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 poicy 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, Sinkhold 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 Garagekeepers
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
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. 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. Longshore
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 Nonadmitted
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 Nonowned
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 Nonsubscription:
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 nonsubscribing
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 workkplace 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 characterisic 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
month. 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
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. 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
to have the premiums adjusted to get
it back on track. A fourth variable that has not been a factor but could be in
the future, and the owner should be aware of, is the Mortality variable. Universal
Life policies are usually structured assuming current mortality rates. The insurance
companies reserve the right to change those rates. 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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