Accidental Death Benefit
In a life insurance policy benefit in addition to the death benefit paid to the beneficiary, should death occur due to an accident. There can be certain exclusions as well as time and age limits.
Aggregate Limit
Usually refers to liability insurance and indicates the amount of coverage that the insured has under the contract for a specific period of time, usually the contract period, no matter how many separate accidents might occur.
Annuity
An agreement by an insurer to make periodic payments that continue during the survival of the annuitant(s) or for a specified period.
Automobile Liability Insurance
Coverage if an insured is legally liable for bodily injury or property damage caused by an automobile.
Broker
Insurance salesperson that searches the marketplace in the interest of clients, not insurance companies.
Casualty
Liability or loss resulting from an accident.
Claim
A demand made by the insured, or the insured's beneficiary, for payment of the benefits as provided by the policy.
Coinsurance
In property insurance, requires the policyholder to carry insurance equal to a specified percentage of the value of property to receive full payment on a loss. For health insurance, it is a percentage of each claim above the deductible paid by the policyholder. For a 20% health insurance coinsurance clause, the policyholder pays for the deductible plus 20% of his covered losses. After paying 80% of losses up to a specified ceiling, the insurer starts paying 100% of losses.
Commercial Lines
Refers to insurance for businesses, professionals and commercial establishments.
Comprehensive Insurance
Auto insurance coverage providing protection in the event of physical damage (other than collision) or theft of the insured car. For example, fire damage or a cracked windshield would be covered under the comprehensive section.
Coverage
The scope of protection provided 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 are listed.
Coverage Area
The geographic region covered by travel insurance.
Death Benefit
The limit of insurance or the amount of benefit that will be paid in the event of the death of a covered person.
Deductible
Amount of loss that the insured pays before the insurance kicks in.
Elimination Period
The time which must pass after filing a claim before policyholder can collect insurance benefits. Also known as "waiting period".
Employers Liability Insurance
Coverage against common law liability of an employer for accidents to employees, as distinguished from liability imposed by a workers' compensation law.
Encumbrance
A claim on property such as a mortgage, a lien for work and materials, or a right of dower. The interest of the property owner is reduced by the amount of the encumbrance
Floater
A separate policy available to cover the value of goods beyond the coverage of a standard renters insurance policy including movable property such as jewelry or sports equipment.
General Liability Insurance
Insurance designed to protect business owners and operators from a wide variety of liability exposures. Exposures could include liability arising from accidents resulting from the insured's premises or operations, products sold by the insured, operations completed by the insured, and contractual liability.
Indemnity
Restoration to the victim of a loss by payment, repair or replacement.
Liability
Broadly speaking any legally enforceable obligation is a liability. The term is most commonly used in a pecuniary sense.
Liability Insurance
Insurance that pays and renders service on behalf of an insured for loss arising out of his responsibility, due to negligence, to others imposed by law or assumed by contract.
Mortality and Expense Risk Fees
A charge that covers such annuity contract guarantees as death benefits.
Peril
The cause of a possible loss.
Personal Injury Protection
Pays basic expenses for an insured and his or her family in states with no-fault auto insurance. No-fault laws generally require drivers to carry both liability insurance and personal injury protection coverage to pay for basic needs of the insured, such as medical expenses, in the event of an accident.
Policy
The written contract effecting insurance or the certificate thereof, by whatever name called and including all clauses, riders, endorsements, and papers attached thereto and made a part thereof
Pre-Existing Condition
A coverage limitation included in many health policies which states that certain physical or mental conditions, either previously diagnosed or which would normally be expected to require treatment prior to issue, will not be covered under the new policy for a specified period of time.
Premium
The price of insurance protection for a specified risk for a specified period of time.
Reinsurance
In effect, insurance that an insurance company buys for its own protection. The risk of loss is spread so a disproportionately large loss under a single policy doesn't fall on one company. Reinsurance enables an insurance company to expand its capacity; stabilize its underwriting results; finance its expanding volume; secure catastrophe protection against shock losses; withdraw from a line of business or a geographical area within a specified time period.
Renewal
The automatic re-establishment of in-force status effected by the payment of another premium.
Risk Management
Management of the pure risks to which a company might be subject. It involves analyzing all exposures to the possibility of loss and determining how to handle these exposures through practices such as avoiding the risk, retaining the risk, reducing the risk, or transferring the risk, usually by insurance.
Umbrella Policy
Coverage for losses above the limit of an underlying policy or policies such as homeowners and auto insurance. While it applies to losses over the dollar amount in the underlying policies, terms of coverage are sometimes broader than those of underlying policies.
Underwriter
The individual trained in evaluating risks and determining rates and coverages for them. Also, an insurer.
Underwriting
The process of selecting risks for insurance and classifying them according to their degrees of insurability so that the appropriate rates may be assigned. The process also includes rejection of those risks that do not qualify.