GLOSSARY

The amount that the property in question could have been sold for by the insured on the date of the loss. Computed on the basis of replacement value less its depreciation by obsolescence or general wear.

Some person, other than the original named insured, who is entitled to protection under a policy either by virtue of the wording of the basic policy or because the policy has been modified to protect such interest.

Refers to physical injury, sickness, or disease, or death, subject to any definitions or limitations in the policy.

The legal obligation that stems from the injury or death of another person.

A demand or notice of a right or alleged right of any party to recover from an insurance company due to a loss covered by the policy

This means having a wide scope, including many things. It does not mean including everything. Thus, a comprehensive liability policy is not an all-risk liability policy; there are a number of exclusions. However, it does provide far more protection than a scheduled policy. Often referred to as “comp.”

A person entitled to receive policy benefits if the primary beneficiary is deceased at the time benefits become payable.

The specific protection provided by the policy against the results of the hazards insured against.

Statements made by the applicant relating to the risk. In casualty insurance, the declarations are frequently made a part of the policy – included in this portion of the contract is descriptive information relating to the subject covered, insured, policy period, policy limits, deductible and premium.

A certain dollar amount beyond which insurance protection begins. The insured assumes the loss up to the deductible limit and the insurer pays the remainder, up to the policy limit.

The date upon which the insurance policy goes into effect.

A written provision that adds to, deletes, or modifies the provisions in the original contract.

Something not covered by the policy and specifically so stated in the policy contract.

The date on which coverage ceases; exact dates and times vary by policy.

An arrangement, usually provided by rider under an existing policy, whereby additional insurance may be purchased at various times, without a new medical examination or other evidence of insurability.

Transferring the risk of a loss to an insurer under the terms and conditions of an insurance contract. The insurer will indemnify said person against loss, damage, or liability arising from a contingent or unknown event.

The person to be indemnified in case of loss or liability. In life insurance, the person whose life is covered by the policy.

The person guaranteeing to provide indemnity in case of loss or liability.

Insurance protecting the insured against financial loss arising out of legal liability imposed upon him/her in connection with bodily injuries (or death) suffered, or alleged to have suffered, by persons of the public, or damage caused to property other than property owned by or in the custody of the insured as a result of the maintenance of the premises, or the business operations of the insured.

The maximum sums of money in which an insurance company agrees to pay in the event of a loss covered by the policy.

A coverage found in auto and liability policies that pays medical expenses to covered (injured) persons without regard to liability.

A policy containing a single coverage part plus the common policy conditions and common declarations.

A clause making the proceeds payable to a named mortgagee, as interest may appear, and stating the terms of the contract between the insurer and the mortgagee

1) A policyholder, the person to whom the policy is issued; any person or corporation, or any member thereof, specifically mentioned as insured in a policy, as distinguished from others, who, though unnamed, are protected under certain circumstances.

2) In life insurance, this is the person named on the face page of the policy whose life is covered by the basic contract. (Other persons may be covered by riders attached to the basic contract.)

Used to refer to insurance for individuals and families, such as private passenger automobile insurance and homeowner policies

The written contract effecting insurance, or the certificate thereof, by whatever named called, and including all clauses, riders, endorsements, and papers attached thereto and made a part thereof.

A fee added to the premium to help defray the costs of acquisition and/or maintenance. The fee may be one-time or annual; some policies have no policy fee

A periodic payment by the insured to the insurance company in exchange for insurance coverage.

The party who is usually first entitled to receive the policy proceeds upon the insured’s death.

Coverage for liability due to damage to the property of others.

Insurance written to cover the loss, by damage or theft, to specified objects of value owned, possessed, or held by the insured. Sometimes called physical damage in case of automobile insurance.

The premium charge for specific coverage for the regular policy period. Also, the cost of a unit of insurance for a specified period of time.

A process for making a coverage applicable again after it has been canceled or suspended, but before the original normal expiration date of the policy in question.

Term insurance that may be renewed for another term without evidence of insurability.

The cost of replacing property without deduction for depreciation.

A document that amends or changes the policy. In life insurance, a rider usually adds coverage to the basic policy.

In auto insurance, where rather than one liability amount applying on a per accident (occurrence) basis, separate amounts apply to bodily injury and property damage liability. For example, a liability limit of 100/300/100 means bodily injury limits of $100,000 per person, $300,000 per accident and a property damage limit of $100,000 per accident.

Generally, the period of time for which a policy or bond is issued.

A type of life insurance policy that provides protection for a specified time period; most do not have cash value.

A liability insurance policy that takes over where basic liability insurance policies leave off. An umbrella policy usually has a liability limit of $1 million or more, which is added on top of the limit for any other policy, such as a homeowner’s policy that covers liability.

In short, one who underwrites. An underwriter decides whether to accept or reject applications based on the insurer’s written standards, and their own experienced judgment. An agent is often referred to as a “field underwriter.”

A systematic process for evaluating risks. It involves evaluating, selecting, classifying and rating each risk, and establishing the standards of coverage and amount of protection to be offered to each acceptable risk.

Vehicle identification number.

A traditional type of life policy (not universal or variable) which provides coverage for the “whole life” of the insured, rather than for a specific term period. The proceeds are paid at the insured’s death or at the age specified in the policy, usually age 100 or more, when the insured survives that long.

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