Insurance Dictionary
Agent: In insurance,
the person authorized to represent
the insurer in negotiating, servicing,
or effecting insurance policies.
Applicant: The
party applying for an insurance
policy.
Application: A
printed form developed by an insurer
that includes questions about the
prospective insured and the desired
insurance coverage and limits.
Auto Collision Coverage:
Optional auto insurance which pays
for damage to your car caused by
collision with another car or object,
or by rolling the car over. Frequently
required if you have a car loan.
Auto Comprehensive Physical
Damage Coverage: Optional
auto insurance which pays for damage
to your auto caused by things other
than collision or rolling the car
over, such as fire, theft, vandalism,
flood or hail. Frequently required
if you have a car loan.
Bodily Injury Liability
Coverage: Pays when an
insured person is legally liable
for bodily injury or death caused
by your vehicle or your operation
of most non-owned vehicles. This
coverage also pays for your legal
defense if you are sued.
Claim: A person's
request for payment from an insurer
for a loss covered by the insurance
policy.
Collision Coverage:
Pays for loss to your covered vehicle
when it collides with another object
or overturns. We will also pay for
a collision loss to any non-owned
vehicle, or to a vehicle you have
rented other than a vehicle rented
for use in connection with your
business or employment, while that
vehicle is in your custody, or while
you are operating it.
Comprehensive Coverage:
Pays for loss or damage to your
covered vehicle caused by any event
other than collision. This includes
damages due to events such as fire,
theft, windstorm, flood, and vandalism.
We will also pay transportation
and loss of use expenses under this
coverage if your motor vehicle is
stolen.
Conditions: The
part of your insurance policy that
states the obligations of the person
insured and those of the insurance
company.
Continuously Insured:
Insurance coverage was in effect
from an insurer or more than one
insurer at all times, without a
break or lapse in coverage for any
reason.
Contract: A legally
enforceable agreement between two
or more parties.
Declarations Page:
The report from your insurance company
listing:
1.the types of coverage you have
elected;
2.the limit for each coverage;
3.the cost for each coverage;
4.the specified vehicles covered
by the policy;
5.the types of coverage for each
vehicle covered by the policy; and
other information applicable to
the policy.
Deductibles: The
portion of the loss that the policyholder
agrees to pay out of pocket, before
the insurance company pays the amount
they are obligated to cover. For
example, if the covered claim is
$1000 and your deductible is $250,
you pay $250 and your company will
pay $750. Deductibles help to keep
insurance rates reasonable. Raising
the amount of the deductible lowers
the cost of insurance.
Depreciation:
Reduction in the value of property
due to age and use.
Endorsement: Attachment
or addendum to an insurance policy;
an endorsement changes the contract's
original terms.
Garaging Location:
The ZIP code where your vehicle
is parked when not in use and usually
corresponds to your primary residence.
Insurance Company:
An organization that has been chartered
by a governmental entity to transact
the business of insurance.
Insured: The person
whose insurable interest is protected
under an insurance policy.
Insurer: See Insurance
Company.
Lapse: Termination
of a policy due to nonpayment of
premiums.
Liability: A legal
obligation to compensate a person
harmed by one's acts or omissions.
Liability Coverage:
Insurance that provides compensation
for a harm or wrong to a third party
for which an insured is legally
obligated to pay.
Life Insurance:
Insurance that pays a specified
sum of money to designated beneficiaries
if the insured person dies during
the policy term.
Limits: The most
we will pay for a specific insurance
coverage. You may choose the limit
which meets your needs. Most states
have laws that specify the minimum
limits you must purchase.
Loss: A claim
either paid or payable due to the
insurer's policy obligations.
Medical Payments Coverage:
Medical and funeral expense coverage
for bodily injuries sustained from
or while occupying an insured vehicle,
regardless of the insured's negligence.
Named Insured:
The first person in whose name the
insurance policy is issued.
Negligence: Failure
to use a generally acceptable level
of care and caution.
No-fault Insurance:
A system of compensation enacted
by law in many states under which
indemnification is made by the insured's
own insurance company regardless
of who is at fault. Details of this
system vary significantly from state
to state.
Occasional Driver:
The person who is not the primary
or principal driver of the vehicle.
Peril: The cause
of loss or damage.
Personal Property Insurance:
Protects against the loss of, or
damage to property other than real
property (real estate) caused by
specific perils.
Policy Expiration Date:
The date when your current insurance
policy expires. This date can be
found on your current policy, Declaration
(or "DEC") page, insurance
identification card or recent cancellation
notice. This date is not to be confused
with the date of your next payment
or when your renewal payment is
due.
Policy Term: The
length of time that the policy is
in force. Usually 6 months or a
year.
Primary Residence:
The place where you will reside
for the majority of your policy
term. If you are a homeowner who
does not reside in the home you
own, please choose the "rent"
or "other" option.
Primary Use: What
your vehicle is mainly used for:
- To/From Work If you use your
vehicle to commute to and from
your work and/or school.
- Business If your vehicle is
used for one or all of the following:
- used to make sales calls
- used as vehicle for business
trips to bank or post office,
picking up supplies, going to
different locations
- owned or leased by a partnership
or corporation that have a business
listed as and additional interest
on the car
- Farm If your vehicle is used
primarily on a farm, ranch or
orchard
- Pleasure No others apply
Policy: The written
forms that make up the insurance
contract between an insured and
insurer. A policy includes the terms
and conditions of the coverage,
the perils insured or excluded,
etc.
Policy Declarations:
The part of the insurance contract
that lists basic underwriting information,
including the insured's name, address
and description of insured locations
as well as policy limits.
Policy Limits:
The maximum amount an insured may
collect or for which an insured
is protected, under the terms of
the policy.
Policyholder:
The person who buys insurance.
Policyowner: An
individual with an ownership interest
in an insurance policy.
Policy Period:
The amount of time an insurance
contract or policy lasts.
Premium: The price
for insurance coverage as described
in the insurance policy for a specific
period of time.
Principal Driver:
The person who drives the car most
often.
Proof of Loss:
A sworn statement that usually must
be furnished by the insured to an
insurer before any loss under a
policy may be paid.
Property Damage Liability
Coverage: Pays when an
insured person is legally liable
for damage to the property of others
caused by your vehicle your operation
of most non-owned vehicles. This
coverage also pays for your legal
defense costs if you are sued.
Reimbursement:
The payment of an amount of money
by an insurance policy for a covered
loss.
Reinstatement:
The process by which a insurance
company puts back in force a policy
that has lapsed or has been canceled
for nonpayment of premium.
Riders: An addition
to an insurance policy that becomes
a part of the contract.
Risk: The possibility
or chance of loss or injury.
Second Named Insured:
The named insured or listed agent
on a policy may request to designate
any other person listed on the policy
as a "second named insured".
The second named insured has the
same coverage under the policy as
the named insured.
Settlement: An
agreement between a claimant to
an insurance policy and the insurance
company regarding the amount and
method of a claim or benefit payment.
Theft Limit (or Inside
Policy Limits): The highest
amount an insurance company will
pay on certain items of personal
property. For instance, some policies
have a $5,000 limit for computers.
Underwriting:
The process of reviewing applications
for coverage. Applications that
are accepted are then classified
by the underwriter according to
the type and degree of risk.
Uninsured Motorist Coverage:
Coverage that pays for covered damage
for bodily injury that an uninsured
motorist is legally liable but unable
to pay.
VIN: The vehicle
identification number (VIN) on your
vehicle. This number is usually
found on the dashboard of your vehicle
on the driver's side, and is usually
listed on the vehicle registration
and title. The VIN number is a combination
of letters and numbers 17 characters
in length that can be used to identify
the make, model, and year of your
car.
