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Abandonment
-Surrender to insurer of all interest in insured property after occurrence of
peril. This is not permitted in most property contracts.
Accident-An unforeseen, unpremeditated, unintended
event, generally sudden, and definite in time and place.
Accidential Bodily Injury-Physical injury to, or
incapacity of, person, accidentally sustained, directly and independently of all
other causes.
Accidental Death- Under life insurance contracts,
death resulting from accident as defined. This has the effect of doubling
(Double Indemnity) the payment to the Beneficiary.
Accidential Death Benefit, Automobile- Supplementary
coverage under automobile policies which provide payment to a beneficiary in the
event of the death of an Insured.
Acts of God- Events caused by forces of nature,
without human intervention, and not preventable by reasonable care, i.e. Flood,
Hurricane, Tidal Waves.
Additional Living Expenses- Additional expense of
providing a home following damage to property insured necesitating abandonment,
i.e. the extra cost of living in a motel.
Agent-One who acts for another. One whose actions can
"bind" his principal. Specifically, a representative of an insurance
company with authority to solicit insurance contracts.
Agreed Amount-An amount of insurance specified in the
contract as being sufficient to nullify the effect of coinsurance or similar
classes.
All-Risk- Insurance that covers loss caused by all
physical damage perils, other than those specifically excluded in the policy
contract.
Annuities- Life insurance contract that provides
income for a specified period of time to an annuitant(s).
Appraisal- A determination of the value of property,
or extent of damage, by an impartial expert.
Appurtenant Structures- Buildings or structures other
than the insured's residence dwelling, i.e. a garage, barn, shed.
Assigned Risk-An inter-company agreement to insure, on
a prearranged basis of assignment, certain Automobile or Workers Compensation
accounts which are normally unacceptable in traditional underwriting practice. A
voluntary underwriting plan to prevent undue hardship in securing insurance
coverage.
Bail- To deliver
goods to another, to be held in trust.
Bailee- One to whom goods have been delivered to be
held in trust.
Bailee Risk- Insurance covering goods entrusted to
another under a "bailment contract".
Bailment-Condition of goods delivered to another in
trust or for safekeeping. Under terms of the contract of bailment, the bailee's
responsibility of the bailee may be "gratuitous" or "for
hire", depending upon the circunstances.
Binder-The act of binding insurance coverage. A state
in the insurance transaction; a temporary contract of insurance.
Boiler Insurance- An insurance contract covering
against physical damage resulting from accidents to boilers or pressure vessels;
electrical devices or machinery; liability for bodily injury and property damage
to others, resulting from an accident.
Bid Bond-A bond required from a contractor when
submitting a bid, attesting to his competency to bid and secure a performance
bond.
Bond, Labor & Material- A bond which prevents a
construction job from being help up by leins for unpaid labor and materials.
Bond, Maintenance- A bond required of a contractor who
has entered into a contract to maintain a building or structure in good
condition.
Bond, Penalty- The face amount of the bond, or the
limit for each individual under a bond is called the penalty.
Bond, Performance- A bond required of a contractor for
the completion of a building or structure per the architect's specifications and
the contract with the owner.
Bond, Supply- A bond required of a contractor or
dealer who has entered into a contract to furnish materials or supplies.
Bonds, Contract- In general, a bond guarantees the
faithful performance of a contract by the principal or contractor.
Broker- A representative of the insured assisting in
the placement of insurance with carriers. While an agent is an authorized
representative of an insurance company, a broker represents the insured.
Builders RiskInsurance against loss to buildings or
structures in the course of construction, including materials incidental to
construction.
Business Interruption- A form of insurance which
"indemnifies' against profits prevented from being earned, and necessary
continuing expenses, during a period that business is shut down because of an
insured peril, such as fire, and boiler explosion.
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Cancellation- The
termination of an insurance contract before the normal end of the policy period,
by an insured or an insurer, in accordance with the contract terms.
Cash Surrender Value- The amount available in cash
upon voluntary termination of a Life insurance policy before it becomes payable
by death or maturity.
Cash Value, Actual- The cost of replacing or restoring
property to its condition prior to a loss, less depreciation.
Coinsurance- An arrangement under which the insured
shares in losses, to the propertionate extend that his insurance is less than
the specified percentage.
Collision- The impact between a vehicle and another
vehicle or object.
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Death and Dismemberment-
Coverage under a health insurance oicy against death, loss of members of the
body, or loss of sight.
Debris Removal- A coverage in property insurance that
provides payment for the cost of removng debris which resulted from an insured
peril.
Deductible-A clause in an insurance contract which
states that the insured will pay a specified amount for a covered loss prior to
the insurance company issuing payment. The insurance company will pay only that
part of a loss which exceeds the specified "deductible" amount.
Depreciation- A decline in the value of property
caused by accident, wear and tear, obsolescence and deterioration.
Disability- An injury or impairment of faculty which
prevents the injured person from performing certain, or all, functions of his
normal occupation.
Disability Income, Life Insurance- A clause in a life
insurance policy which provides payment of monthly income, if the insured
becomes totally and permanently disabled.
Disability Insurance- A form of health insurance which
provides for periodic income during the time that the injured person is unable
to work because of a disabling injury.
Disability Waiver- A provision in a life insurance
policy which permits the insured to omit payment of the premiums due during a
period of total and permanent disability, without impairing the face value of
the policy.
Dividends, Life Insurance- Funds authorized to be
distributed by a life insurance company to their policyholders, representing
monetary accumulations in excess of amounts needed for reserves, casualties,
administration and surplus.
Employers Liability-
A form of liability insurance which protects the employer against claims or
suits brought by an employee alleging injury during the course of employment.
Errors & Omissions-Failure to perform
contractually or otherwise, because of doing work improperly, or neglecting to
perform certain prescribed functions.
Excess- Under certain insurance contracts, where two
or more policies provide coverage, the policy designated as "escess"
pays after, or above, the policy designated as "primary".
Exclusions-Provisions in an insurance contract which
outline those situations, perils, losses, persons or things for which insurance
coverage is not afforded.
Extra Expense-A "time element" contract that
provides the additional costs necessary to continue the insured's business
without interruption, or to expedite loss settlement.
FAIR Plan- An acronym
for Free Access to Insurance Requirements. A joint insurance plan involving the
States, the Federal Government and the insurance industry, whereby persons may
secure fire coverages.
Fidelity Bond- An instrument that provides indemnity
against loss of property, real or personal, caused by the dishonest act of an
employee.
Financial Responsibility- A law which requires an
owner or operator of a motor vehicle to give evidence of financial ability to
meet claims for damages, in order to obtain license to drive a motor vehicle or
to have it registered.
Fire Insurance- An insurance contract against the
occurrence of Fire, which also includes the perils of Lightning and Removal.
Floater- Property subject to relatively frequent
removal from site to site, or during transportation. Movable property in
general. A type of policy which covers such property.
Flood Insurance- A joint Federal Government-insurance
industry program which makes insurance available to persons and business to
insure against losses from flood, rising water, wind driven water, mud-slides,
and other forms of water damage. This coverage is only available in communities
which have been declared eligable by the Federal Government.
Garage Liability- A
combination liability insurance contract that covers permises and operations,
automotive equipment and products-completed operations, as well as Garagekeepers
Legal Liability and Medical Payments.
Health Insurance-
Insurance against loss by sickness or accidental bodily injury.
Homeowners Policy- A mutiple peril contract for owners
or occupants of dwellings generally including fire, theft and liability
coverage. A homeowners policy is a package policy combining many additional
coverages not included in a basic Fire policy.
Hospilization Insurance- A health insurance contract
covering all or part of the cost of hospital care and incidentals.
Improvements & Betterments-
Additions or improvements made by a tenant to the landlord's property, at his
own expense, subject to legal claim by landlord of acquiring title to the same.
A form of insurance against loss or damage to such enhanced property.
Indemnity- Repair, replacement or payment of the value
of a loss.
Insured- A person in whose name the contract of
insurance has been issued (a named insured) and other parties to whom the
benefits of the contract ma be extended, by mutual agreement.
Insuring Agreements- Promises by the insurer to
indemnify, or to pay on behalf of, the insured, in the event of a loss.
Joint Loss- The
procedure relating to the apportionment of loss when two or more insurance
contracts may be called upon to contribute, generally when the separate
insurances are in different fields.
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Lapse- The
termination of an insurance policy, subject to a grace period and reinstatement
clauses.
Level Term/Level Premium- A life insurance contract
where the cost of the insurance is distributed over the period during which
premiums are due. The premium remains the same from year to year, although it is
more than the actual cost of protection in the earlier years of the policy, and
less than the actual cost in the later years. The excess paid in the early years
builds up the reserve.
Liability- A legal obligation, usually financial, to
respond in damages in the event of an accident or occurrence. It may be either
imposed by law, or assumed under contract.
Liability- Split Limit-
Expression of the extent of coverage separately as to: per accident/per person
(or occurrence ) for Bodily Injury; Per Accident (or occurrence) for Property
Damage.
Liability - Combined Single Limit-Expression of the
extent of coverage in a lump-sum, whereby the entire amount expressed is
available either per person or per accident, regardless of whether the claim is
for Bodily Injury or Property Damage or both.
Life Insurance- A contract of insurance which
undertakes to pay at maturity stated in the contract, or at death, the sum
specified as the face value. The policy may also cover certain payments in the
event of disability.
Major Medical- A form
of Health insurance that provides substantially larger amounts of coverage,
generally intended to be in the nautre of "excess" over underlying
coverage. Generally, characterized by a deductible plus a co-insurance feature.
Malpractice- Improper or illegal treatment, as in
medicine or surgery.
Maturities, Life Insurance- Terminations of period,
statistically or by contract terminology, of Life insurance contracts, requiring
payment of the stated amount.
Medical Expense- Cost of paying medical bills for
physicians, surgeons, technicians, nurses, etc.
Minimum Premium- The least amount of premium for which
a policy or coverage may be issued or initiated.
Named Insured- The
principal contracting party designated as the policyholder. Named insured may,
under some contracts, automatically include the spouse as well.
Non-Owned Automobiles- In Automobile liability and
Physical Damage insurance, vehicles other than the one(s) owned by the Named
Insured to which coverage of the policy may be extended, under contract
conditions.
Occupational Disease-
Sickness or disease, usually of specified types, related to the occupation of
the employee, compensable under Workers Compensation statutes.
Occurrence- An accidental event, proximately resulting
not only from a specific and definable cause of injury, but also injurious
exposure to conditions neither expected nor intended from the standpoint of the
insured.
Owned Automobiles- in automobile liability insurance,
the vehicle owned and operated by the Named Insured and spouse.
Peril- The cause of
loss.
Personal Articles Floater- A combination of inland
marine floater which includes one or more of the following: Furs, Jewelry, Fine
Arts, Musical Instruments, and similar types of coverage.
Physical Damage - Automobile - One of the forms of
coverage under an automobile policy which protects an insured's vehicle for
against damage. Comprehensive and/or collision coverage may commonly be referred
to as physical damage coverage.
Primary - The policy whose limits are drawn upon or
exhausted first, where other contributing insurance is designated as
"excess".
Private Passenger Vehicle - In
automobile insurance, generally a vehicle of the private passenger type, but by
extension including jeep, station wagons and light weight trucks or utility type
vehicles.
Proceeds left at Interest - A life insurance option,
with regard either to settlement or dividends, or both, whereby the insured or
beneficiary directs the insurance company to retain the proceeds of poicy or
dividend at a stipulated rate of interest. The isnterest is to be paid
periodically, and the basic amount subject to withdrawl at any time.
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Recreational Vehicle
- Gasoline powered and operated vehicle specifically designed for sports use, or
for travel over unusual type of terrain, i.e. Dune Buggy, Snowmobile.
Rental Value - Fair rental value of the building or
parts thereof, as furnished and equipped by the owner, whether actually rented
or not; a form of insurance against the loss of rents or rental value of the
property.
Replacement Cost - The total cost of labor, materials
and services necessary to replace property in its entirety, with material sof
like kind and quality, without allowance for increased cost resulting from
legislation regarding construction.
Securities - In crime
insurance, all negotiable or non-negotiable instruments or contracts represnting
either money or other property. It includes stamps, tokens and tickets, but does
not include money.
State Fund - State supported or subsidized insurance
carrier, created by legislative action and responsible to the State government.
A form of insurance provided to meet the need for coverage not readily available
in private enterprise markets, i.e. automobile, workers compensation, fire,
flood.
Subrogation - Substitution of one party for another in
the attribution or assignment of rights; in insurance, a preliminary process to
the recovery of funds advanced on behalf of an insured who has sustained damage
alleged to have been caused by another party.
Suicide Clause - In life insurance, and in some forms
of health insurance, a provision that self-destruction will void, restrict or
limit recovery as to the insured's estate or beneficiary. In life insurance,
usually negated after a stipulated period.
Term Life Insurance -
Life insurance issued for a specified term, such as five, ten, fifteen years.
Insurance is payable to the beneficiary at the death of the insured on if such
death occurs prior to the expiration of the term, unless otherwise extended,
renewed or converted.
Tort- Any private or civil wrong by act or imission.
Total Disability - Such complete incapacity of the
insured that he is not able to perform the duties of his occupation.
Umbrella Liability -
A form of excess liability insurance that provides very substantial limits of
coverage over and above the limits of an underlying liability policy. Generally,
a self-insured retention, or deductible applies.
Uninsured Motorists - A motorist who fails to carry
insurance or similar protection against bodily injury accidents.
Unoccupancy - Condition in which the dwelling or
building is not currently occupied by persons, but the customary contents remain
within such building.
Vacancy - A condition
in which the dwelling or building is not currently occupied by persons, and the
contents usual to the premises have been removed.
Valuable Papers and Records Policy - A form of
insurance issued by insurance carriers, providing "all-risk"
protection in the event of loss of or damage to deeds, plans or other valued
documents.
Vandalism and Malicious Mischief - Violent and
malicious damage to or destruction of property by a person or persons, with
willful intent and generally by a lesser number than that which would constitute
a riot.
Waiting Period - A
period, usually a number of days, during which benefits for claims are denied,
as in Health insurance, Workers Compensation, and some forms of Group Insurance.
Whole-Life Insurance - Life insurance payable to a
beneficiary at the death of an insured whenever that event occurs.
Workers Compensation - A form of insurance provided in
compliance with Workers Compensation statutes, coterminous with such
legislation, or the ruling of Industrial Accident Commissions, or similar bodies
appointed to administer the statue.
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