Accident - Is an incident that involves you or another resident of your household while operating a vehicle and results in damage.

Accident Insurance - Insurance coverage against loss by accidental bodily injury.

Accidental Bodily Injury - Injury to a person from the result of an accident.

Actual Cash Value (ACV) - This is how much you could get for an item if you sold it today. Any item has three basic values. original cost, actual cash value, and replacement value. For example, if you originally paid $400 for your living room couch; its actual cash value might be $175. But if it's destroyed in a fire, replacing it will cost you $800.

Adjusting - The investigation process of settling claims by an insurance company.

Agent - An agent is a person who sells and services insurance policies. There are basically two kinds of agents; (1) Independent agents represent as least two insurance companies. The independent agents' commission is a percentage of each premium paid, and includes a fee for servicing a person's policy (answering your questions, helping file claims, etc.) (2) An agent who represents a direct writer usually represents only one company. Sometime this agents is paid on a commission basis in much the same manner as the independent agent. In other cases. he or she may be paid a salary rather than on a commission basis.

All-Risk Policies - Coverage through an insurance contract that promises to cover all losses except those losses specifically excluded in your policy.

Amendment - A formal document revising the provisions of an insurance policy. Usually, signed jointly by an insurance company officer and the policy owner or his authorized
representative.

Annuity - Considered to be the opposite of life insurance where a death benefit is paid, an annuity provides a benefit while the insured is alive. This is a contract that provides an income for a specified period of time.

Appraisal - An evaluation to determine the insurable value of your property before you buy a policy, or to determine the amount of a loss when you file a claim.

Assets - Any funds, goods , property, rights of actions, securities, or resources of any kind owned by an insurance company.

Assigned Risk - This is what insurance companies call a driver who cannot find a company willing to insure him or her voluntarily--perhaps due to a poor driving record or lack of driving experience. State laws require all drivers to carry insurance, so the state in which the driver lives will assign his or her policy to an insurance company doing business there. Insurance companies are legally required to participate in state-mandated programs--often call assigned risk plans--that make coverage available to drivers who can't obtain it otherwise.

At Fault Accident - Any accident that is considered chargeable unless demonstrated that the vehicle was legally parked, vehicle was struck in rear while legally stopped for traffic or traffic control device, vehicle collided with a bird or animal, accident involved hit-and-run driver and was reported to proper authorities within 24 hours, accident is one in which judgment or reimbursement is obtained from other party, providing the company make no liability payment on behalf of the insured, other driver convicted of a moving violation in connection with accident or our insured is not convicted.

Automobile Insurance - A contract between you and the insurance company. You agree to pay a premium and in exchange the insurance company agrees to reimburse you for automobile related losses. There are four major categories of automobile insurance: Liability Coverage, Personal Injury Protection, Physical Damage, Uninsured/Underinsured Motorist protection.

Automobile Liability, Collision and Comprehensive - These are the three main types of coverage available in an auto insurance policy. Liability pays other people if you've injured them or damaged their property. Collision pays to repair damage to you car caused by (what else?) collisions. Comprehensive pays you for your losses due to theft and other calamities that are unrelated to collisions--like damage from hail, fire, vandalism, floods, etc. For full protection, you need all three types of coverage. But if you car is so old that its book value is less than the cost of repairing it, you should consider dripping collision and comprehensive coverage, because no policy pays you more that the car's book value for repairs or replacement.

Automobile Physical Damage Insurance - Coverage to pay for damage to, or loss, of an insured automobile resulting from covered perils.

Auto Policy Discounts - You could pay a lower premium on you auto policy if you qualify for any of several discounts offered by most insurers. Some examples are Anti-theft Device, Driver Training, Defensive Driver, good Student, Multi-Car, Safe Driver Discounts.

Beneficiary - The designation by the owner of a life insurance policy that indicates who will receive the proceeds upon the insured's death or when a policy endowment matures.

Benefits - Monetary sum payable by the insurance company to a claimant, assignee, or beneficiary.

Binder - A temporary insurance policy that expires as the end of a specific time period or when the permanent policy is written. A binder is given to an applicant for insurance during the time the complete policy paperwork is being completed.

Bodily Injury - Bodily injury liability coverage is insurance that protects you against financial loss (including the cost of you legal defense), when you are found legally responsible for injuring other people in an automobile accidents. Liability insurance for bodily injury pays for the medical treatment. rehabilitation, or funeral costs incurred by another driver, his or her passengers, passengers in you car, and pedestrians. It also pays legal costs and settlements for non-monetary losses--i.e. pain and suffering. Keep in mind, bodily injury liability coverage does not pay for any of your medical expenses, loss of income or pain and suffering resulting from an accident. Liability (BI) and property damage (PD) together are often referred to simply as liability insurance. Most state laws require that all drivers carry liability insurance of offer other proof that they are financially able to pay any damages for which they might be found liable.

Bodily Injury Liability - Bodily injury liability coverage is insurance that protects you against financial loss (including the cost of your legal defense) when you are legally held liable for injuring other persons in an automobile accident. Liability insurance for both bodily injury (BI) and property damage (PD, or proof of financial responsibility, are requited by state law. These two coverage's together, are often referred to as liability insurance.

Bodily Injury - Uninsured/Underinsured...bodily injury uninsured or underinsured coverage protect you in situations where you have been injured and the other driver has inadequate coverage or no insurance at all. Your insurance company would then pay you up to the limit of your policy, for the injuries you suffered.

Burglary and Theft Insurance - Coverage against property losses due to burglary, robbery, or larceny.

Certificate of Insurance - A document issued to a member of a group insurance plan, outlining the insurance benefits and principal provisions of the policy.

Claim - A request by the insured for indemnification by the insurance company for a loss that is a covered peril.

Collision Insurance - Collision insurance is automobile insurance coverage that reimburses you for damage to your own car, when the damage results from overturning your car or from colliding with another object. The other object doesn't have to be a car--a run-in with a tree or a brick wall would be covered under the collision provision of a policy. Collision insurance is a type of physical damage coverage and also a first-party coverage. First-party coverage pays the policy owner--i.e. your. If you have injured someone else or damaged their property, third-party coverage pays for their losses. Liability insurance is called third party coverage, because it pays for losses sustained by third parties--i.e. other people. (In case you're wondering who the second party is--it's your insurance company.) Collision coverage pays for damage to you car regardless of who is at-fault in the accident. This means you won't have to wait for the other driver to pay for damage to you car before you get it fixed. If the other person was at fault, your insurance company will try to recover what it paid you from his or her insurance company. But that's not your problem.

Collision Deductible - Collision coverage pays for damage to your car when it bumps into another object or is overturned. See collision insurance. A deductible is the amount you pay for a covered loss before the insurance company start to pick up the tab. Need more details? See deductible Your collision deductible is the amount you pay before the insurance company reimburses you for a loss that is covered under the collision portion of you insurance policy.

Comprehensive Insurance - Comprehensive insurance reimburses you for damage to your own car from causes other than collision or overturning. The comprehensive portion of you policy pays for loss die to perils like hail, flood, theft, fire, glass breakage, falling objects, missiles, explosions, earthquakes, windstorms, vandalism or malicious mischief, riot or civil commotion, and collision with a bird or an animal--in other words, just about everything except for collision and normal wear and tear. Comprehensive insurance is a physical damage coverage and also a first-party coverage. First-party coverage pays the policy owner--i.e. you. If you have injured someone else or damaged their property, third-party coverage pays for their losses. (the second party is your insurance company.) When you look at a policy's comprehensive coverage, check for exclusions or limitations. If you have a special audio system installed in your car, for example, you should make sure your policy would cover the cost of the equipment if it were damaged or stolen. It's also important to know if the policy pays for the actual cash value of damaged or stolen property (its current value after depreciation has been subtracted or the full amount required to replace it today).

Comprehensive Claim - Is a payment made to you by you current or prior insurance company for damages caused by you vehicle by something other then an accident e.g. vandalism, theft, broken windshield.

Comprehensive Deductible - What's comprehensive? It's everything that's not covered under collision. Comprehensive insurance covers theft and vandalism, for example. For more information see comprehensive insurance. A deductible is the amount you pay for a covered loss before the insurance company start to pick up the tab. Need more details. See deductible.

Comprehensive Personal Liability Insurance - Provides individuals and family members with protection from legal liability for most accidents caused by them in their personal lives. Note that any legal liability claims submitted while in the course of business activities are not covered.

Computers or other Valuables - If you own printer, scanner, tape drives, computer speakers, monitors, or any other equipment used in conjunction with your home computer, or valuables such as jewelry, rugs, art, or antiques, don't assume it's all insured in a standard homeowners or renters policy. If you have more that $1,000 worth of such property, you usually need special additional coverage.

Concealment - Failure of an applicant for insurance to reveal a material fact to the insurance company.

Contract - An agreement between the insurer and the insurance company that provides a legally enforceable obligation to provide benefit payments for all premium amounts received.

Coverage - Is another work for insurance. Insurance companies use the term "coverage" to mean either the dollar amount of insurance purchased, as in "you have $200,000 of liability coverage," or the type of loss covered, such as "This policy included coverage for theft".

Declarations- Information such as name, description, and location of insured property, premiums payable, coverage amounts, are placed on what agents call the Declarations Page.

Declarations Page - The declarations page tells you who and/or what is covered by the insurance, the amount of coverage purchased and the conditions--the when and where--covered by the policy.

Deductible - The amount which a policyholder agrees to pay, per claim or per accident, toward the total amount of an insured loss.

Disappearing Deductible - A deductible in an insurance contract that provides for a decreasing deductible amount as the size of the loss increases.

Discounts - Regulations allow an insurer to offer lower premiums when there is a statistically proven decrease in risk.

Double Indemnity - An insurance policy provision usually associated with death, which doubles payment of a designated benefit when specified causes or under specific circumstances occur.

Driver Education Credit - A student discount or reduction in premium amount for which younger drivers become eligible on completion of a driver education course. These courses are available in most public school systems.

Dwelling Coverage - Dwelling coverage protect your house and any structures attached to you home, like the garage and the screened porch. If you have materials on you property that are being used to expand or repair the---the lumber being used to add another wing, for example---would also be covered.

Dwelling Forms - An insurance policy designed to cover a dwelling and the personal property that is in it plus some additional coverage's. There are several forms available, check with us for your dwelling insurance needs.

Dwelling Replacement Coverage - Replacement cost at the time of loss without deduction for depreciation.

Effective Date - The date on which the insurance under a policy will begin.

Endorsements - An additional piece of paper, not a part of the original insurance policy, in which certain terms and conditions, when attached to the original insurance policy, becomes a legal part of that contract.

Endorsement - Special provisions that can be added to your policy to enhance coverage in a particular are, or to remove certain coverage's. For example, Scheduled Personal Property and Earthquake are common endorsements to a home insurance policy. Towing is a common auto policy endorsement.

Exclusion(s) - An exclusion is an insurance policy provision that denies coverage for certain specified losses. In most homeowner's policies, for example, flood damage and earthquake damage are excluded perils.

Face - The first page of a life insurance contract.

Fire Insurance - Insurance contracts that indemnify an insured for loss caused by the destruction of the insured's property resulting from fire.

Good Student Discount - The reduction of an automobile premium for a young driver who ranks in the upper percent of their class.

Grace Period - The specified period after a premium payment is due, in which the policyholder may make such payment, and during which the protection of the policy continues.

Gross Premium - Premium paid by the policyholder.

Guaranteed Replacement Cost - Is coverage on homeowners insurance policy that means your home will be repaired to its value at the time of loss, regardless of the amount of coverage carried. For example, you estimate your home to have a full replacement value of $162.000. On your homeowner policy, you carry $162,000 coverage for the structure. If you have guaranteed replacement cost endorsement on your policy and the home is lost in a fire and the house costs $168,000 to rebuild, the policy will pay $168,000. (see the
80% rule).

Health Insurance - Any insurance policy that provides payment for benefits of a covered sickness or injury. Included under this definition are various types of insurance such as: accident insurance, disability insurance, medical expense insurance, and accidental death and dismemberment insurance.
        
Homeowners Insurance - A homeowner policy bundles different insurance coverage, providing a broad range of personal property, dwelling and liability protection for homeowners and renters. It's called a package policy because it covers both losses to your property and damage done to others.

Homeowners Policy - A package policy providing home owners with a broad range of property and liability coverage's.

Hospital Expense Insurance - A health insurance policy that covers daily hospital room and board charges and some miscellaneous hospital expenses.

Hospital Miscellaneous Services - Any services other than room and board (and general nursing services) provided by a hospital during hospital confinement. Included are such items as: X- ray examinations, laboratory tests, medicines, surgical dressings, anesthetics (including the administration of), and use of operating room.

Indemnification - The compensation to the victim of a loss, in whole or in part, by payment, repair, or replacement.

Independent Agent - An independent agent is a business person who represents two or more insurance companies in a sales and service capacity and who is paid on a commission basis.

Independent Agency System - The type of property and liability insurance marketing system, sometimes called the American agency system, in which the agent is an independent businessperson representing several companies.

Insurable Interest - Any interest a person has in a possible subject of insurance, such as a car or home, of such a nature that a certain happening might cause that person financial loss.

Insurance Company - An organization chartered to operate as an insurer.

Insurance Commissioner - The top insurance regulatory official in a state.

Insurance Policy - The printed form which serves as the contract between an insurer and an insured.

Insured - A person or organization, covered by an insurance policy, including the "named insured" and any other parties for whom protection is provided under the policy.

Insurer - The party to the insurance contract who promises to pay losses or benefits, or any corporation engaged primarily in the business of furnishing insurance to the public.

Lapse - The termination of an insurance policy due to non-payment of premium(s).

Lapsed Policy - A policy terminated for non-payment of premiums.

Liability - Any legally enforceable act or obligation.

Liability Coverage Insurance - Insurance covering the legal liability of the insured resulting from injuries to a third party to their body or damage to their property. Pay claims against you and your legal defense costs when you are legally responsible for an accident in which you have injured another person or damaged his or her property. Liability also refers to the responsibility an insurance company accepts under the policy, which is a legal contract.

Liability Limits - The maximum sums listed on a liability policy which an insurance company provides protection.

Life Insurance - Insurance providing payment of a specified amount on the insured's death, either to his or her estate or to a designated beneficiary.

Loss - The reduction in the value of an insured's property caused by a covered peril.

Mail Order Insurer - An insurance company that sells insurance policies through the mail, or other mass media, eliminating a need for agents.

Maintenance Bond - A bond that guarantees against defects in workmanship or materials for a stated period of time after the acceptance of the completed work.

Major Medical Insurance - Health insurance that provides benefits for major illness and injury. Usually characterized by a large benefit maximum ranging up to $5,000,000.00, or no limit. This insurance, above an initial deductible, reimburses the major part of charges for hospital, doctor, private nurses, medical appliances, prescribed out-of-hospital treatment, drugs, and medicines.

Major Violation - Including but not limited to careless driving, driving while intoxicated or under the influence of drugs, eluding a police officer, felony with motor vehicle, hit and run or failure to stop after accident, homicide or assault arising out of the operation of a motor vehicle, racing, or speed contest, reckless driving, driving while license revoked or suspended.

Malpractice - Improper care, conduct, or treatment by a physician, hospital, or other provider of health care.

Malpractice Insurance - Coverage for a professional practitioner, such as a doctor or a lawyer, against liability claims resulting from alleged malpractice while professional services were performed.

Managed Care - A health care system that delivers appropriate health care services to covered individuals by arrangements with selected providers.

Manual Rate - The premium rate developed for a group insurance coverage from standard rate tables normally referred to as its rate manual.

Marine Insurance - A form of insurance primarily concerned with means of transportation and communication, and with goods in transit.

Marital deduction - A reduction of an estate for estate tax purposes, which is available if the decedent is survived by his or her spouse.

Master Policy - Two definition...(1) An insurance policy that is issued to an employer or trustee, establishing a group insurance plan for designated members of an eligible group, or (2) A property insurance policy issued to an insured who may issue certificates of insurance to cover properly of others.

Maximum Out of Pocket Expenses - The total dollar amount paid by the insured for health claims. Once reached the health policy will pay at 100%.

McCarran-Ferguson Act - The Federal Law passed in 1945 stating that continued regulation of the insurance industry by the states is in the public interest and that federal antitrust laws apply to insurance only to the extent that the industry is not regulated by state law.

Medicaid - State programs of public assistance to persons whose income and resources are insufficient to pay for health care.

Medical Examination - An examination given by a qualified physician to determine to the insurability of an applicant.

Medical Expense Insurance - A type of health insurance that provides benefits for expenses incurred for medical care, such as: expenses of physicians, hospital, nursing, and related health services, and supplies.

Medical Payments Insurance-Automobile - Medical payments insurance is an auto policy that reimburses you and your passengers (whether or not they're members of you family) for medical or funeral expenses stemming from an accident, regardless of who was responsible for the accident.

Medical Payments Insurance - Homeowner's - Medical payments insurance is a homeowner's policy that compensates people who sustain an injury while on your property, or whom you injure accidentally. (like a delivery boy who slops on a banana peel in your kitchen, or a guest you child accidentally hits with a badly pitched ball.) This coverage excludes the people who live in your house. In other words, it won't pay if you're the one who slips on that banana peel.

Medical Payments (Liability) Insurance - A coverage, available in various automobile and liability insurance policies, in which the insurer agrees to reimburse the insured and others, without regard for liability.

Medicare - The United States federal government program of Hospital Insurance (Part A) and Supplementary Medical Insurance (Part B) protection provided under the Social Security Act.

Minor Violation - Including but not limited to failure to stop, failure to observe traffic device, failing to yield right-of-way, following to close, improper lane use, improper passing, improper signal, improper turn, impeding traffic, inattentive driving, speeding, to fast for conditions, wrong way on one-way street.

Miscellaneous Expenses - Any expenses in connection with hospital insurance, hospital charges other than room and board, such as X-rays, drugs, laboratory fees, etc.

Misrepresentation - A false, incorrect, or incomplete statement of a material fact, made in the application for a policy.

Mode of Premium Payment - The frequency which premiums are paid monthly, quarterly, semiannually, or annually.

Moral Hazard - A hazard arising from any nonphysical, personal characteristic of a risk that increases the possibility of loss.

Morbidity - Relative incidence of a disease.

Morbidity Tables - Actuarial statistics showing the frequency and duration of a sickness.

Mortality Table - A table showing how many members of a group, starting at a certain age, will be alive at each succeeding age.

Motor Vehicle Record (MVR) - Your state's record of your automobile accidents and/or traffic violations. Your insurance rates are based on, among other factors, the quality of your driving history...a good record can mean lower rates.

Multi-Peril Policy - A package policy which provides protection against a number of separate perils in one contract.

Mutual Insurance Company - An insurance company in which the ownership and control is vested in the policyholders and a portion of surplus earnings returns to the policyholders.

Name Position Bond - A fidelity bond which covers losses caused by the dishonesty of only those employees named in the bond.

Named Perils - Coverage's in a property policy that provides protection from loss of perils specifically listed in the insurance policy. Examples of named perils are fire, windstorm, theft, smoke, etc.

National Association of Insurance Commissioners (NAIC) - The association of insurance commissioners of various states formed to promote national uniformity in the regulation and practice of insurance.

National Flood Insurance Program (NFIP) - A program backed by the United States government to provide flood insurance for fixed property. The NFIP writes policies directly and offers reimbursement to private carriers offering flood insurance.

Negligence - The failure to use the reasonable care that a prudent person would have used under the same or similar circumstances.

Net Premium - A portion of the premium rate designed to cover benefits of the policy, but not expenses, contingencies, or profit.

No-Fault - A type of auto insurance mechanism whereby the right to sue another party for damages caused by negligence is limited and, in exchange, first party benefits are offered.

No-Fault Automobile Insurance - A type of insurance in which financial losses resulting from an automobile accident are paid by your own insurer, regardless of who was at fault.

Non-Admitted Insurance Company - An insurance company not licensed to do business in a particular state.

Non-cancelable - A contract that the insured has the right to continue in force by the timely payments of premiums set forth in the contract. No changes are made by the insurer during this period of time.

Non-Confining Sickness - A sickness that does not confine an insured to his home or a hospital.

Noncontributory - A term applied to employee benefit plans or insurance, which the employer pays the full cost of the premium for all of the employees.

Non-Disabling Injury - An injury which does not qualify for total or partial disability.

No-Fault Insurance - No-fault insurance is designed to speed up claims payments to accident victims and to lower the cost of auto insurance by reducing the number of lawsuits for minor claims. Under no-fault insurance, a person's own insurance company pays for financial losses like medical expenses and lost wages due to an accident, regardless of who caused it. (in a fault system, your expenses won't be paid by the other party's insurance company until he or she has been proved negligent.) In exchange, the right to sue may be restricted in some cases. Personal Injury Protection (PIP)...This is a special form if insurance that pays for your medical expense and loss of income because of an automobile accident. PIP pays for expenses you've actually incurred, up to a specific, per person dollar amount.

Non-forfeitable Benefits - A benefit under a pension plan that belongs unconditionally to the participant of that plan.

Non-occupational Policy - An insurance contract which insures a person against off the job accidents or sickness.

Non-owned Auto - Any automobiles not owned, leased, hired, or borrowed which are used within the scope of business.

Nonparticipating - Insurance under which the policy holder is not entitled to share in the dividend distribution of the company.

Non-renewal - Termination of insurance coverage at an expiration date or anniversary date.

Notice of Cancellation - Written notice by an insurance company of their intent to cancel the policy.

Obligee - Anyone in whose favor an obligation runs. This term is used with surety bonds referring to a person, firm, or corporation protected by the bond.

Obligor - The principal, term used in bonds, one who is bound by an obligation.

Occupational Hazards - An occupational exposure the insured has that is greater than a normal physical danger by the very nature of the work in which the insured is engaged.

Occurrence - An event that results in a loss that is insured.

Occurrence Coverage - A liability insurance policy that covers claims arising out of occurrences that take place during the policy period.

Ocean Marine Insurance - Insurance for sea-going vessels, including liabilities connected with them, and their cargoes.

Optionally Renewable Contract - A contract of health insurance in which the insurer has the right to terminate the policy at any anniversary and, in a few cases, at any premium due date.

Ordinary Life Policy - A Whole Life insurance policy in which premiums are paid as long as an insured in living.

Out-of-Pocket Limit - The maximum coinsurance an individual is required to pay, after which an insurer will pay 100% of any covered expenses up to the policy limit.

Outpatient - A patient who is not a bed patient and does not need to be hospitalized for treatment.

Overhead Expense Insurance - A type of health insurance designed to help offset overhead expenses such as office rent, utilities, and employees' wages incurred during total disability.

Owners and Contractors Protective Liability Policy - An insurance policy that protects an insured against losses caused by the negligence of a contractor (or hired subcontractor by the contractor).

Package Policy - Any combination of two or more lines of coverage's into a single policy.

Paid-Up Insurance - Insurance on which all required premiums have been paid.

Paramedical Examination - Physical examination of an applicant by a trained person other than a physician, usually done for a life insurance policy or a individual health insurance policy.

Partial Disability - The result of an illness or injury which prevents an insured from performing one or more of the functions of their occupation.

Participating Policy - A life insurance policy under which the company agrees to distribute to policyholders the part of its surplus which its Board of Directors determines is not needed at the end of the business year.

Pension Benefits - A series of payments to be provided in accordance with the plan of benefits.

Pension Plan - A plan established and maintained by an employer, group of employers, or union to provide for the payment of determinable benefits to participants after retirement.

Percentage Participation - A provision in a health insurance contract that the insurer and insured will share covered losses in agreed proportions.

Peril - The cause of a loss insured against in a policy.

Permanent Life Insurance - A phrase used to cover any form of life insurance except term; generally insurance that accrues cash value, such as whole life.

Permit Bond - A bond that guarantees a person who has been issued a permit will comply with any laws and ordinances in which the permit was issued.

Persistency - A term used to refer to the length of time insurance remains continuously in force with a company.

Personal Articles Floater - A type of insurance designed to meet the needs for insurance on property of a moveable nature. This coverage usually protects against all physical loss, subject to special exclusions and conditions. Examples of this type of property include jewelry, furs, silverware, fine arts, and valuable collectors pieces..

Personal Injury Protection (PIP) Medical - First party no fault coverage in which an insurer pays, within specified limits, the medical, hospital, loss of work income, and funeral expenses of the insured.

Personal Lines - Those types of insurance, such as individual automobile or home insurance rather than for businesses or organizations.

Personal Property Coverage - This part of your homeowner's policy protects your belongings anywhere in the world, but there are a few limitations you should know about: 1) There are restrictions on the amount a standard homeowner's policy will pay on some items--jewelry or furs, for example (you can buy additional coverage for them separately), 2) The standard reimbursement for items that are damaged, lost, or stolen is their actual cash value--(original value minus depreciation). If you want to be reimbursed for what is will cost to replace them, select the replacement cost options. 3) Although the policy covers your possessions everywhere, it pays loss for losses incurred off your property. For example, a homeowner's policy might pay only 10% of its usual limit for loss on a item that your child took away to college.

Physical Damage - This coverage insures you against damage to your car. The physical damage section of an automobile policy can include both comprehensive coverage (which protect you against theft and vandalism, amount other things) and collision coverage.

Plan Administrator - The person(s) controlling money or property contributed to the plan, usually designated in the plan agreement.

Point-of-Service Plans - These plans permit insureds to choose providers outside the plan yet are designed to encourage the use of network providers. A hybrid of a HMO and PPO.

Policy - The legal document issued by the company to the policyholder, which outlines the conditions and terms of the insurance; also called the policy contract or the contract.

Policy Dividend - A refund of part of the premium on a participating insurance policy reflecting any difference between the premium charged and actual experience.

Policy Loan - A loan made by a life insurance company from its general funds to a policyholder on the security of the cash value of a policy.

Policy Reserves - The measure of the funds that a life insurance company holds specifically for fulfillment of its policy obligations.

Policy Term - The period of time for which an insurance policy provides coverage.

Policyholder - The person who owns a life insurance policy. This is usually the insured person, but it may also be a relative of the insured, a partnership or a corporation.

Policyholders' Surplus - Sum over and above liabilities available for an insurer to meet future obligations to its policyholders.

Pool - An organization of insurers or reinsurers through which particular types of risk are underwritten.

Pre-Admission Certification - The process in which a health care professional evaluates an attending physician's request for a patient's admission to a hospital to evaluate whether or not inpatient care is necessary.

Preexisting Condition - A physical and / or mental condition of an insured which first manifested itself prior to the effective date of a policy.

Preferred Provider Organization (PPO) - An arrangement whereby a third-party payer contracts with a group of medical care providers who furnish medical services at lower than usual fees in return for prompt payment and a certain volume of patients.

Premium - The sum paid by a policyholder to keep their insurance policy in force.

Premium Finance - Allows the insured to pay part of the premium when coverage takes effect and pay the rest during the policy period through arranged payments.

Primary Driver - The driver which customarily operates the vehicle.

Primary Insurance - Insurance that pays compensation for a loss ahead (first) of any other insurance coverage's the policyholder may have.

Principal Sum - An amount payable in one sum in the event of accidental death and in, some cases, accidental dismemberment.

Probate - A court-supervised process of validating or establishing distribution of assets of a deceased including the payment of outstanding obligations.

Probate Estate - That portion of the assets and liabilities whose distribution is supervised by the courts in the probate process.

Probationary Period - A period from the policy date to a specified time during which no sickness coverage is effective. This is designed to eliminate any sickness actually contracted before the policy went into effect.

Product Liability - Legal liability incurred by a manufacturer, merchant, or distributor because of injury or damage resulting from the use of their product.

Product Liability Insurance - Protection against financial loss arising out of the legal liability incurred by a manufacturer, merchant, or distributor because of injury or damage resulting from the use of a covered product.

Proof of Lose - Documentation presented to the insurance company by the insured in support of a claim so that the insurer can determine its liability under the policy.

Professional Liability including Errors & Omission - Coverage for negligence of a professional, should they perform an error or omission in their performance.

Property Damage-Uninsured Motorist - Property damage uninsured or underinsured coverage protect you in situation where your vehicle has been wrecked by another driver who doesn't have adequate coverage or no insurance at all, and can't pay for your losses. With this coverage, your own insurance company would pay up to the limit of your policy, to have your car fixed or replaced.

Property Insurance - Insurance providing financial protection against the loss of, or damage to, real and personal property caused by a covered peril.

Provision - A clause, sentence, or paragraph which of an insurance contract describes or explains a feature, benefit, condition, or requirement of any insurance protection afforded by the contract.

Proximate Cause - The effective cause of loss or damage; an unbroken chain of events between the occurrence and damage.

Punitive Damages - A court awarded amount that exceeds the economic losses and general damages of a defendant and is intended solely to punish the plaintiff because of reckless or malicious acts.

Pure Risk - Uncertainty whether a loss will occur. Only pure risks are insurable.

Qualification Period - A period during which an insured must be totally disabled before becoming eligible for disability benefits.

Quote - A estimate of insurance premium

Quick Assets - Assets that can be converted into cash quickly.

Radius of Operation - Used to determine rates for automobiles owned by a business.

Rate - The pricing factor upon which an insurance premium is based.

Rebating - Giving any valuable consideration (commission) to a prospect or insured as an inducement to buy.

Reimbursement - Payment of the expenses actually incurred as a loss covered by the policy.

Reinstatement - The resumption of coverage under a insurance policy which lapsed.

Reinsurance - The acceptance by one or more insurers of a portion of the risk underwritten by another insurer.

Renewable Term Insurance - Term insurance which can be renewed at the end of the term, at the option of the policyholder.

Renewal - A continuance of insurance under a policy beyond its original term by the insurer's acceptance of the premium for a new policy term.

Rental Insurance - A type of insurance that includes coverage similar to a homeowners policy to cover the personal property of a renter or tenant in a building.

Rental Reimbursement - Endorsement to provide reimbursement for car rental or substitute transportation expenses incurred because of disablement, caused by a loss covered under the physical damage section of the policy. When comprehensive coverage is purchased, the policy provides for the minimum limit of substitute transportation reimbursement for a loss caused by the theft of the entire vehicle.

Replacement - The substitution of insurance coverage from one policy contract to another.

Replacement Cost - The cost of replacing property without a reduction for depreciation. By this method of determining value, damages for a claim would be the amount needed to replace the property using new materials.

Representation - Statements made by an applicant in the application, which represents as being true to the best of his knowledge and belief, but which are not warranted as exact in every detail.

Rescission - Termination of an insurance contract by the insurer on the grounds of material misstatement on the application for insurance.

Reserve - The amount required to be carried as a liability in the financial statement of an insurer, a sum set aside by an insurance company as a liability to fulfill future obligations.

Residual Disability - A period of partial disability that immediately follows a period of total disability.

Residual Market - A source of insurance available to applicants who are unable to obtain insurance through ordinary methods in the voluntary market.

Retention - The amount of risk retained by an insurance company and not the insured.

Retrocession - A process by which a reinsurer obtains reinsurance from another company.

Risk - The chance of loss. Also used to refer to the insured or to property covered by a policy.

Robbery - The taking of property from a person by force or threat of violence.

Rollover - Transfer of an IRA or other qualified pension funds from one financial institution to another.

Self-Insurance - A form of risk financing through which a firm assumes all or a part of its own losses.

Settlement - A policy benefit of claim payment.

Settlement Options - The several ways, other than immediate payment in cash, which a policyholder or beneficiary may choose to have policy benefits paid out.

Standard Insurance - Insurance written on the basis of regular morbidity underwriting assumption used by an insurance company and issued at normal rates.

Standard Markets - Insurance companies for which the vast majority of people qualify for insurance.

Standard Provision - The contract provisions required by state statutes until superseded by the uniform policy provision.

Standard Risk - An individual who, according to a company's underwriting standards, is entitled to purchase insurance protection without extra rating or special restrictions.

State Insurance Department - A department of a state government whose duty is to regulate the business of insurance and give the public information on insurance.

Strict Liability - Usually dealing with property insurance, the liability that manufacturers and merchandisers may be subject to for defective products sold by them for damages, regardless of fault or negligence.

Subrogation - The process by which an insurance company seeks reimbursement from another company or person for a claim it has already paid.

Substandard Insurance - Insurance issued with an extra premium or special restriction to those persons who do not qualify for insurance at standard rates.

Substandard Risk - An individual, who, because of poor health history or physical limitations, does not measure up to the qualification of a standard risk.

Supplementary Contract - An agreement between a life insurance company and a policyholder or beneficiary by which the company retains the cash sum payable under an insurance policy and makes payments in accordance with the settlement option chosen.

Surplus - An amount by which the value of an insurer's assets exceeds their liabilities.

Surplus Lines - A risk or a part of a risk for which there is no normal insurance market available, insurance written by non-admitted insurance company.

Term - A period of time a policy or bond is issued.

Term Insurance - Life insurance payable to a beneficiary only when an insured dies within a specified period, (5, 10, 15, or 20 years). This is the quickest way to "build" an estate.

Total Disability - A degree of disability from injury or sickness that prevents the insured from performing the duties of any occupation form remuneration or profit. The definition in any given case depends on the wording in a covering policy.

Towing and Labor - Cost incurred when a covered auto is disabled, up to the amount shown on declaration sheet. Generally labor charges are only allowed when service performed at place of disablement.

Transportation Benefit - This benefit was created to help cover the costs of transporting a deceased insured. The death benefit paid to an insured's beneficiary will be increased by $5,000 if death occurs more than 100 miles from the insured's principal residence.

Trust - A legal instrument allowing one party to control property for the benefit of another.

Turnover Rate - Rate at which employees terminate covered service other than by death or retirement.

Umbrella Liability Insurance - Your home and auto policies both provide liability coverage--insurance that pays other people if you're responsible for injuring them or damaging their property. Umbrella liability is extra coverage--a policy that pays for liability losses in excess of those covered in homeowners and auto insurance. A 1 million umbrella policy can increase your total liability protection from say, $300,00, to $1.3 Million. It also covers risks not insured in auto and homeowners policies--like slander, invasion of privacy, and liability for property that you don't own while it's in you care. Umbrella coverage would pay, for example, if you hurt somebody while driving a motor boat that didn't belong to you. In short, umbrella liability insurance provides excess amounts of insurance above the primary policy as well as additional liability coverage's. 

Underinsured Motorist - This coverage pays when you or your passengers are injured as a result of negligence by someone with insufficient liability insurance to cover your losses. The definition of an underinsured motorist varies from state to state.

Underwriter - A technician trained in evaluating risks and required to determine rates and coverage's. The term derives from the practice of Lloyd's, where each person is willing to accept a portion of the risk, writing his or her name under the description of the risk.

Underwriting - The process of selecting risks for insurance and determining in what amounts and on what terms the insurance company will accept the risk.

Uninsured/Underinsured - Uninsured motorist coverage pays for injuries sustained by you and passengers in your car that are caused by an uninsured motorist or a hit and run driver. Your own underinsured motorist coverage pays for your medical treatment, rehabilitation, losses from pain and suffering and funeral costs when you or your passengers are injured by someone with insufficient liability insurance to cover your losses. The definition of an under-insured motorist varies from state to state.

Underinsured Property Damage - Physical injury to, destruction of or loss of tangible property.

Underinsured Bodily Injury - Bodily injury underinsured coverage protect you in situations where you have been injured and the other driver has inadequate coverage. Your insurance company would then pay you up to the limit of your policy, for the injuries you suffered.

Uninsured Bodily Injury - Bodily injury uninsured coverage protect you in situations where you have been injured and the other driver has no insurance at all. Your insurance company would then pay you up to the limit of your policy, for the injuries you suffered.

Uninsured Motorist - This coverage pays for injuries sustained by you and your passengers and damage to your property, that are caused by an uninsured motorist or a hit and run drive.

Uninsured / Underinsured Motorist Coverage - A type of insurance that pays the policyholder and passengers in their automobile for bodily injury caused by the owner or operator of an uninsured or inadequately insured automobile.

Uninsured Motorist Property Damage - Property damage uninsured or underinsured coverage protect you in situation where your vehicle has been wrecked by another driver who doesn't have adequate coverage or no insurance at all, and can't pay for your losses. With this coverage, your own insurance company would pay up to the limit of your policy, to have your car fixed or replaced. This varies from state to state.

Violation - Is a conviction of a major or minor traffic violation involving you or another resident of your household.

Waiting Period - The length of time an employee must wait from a date of employment or application for coverage, to the date his/her insurance is effective.

Waiver - An agreement attached to a insurance policy which exempts from coverage certain disabilities or injuries that otherwise would be covered by the policy.

Waiver of Premium - A provision in some policies to continue premium payments due during a period of continuous total disability that has lasted for a specified length of time.

Whole Life Insurance - A life insurance policy that allows benefits to be payable to a beneficiary at the death of the insured whenever that occurs. Premiums may be payable for a specified number of years (limited payment life) or for life (straight life).

Will - A legal statement of an individual's wishes concerning the disposal of his or her property after death.

Workers Compensation - A system established under state law that provides payments, without regard to fault, to employees injured in the course and scope of their employment.

Workers' Compensation Insurance - Insurance against liability imposed on certain employers to pay benefits and furnish care to employees that are: injured, killed, or are sick due to occupational hazards.

Yacht Insurance - A type of insurance providing hull coverage and liability insurance on pleasure boats.