Accident
A sudden, unintended, unforeseen and unexpected event, To be insurable,
a loss must be accidental with respect to acts of the insured.
Act of God
An unexplained happening contributed to a superior or natural force which
is unpredictable and without human intervention.
Actual Cash Value
Under some contracts the amount of loss payables is determined by subtracting
an amount for depreciation from the replacement cost (new) of the damaged
or destroyed property. (ACV = RC - D).
Adjuster
Individual employed by a properly and casualty insurance company or an
individual to settle on its behalf claims brought by insureds. The adjuster
evaluates the merits of each claim and makes recommendations to the insurance
company.
Agent
An insurance agent is a person who acts on behalf of that insurance company
with whom he or she is engaged. They may be a "Captive" or "Exclusive"
agent which means they represent only one company, or they may be "Independent"
agent which means they can represent more than one company.
Aggregate Limit
This is the total amount an insurer will pay for all covered losses during
a specific period for a particular coverage.
All Risk
The term "All Risk" means there is coverage for all perils except
those specifically excluded.
Binder
A contract for temporary insurance issued either in writing or orally
pending issuance of a policy of insurance.
Broker
A person who acts or aids in soliciting, negotiating and procuring insurance
on behalf of an insured. However, in the collection of insurance premiums
the broker is deemed to be an agent for the company.
Builders Risk Insurance
Insurance designed to cover buildings in the course of construction.
Claim
Request by an insured for imdemnification by an insurance company for
loss incurred from an insured peril.
Concealment
This is the failure of an applicant for an insurance policy to reveal
facts that are known. This can void the insurance contract whether the
concealment was intentional or unintentional.
Conditions
A provision which sets forth the rights, duties and responsibilities of
the parties to an insurance contract. They may be found anywhere in the
policy.
Coverage
Protection under an insurance policy. In property insurance, coverage
lists perils insured against properties covered, locations covered, individuals
insured, and the limits of indemnification. In life insurance, living
and death benefits.
Declarations
Section of insurance contract which sets forth information that identifies
the parties to the contract, what is covered, where, when, and at what
limits, as well as rates and premiums.
Deductible
A deductible serves to reduce the policy premium because the insured absorbs
the small losses.
Effective Date
The date that coverage starts under an insurance contract.
Endorsement
An attachment to an insurance policy which is used to clarify, extend,
or restrict coverage.
Exclusion
This is an limitation or restriction of the coverage granted by the insuring
agreement of an insurance contract.
Flat Cancellation
This type of cancellation means that the policy was cancelled without
charge, by agreement.
Flat Rate
An insurance rate which is used without any requirement that the coverage
be in relationship to value.
Floater
This form provides coverage for those goods for which it is difficult
to establish s specific location.
Fraud
This involves intentional deception which results in injury to another
party.
Gross Premium
Total amount paid by insured.
Inception Date
The date that an insurance contract becomes effective.
Insurable Interest
A person is deemed to have an insurable interest in property when he has
a lawful, substantial, economic interest in the preservation of the property.
To collect under an insurance policy, an insured must have at the time
of loss or damage an insurable interest in the property.
Insurance
A social device for reducing economic risk whereby many members of a group
collect funds to pay the losses of a few of the members of the group.
Insured
The individual or organization for whom insurance protection is provided
by an insurance policy.
Insurer
Company offering protection through the sale of an insurance policy to
an insured.
Liability
Legal obligation to perform or not perform specified acts(s).
Liability Insurance
Provides protection from lawsuits of others.
Minimum Premium
The minimum amount an issuer will accept to issue a policy even if the
gross premium is a lesser amount.
Named Insured
The individual(s) or organization(s) who the declaration section of an
insurance policy specifically names as the insured.
Negligence
A tort, a civil wrong not based upon a contract. It is the failure to
act as a reasonable and prudent person would have done in similar circumtances,
i.e. the careless invasion by one party of the personal or property rights
of another party.
Occurrence
A situation which exists over a period of time as opposed to an accident
which can be fixed in time. It's an accident ehich can be the result of
a repeated and continuous exposure to the same general harmful conditions.
Policy Limit
The policy limit is the dollar amount of coverage shown in the contract.
Policy Period
This is the period of time a policy is in effect.
Premium
The premium is the money consideration which the insured pays for the
undertaking of the insurance company.
Proof of Loss
A written document which must be filled by an insured when a loss occurs
under a property insurance policy.
Pro-Rata Cancellation
When a policy is cancelled and there is no penalty charged against the
premium to be returned.
Reinstatement
Restoration of a policy that has lapsed because of non-payment of premium
after the grace period has expired.
Short Rate Cancellation
This is a cancellation with a penalty. Generally when the insured cancels,
it is on a short-rate basis. (Exceptoions: insured going into the military
or when insured cancels and reinsures in the same company).
Termination Date
The date that coverage expires on an insurance contract.
