss:
The amount an insurance company pays for damages under the terms
of a policy
Loss Adjustment Expense:
The cost assessed to a particular claim for investigating and
adjusting that claim
Loss Constant:
A flat charge added to the premium of small workers'
compensation policies to offset higher loss ratios
Loss Control:
A technique that is put in place to reduce the possibility that
a loss will occur or reduce the severity of those that do occur
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
Lost Policy Release:
A signed statement by the named when the insured wishes to
cancel the policy, but has lost or mislaid the policy, which
releases the insurance company from all liability or losses
Medical:
A document completed by a physician or another approved examiner
and submitted to an insurer (insurance company) in order to
provide medical information. This is usually done to determine
insurability (or lack of insurability) or is sometimes done in
relation to a claim.
Medical Expenses:
Reasonable charges for medical, surgical, x-ray, dental,
ambulance, hospital, professional nursing, prosthetic devices,
and funeral expenses. What is considered reasonable is outlined
in a policy.
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. Coverage for persons other than the named
insured and his or her family members is typically restricted to
circumstances when they are occupants of the insured auto
Medical Payments, General Liability:
A general liability coverage that reimburses others, regardless
of fault, for medical or funeral expenses incurred as a result
of bodily injury or death sustained by an accident
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
Misrepresentation:
The act of knowingly presenting false information.
Mobile Equipment:
Equipment such as earthmovers, tractors, diggers, farm
machinery, forklifts, etc., that even when self-propelled, are
not considered as automobiles for insurance purposes
Monopolistic State Funds:
States or Jurisdictions where an employer must obtain workers'
compensation insurance from a state fund or qualify as a
self-insurer, as is allowed in five of the states: North Dakota,
Ohio, Washington, West Virginia, Wyoming, Puerto Rico and the
U.S. Virgin Islands
Mortality Rate:
The number of deaths in a group of people, usually expressed as
deaths per thousand.
Mortality Table:
A table showing the incidence of death at specified age groups.
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
Named Perils Coverage:
A property insurance term referring to exact causes of loss
specifically listed as covered
National Flood Insurance Program:
A federally funded program established to make flood insurance
available to properties located in participating communities
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
Non-Owned Automobile:
In commercial auto policies, coverage for autos that are used in
connection with the named insured's business but are neither
owned, leased, hired, rented or borrowed by the named insured.
The term specifically applies to vehicles owned by employees and
used for company business
Non-subscription:
A Workers' Compensation term used in Texas that refers to
employers who choose to be out of the workers' compensation
system. Firms that are proven negligent in causing a worker's
injury, can be held liable in tort, since non-subscribing
employers waive the traditional common law defenses available to
employers subject to workers' compensation laws
Original Age:
The age you were when you bought an insurance policy.
Other Insured Rider:
The temporary addition to an insurance policy, usually a member
of the direct family.
Ownership:
All rights, benefits and privileges under life insurance
policies are controlled by their owners. Policy owners may or
may not be the insured. Ownership may be assigned or transferred
by written request of current owner.
Occupational Hazard:
A condition in the workplace that increases the chances of the
an accident, sickness, or death. It usually will mean higher
premiums.
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
Payroll Limitation:
A limit on the amount of payroll for certain classifications
used for the development of premium
Peril:
Cause of loss such as fire, windstorm, collision, etc.
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 Injury Protection (PIP):
An automobile insurance coverage mandated by law in some states.
The statutes typically require insurers to provide or offer to
provide first-party benefits for medical expenses, loss of
income, funeral expenses and similar expenses without regard to
fault
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 Holder:
The person who owns a life insurance policy. This is usually the
insured person, but it may also be a relative of the insured, a
partnership or a corporation.
Policy Period:
The term or duration of a policy including the effective and
expiration dates
Pollutant:
An irritant or contaminant, whether in solid, liquid, or gaseous
form, including smoke, vapor, soot, fumes, acids, alkalis,
chemicals and waste
Preferred Risk:
A positive characteristic of someone seeking to be insured.
Usually means a better likely hood for long life, and usually
means a lower premium.
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, usually a monthly payment.
Premium Flexibility:
The policy holder's right to vary the amount of premium paid
each
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
Property Insurance:
First-party insurance for real and personal property against
physical loss or damage
Provisions:
Details of an insurance policy which explain the benefits,
conditions and other features of the insurance contract.
Real Property:
Real estate including buildings and vegetation
Re-entry Option:
An option in a renewable term life policy under which the policy
owner is guaranteed, at the end of the term, to be able to renew
his or her coverage without evidence of insurability, at a
premium rate specified in the policy.
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
Replacement:
A new policy written to take the place of one currently in
force.
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.
Return Premium:
The amount of premium due the insured should the actual cost of
a policy be less than the insured previously paid
Rider:
An attachment to a policy that modifies its conditions by
expanding or restricting benefits or excluding certain
conditions from coverage.
Risk:
The chance of injury, damage, or loss.
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
Single Premium Policy:
A whole life policy for people who want to buy a policy for a
one-time lump sum, and then be covered for the rest of their
lives without paying any additional premiums.
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
Sprinkler Leakage Coverage:
Coverage for property damage caused by the accidental discharge
or leakage of water from automatic sprinkler systems or other
fire prevention devices
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')
Time Element Insurance:
A term referring to property coverage for loss of earnings or
income resulting from the inability to put damaged property to
its normal use
Term Insurance:
Protection during limited number of years; expiring without
value if the
Term:
Period for which the policy runs. In life insurance, this is to
the end of the term period for term insurance.
Third-Party Owner:
A policy owner who is not the prospective insured. The policy
owner and the insured may be, and often are the same person. If
for example, you apply for and are issued an insurance policy on
your life, then you are both the policy owner and the insured
and may be known as the policy owner-insured. If, however, your
mother applies for and is issued a policy on your life, then she
is the policy owner and you are the insured.
Transit Coverage:
Coverage on the insured's property while in transit from one
location to another, over land
Umbrella Liability Policy:
A policy designed to provide additional protection against
catastrophic losses covered under liability policies, such as
the business auto policy, commercial general liability policy,
watercraft and aircraft liability policies and employers
liability coverage. 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, and in some states property
damage, 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
Uninsurable Risk:
A person who is not acceptable for insurance due to excessive
risk.
Universal Life:
An interest-sensitive life insurance policy that builds cash
values. The premium payer has control over how the policy is
structured. He 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 to see if it needs
Unearned Premium:
That portion of the policy premium that represents the unexpired
policy term
Uninsured Motorist Coverage:
Provides coverage for bodily injury, and in some states property
damage, for losses incurred by an insured when an accident is
caused by a motorist who is not insured
Utility Service Interruption Coverage:
Coverage for the loss to an insured due to lack of incoming
electricity which was caused by damage from a covered cause of
loss, such as a fire or windstorm, to property away from the
insured's premises - usually the utility generating station.
Also referred to as 'off-premises power coverage'
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.
Waiver of Subrogation:
Also known as 'transfer of rights of recovery,' the
relinquishment by an insurer of the right to collect from
another party for damages paid on behalf of the insured
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. The
variable in a Whole life Policy is the dividend which could vary
depending on how well the insurance is doing. If the company is
doing well and the policies are not experiencing a higher
mortality than projected, premiums are paid back to the policy
holder in the form of dividends. Policyholders can use the cash
from dividends in many ways. The three main uses are: it can be
used to lower or vanish premiums, it can be used to purchase
more insurance or it can be used to pay for term insurance.
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. |
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