Idea Transcript
GLOSSARY
C ER T I F I C A T E R EQ U EST ( / R ESO U R C ES/ C ER T I F I C A T ER EQ U EST ) F A Q ( / R ESO U R C ES/ F A Q )
Personal Insurance
Life Insurance
Health Insurance
Business Insurance
Appurtenant Structures Structures that are also on the property covered by an insurance policy. Examples might be a storage shed or barn. Most property policies have a limit they will pay for other structures based on a percentage of the main buildings value.
B L O G ( / B L O G ) I N SU R A N C E G L O SSA R Y ( / R ESO U R C ES/ G L O SSA R Y) 2 4 / 7 C L A I M S R EPO R T I N G ( / R ESO U R C ES/ R EPO R T - A CL AIM ) PA Y YO U R B I L L ( / R ESO U R C ES/ PA Y- YO U R BIL L )
Assigned Risk A method to provide insurance to the uninsurable. In mandatory insurance states, everyone must have insurance regardless of their risk or record. These states require that each company writing insurance in their state must take a number of clients that they would not insure otherwise. Automobile Coverage Any insurance pertaining to the use or ownership of a vehicle. Common coverages are liability, physical damage and personal injury. Basic Limits
Q U O T E R EQ U EST ( / Q U O T ER EQ U EST )
The minimum limits of liability as required by state or local law. Beneficial Interest Denotes someone who is not necessarily the insured on a property policy but has a financial interest in the property (i.e. they would benefit from any insurance on the property). Binder A binder is a legal agreement that serves to effect insurance coverage for a specified period of time until the actual insurance policy can be issued. A binder can be issued by either an insurance agent or company and must provide the following information: Name of insured Type of insurance coverage Limits of insurance Covered perils Name of insurance company Blanket Coverage For property insurance, a blanket sets a single limit (maximum payout) for multiple buildings or risks. For health insurance, a blanket covers an entire group for a list of coverages (i.e. medical, dental, etc.). Bodily Injury Coverage "Bodily injury" is defined as meaning bodily harm, sickness, or disease, including required care, loss of services, and death that results. Bond A three part contract in which one party guarantees the performance, act or behavior of another party for a third party. The two most common types of bonds are Surety and Fidelity. Builders' Risk Coverage Indemnifies for loss of or damage to a building under construction. Insurance is normally written for a specified amount on the building and applies only in the course of construction. Coverage customarily includes fire and extended coverage and vandalism and malicious mischief. Builders risk coverage can be extended to a "special" form as well. The builders risk policy also may include coverage for items in transit to the construction site (up to a certain percentage of value) and items stored at the site. Cancellation The end of an insurance policy. Usually applied to the premature ending of the policy for nonpayment but may be used to describe the ending of any insurance policy. Claim The formal request by a policy holder or claimant to be paid under the terms of the insurance policy. Claims Made A method of providing liability insurance in which the insurer agrees to cover all claims asserted against the insured during a specified date period regardless of when the claim occurred. All claims-made policies have a "retro" date which specifies the beginning date for claims to be considered. Coinsurance Coinsurance is an arrangement by which the insured, in consideration of a reduced rate, agrees to carry an amount of insurance equal to a percentage of the total value of the property insured. An example is if you have guaranteed to carry insurance up to 80% or 90% of the value of your building and/or contents, whatever the case may be. If you don't, the company pays claims only in proportion to the amount of coverage you do carry. Collision Coverage This covers loss to the insured person's own vehicle caused by its collision with another vehicle or object. Comprehensive Automobile Coverage Owned Automobiles Covers liability rising out of the ownership, maintenance or use of automobiles. Hired Automobiles Covers liability for the use of hired automobiles in your business. Non-Owned Automobiles Covers liability for the use of non-owned automobiles in your business. An example would be an employee using his/her own car on an errand for you. Uninsured Motorists Protects insureds who are not contributorily negligent against bodily injury caused by negligent uninsured motorists. Comprehensive Pays for damage to or the loss of automobiles from perils other than collision. A deductible applies. Collision Pays for damage to or the loss of automobiles from upset or collision with another object. A deductible applies. Consequential Loss or Damage Consequential loss or damage -- as opposed to direct loss or damage -- is indirect loss or damage resulting from loss or damage caused by a covered peril, such as fire or windstorm. In the case of loss caused where windstorm is a covered peril, if a tree is blown down and cuts electricity used to power a freezer and the food in the freezer spoils, if the insurance policy extends coverage for consequential loss or damage then the food spoilage would be a covered loss. Business Interruption insurance, extends consequential loss or damage coverage for such items as extra expenses, rental value, profits and commissions, etc. Contents Contents includes just about anything in the home (including garage and outbuildings) belonging to the policyholder or a member of his family living in the same house, or to resident domestic servants. It also includes property, which is not owned by the policyholder but for which he is responsible, such as rented property. Furniture, furnishings, household goods, electrical appliances, food and drink, clothes, and money up to a specified limit all count as 'contents'. Also included are movable fixtures and fittings, for example, special lighting fittings which would be taken away on removal. Fittings, which would be left in the house, such as built-in furniture, count as part of the 'buildings', although fitted carpets are classed as 'contents'. Certain types of property are excluded. The cover applies principally to contents actually inside the home, although there is some cover under a 'standard' policy for contents temporarily away from the home. Some policies also include theft of household contents from the garden or immediate vicinity of the home. Crime Insurance Crime Insurance pays an owner for the loss of property due to its wrongful taking by someone else through employee dishonesty, burglary, robbery, or theft. There are many different types of crime coverage available, including coverage for computer theft and fraud. Cross Liability Coverage In the event of claim by one insured for which another insured covered by the same policy may be held liable, this endorsement covers the insured against whom the claim is made in the same manner as if separate policies had been issued. However, it does not operate to increase the insurance company's overall limit of liability. Debris Removal Clause This pays for the insured's expenses to remove debris of covered property caused by a Covered Cause of loss. This does not include "pollutants" and must occur during the policy period and reported within 180 days of the occurrence. Deductible An excluded amount or threshold for payment on an insurance policy. A $500 deductible would mean the insurance policy will start paying after they have deducted the first $500 from the claim amount. Dwelling The structure of the home, namely the foundations, walls, floors, doors, windows, roof, plumbing, fixed electrical wiring, decorations, and insulation. It also includes permanent fixtures and fittings, such as kitchen units and fitted bedroom furniture. The general rule is that everything immovable that would be left behind on removal is treated as 'dwellings', and everything else as 'contents'. Fitted carpets are however generally treated as 'contents'; and whether TV and radio aerials are treated as 'dwelling' or 'contents' varies between insurers. 'Dwelling' also extends to include outbuildings, garages, greenhouses and sheds; paths, drives, walls, and patios; and - for most of the risks covered by policy - fences and gates. Earned Premium The amount of the policy premium used at the time of a cancellation or expiration relative to the policy term. For example, if the policy term is one year then the earned premium at the six month point is 50% of the total premium. This is not an indicator of how much you'll get back if you cancel the policy because the total premium was partially based on the term. Earthquake Coverage Protects against damage by earthquakes and earth movement. Deductibles are typically a percentage of the property value. Effective Date The first day of a policy term. Denotes the beginning of the insurance coverage. Endorsement A document which changes or alters the basic insurance policy. Excess Coverage A type of insurance which covers all or a portion of a loss which exceeds an agreed amount. Excess policies usually do not come in to effect until the primary insurance limit has been reached. Excess policies provide higher limits and offer protection against very large losses. Fair Plan Designed to provide "fair access to insurance" for property owners in deteriorating urban areas who have difficulty buying insurance. It assures the owner they will receive a property inspection and will be provided insurance as long as the property is properly maintained and and improvements recommended to make the property more insurable have been carried out. Fire Coverage Also known as property insurance, this coverage protects against property losses by fire or lightning. Also covers smoke and water damage from a fire. Fire Legal Liability Coverage Coverage needed if you occupy leased or rented property for which you could be held legally liable for damage to the property due to fire or explosion. Floater An insurance policy that "floats around" with whatever is insured regardless of where. Homeowners Insurance Insurance that combines liability insurance and hazard insurance. Required by most mortgage lenders. Host Liquor Liability Coverage Protects the hosts of business or social functions where alcoholic beverages are sold or served. Indemnify To reimburse or otherwise pay for an incurred loss. Independent Agent An insurance agent that is affiliated with more than a single insurance company. An independent agent is able to shop several insurance carriers for the best plan for a particular insured. Inland Marine Coverage Inland marine insurance indemnifies loss to moving or moveable property and is an outgrowth of ocean marine insurance. Historically, ocean marine insurance held the transporter responsible for property loss before, during, and after the completion of the voyage. In the 1800's, the non-ocean portion of the journey grew as cargoes were transferred to barge, etc., and the term "inland marine" was coined. Inland marine policies became known as "floaters" since the property to which coverage was originally extended was essentially "floating." Insurance A contract by which one undertakes to indemnify another or to pay a specified amount upon determinable contingencies. Insurance Fraud Insurance fraud is any act or omission with the purpose of illegally obtaining a property and casualty insurance benefit. This definition encompasses the full range of fraudulent acts, from completely fabricated claims, to inflation or padding of legitimate claims, to false statements on insurance applications, to internal fraud. Jewelry Floater An insurance policy which covers jewelry against loss or damage wherever it might be. Lapse Typically used in life insurance to indicate the termination of a policy. Law Exclusion A statement in most property policies which specifies that changes in law or ordinance are not valid perils or causes of loss. This means if your property is destroyed or damaged in the course of enforcing a law, you're not covered. Law coverage is available separately. Leasehold Interest Coverage Leasehold Interest insurance provides coverage for a tenant in the event his or her lease is terminated. The lease may be terminated due to: 1. a clause in the lease specifying that the lease is terminated in the event of property damage causing the premises to be unavailable for tenancy, or 2. condemnation of the leased premises. It is a form of "time element" coverage that serves to provide coverage for the difference between the old rental and a new, likely more expensive rental. Liability Coverage Insurance for your screw ups. A liability insurance policy will pay up to a stated limit for events resulting from the insured's negligence. A liability policy will also usually pay for property damage and medical expenses incurred by the injured party. Limit The maximum amount to be paid by an insurance policy. Many policies have split limits meaning they'll pay one amount per person and another amount per accident. A third split may be included to indicate the maximum amount the policy will ever pay regardless of the number of people or accidents. Liquor Liability Coverage Liquor liability insurance provides coverage for bodily injury or property damage for which an insured may be held liable by reason of the following: Causing or contributing to the intoxication of any person; Furnishing alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or Violating any statute, ordinance, or regulation relating to the sale, gift, distribution, or use of alcoholic beverages. This coverage applies only if the insured is involved in the following activities: Manufacturing, selling, or distributing alcoholic beverages; Serving or furnishing alcoholic beverages for a charge, whether or not such activity requires a license or is for the purpose of financial gain or livelihood; or Serving or furnishing alcoholic beverages without a charge, if a license is required for such activity. Loss of Use Coverage Loss of Use is an extra expense you incur while staying at a temporary location if your condo or home becomes uninhabitable. While most policies allow a limited dollar amount for this coverage. Maximum Possible Loss (MPL) A formal estimate of the maximum dollar amount at risk by the company or companies providing an insurance policy. Medical Payments A general liability coverage in which the insurer reimburses without regard to the insured's liability, the insured and others (as specifically provided in the policy) for medical and funeral expenses incurred by such persons as a result of bodily injury or death sustained by accident under the conditions specified in the policy. Multi-Line Insurance An insurance policy which provides more than one coverage in a single policy. Also known as a Package Policy. Multi-Peril Insurance An insurance policy that insures more than one peril or cause of loss. An All-Risk policy is an example of a multi-peril policy. This is not the same as a Multi-Line policy which includes more than one type of coverage. Mutual Insurance Company An insurance carrier or provider which is owned exclusively by its insureds. A mutual insurance company has no stock. Any operating profit is paid to their insureds in the form of a premium rebate. Named Insured The person or persons designated as the insured in an insurance policy. Named Perils Insurance An insurance policy which covers only defined perils or causes of loss. This is the opposite of an All-Risk policy which covers all perils except those specifically excluded. Non-Owned and Hired Car Coverage Non-owned and hired car coverage is for policies written with limits of liability of $1 million or more. It provides coverage for rental or borrowed autos as long as the insured does not own any private passenger vehicles, pick-up, panel truck or van and the use does not exceed 30 days. Nonadmitted Carrier An insurer not licensed to write insurance in a specific state. Nonrenewal When an insurance company decides it will not provide you insurance anymore. Occurrence (CGL) This term means an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured. Occurrence Policy A type of liability policy in which a insurance provider is liable for any claim which occurred during the policy period regardless of how far in to the past it occurred. This is the traditional type of liability policy but has lost favor because of lawsuits being brought years after the fact. Large liability risks are typically covered by claims-made policies which are responsible only for claims submitted during the covered policy period. Ordinance Exclusion A statement in most property policies which specifies that changes in law or ordinance are not valid perils or causes of loss. This means if your property is destroyed or damaged in the course of enforcing a law, you're not covered. Ordinance coverage is available separately. Ordinance or Law Coverage Coverage for Loss to the Undamaged Portion of the Building Pays for the loss of value of an undamaged portion of the existing building which must be demolished and/or removed to conform with municipal ordinance, code, etc. Demolition Cost Pays for the cost of demolition of the undamaged portions of the building necessitated by the enforcement of building, zoning or land use ordinance or law. Increased Cost of Construction Pays for any increased expenses incurred to replace the building with one conforming to building laws or ordinances, or to repair the damaged building so that it meets the specifications of current building laws or ordinances. Peril The cause of a loss. Examples of perils are fire, wind, an accident and acts of vandalism. Personal Articles Floater Insurance on items you have scheduled (listed), anywhere they might be and against all perils or causes of loss except those specified in the insurance policy. Personal Automobile Coverage Insurance for vehicles owned by individuals and not used for business purposes other than driving to and from work. Usually comprised of collision (stuff you hit with your vehicle), comprehensive (your vehicle) and medical coverages. Personal Injury Liability Coverage This insurance coverage protects against false arrest, detention or imprisonment, or malicious prosecution; libel, slander, defamation, or violation of right of privacy; and wrongful entry, eviction, or other invasion of right of private occupancy. Personal Package Policy A single policy for individuals which combines property, automobile and sometimes other coverages in to a single insurance policy resulting in a lower cost than if each were purchased separately. Personal Property Floater (PPF) Insurance for homeowners covering all household effects such as furniture, appliances and clothing. Typically does not require the items to be specified on a list or schedule but does have a fixed limit. Physical Damage Coverage Insurance against damage to tangible property. Automobile physical damage covers damage to your vehicle. Pleasure Use A term used to indicate a vehicle is not used for any business purpose other than driving to and from work. Required to obtain private passenger automobile insurance. Policy A formal contract outlining the terms and conditions of the insurance provided by an insurance carrier. Premium The amount you are asked to pay for an insurance policy. Private Passenger Automobile Coverage Insurance for vehicles owned by individuals and not used for business purposes other than driving to and from work. Usually comprised of collision (stuff you hit with your vehicle), comprehensive (your vehicle) and medical coverages. Property Coverage Protects against loss of or damage to buildings and personal property. Property Damage Liability Coverage Protects against loss caused by your negligent damage of someone else's property. Protection Class A scale of 1 to 10 used to measure the fire protection of every area in the United States. Ten is the worst and one is the best. The rating is based on such items as the water supply, the fire department and climate. Punitive Damages Punitive damages are awarded in civil law suits to discourage intentional wrongdoing, wanton and reckless misconduct and outrageous behavior. The majority of courts in the United States, including those of New York hold that punitive damages are not compensation for injury, but, instead, are private fines levied by civil juries to punish reprehensible conduct and to deter its future occurrence. Reinstatement This has two meanings: 1. The restoration or continuation of an insurance policy that was cancelled or suspended for a portion of the policy period or, 2. The restarting of a policy limit after a claim. This is normally associated with fire coverage which commonly restarts the limit after it has paid out. Renewal A new policy which replaces one that is expiring or cancelled. Renters Insurance Very much like a homeowners policy without the property coverage since renters do not own the building they live in. Covers liability and personal effects such as furniture and clothing. Fine art, antiques and collectibles can be added to a renters policy just like for homeowners. Replacement Cost Coverage This form of insurance provides coverage on the basis of full replacement cost without deduction for depreciation on any loss sustained, subject to the terms of the co-insurance clause. This coverage applies to both building and contents items as specified on the face of the policy. No deduction is taken for depreciation in arriving at the proper amount of insurance needed to comply with the co-insurance clause. Retroactive Date For a claims-made policy, the retroactive date is the earliest date for which a loss will be considered. It is typically the effective date of the first year the policy was provided by an insurance carrier but date may be moved for additional premium paid. Return Premium The amount of premium that is returned to you by an insurance carrier after a policy is cancelled during the policy period. Risk What makes you buy insurance. It is anything you don’t want to lose or have damaged including yourself. Schedule In insurance, a schedule is a list attached to a policy. A jewelry schedule is a list of jewelry you own that is covered by an insurance policy. A vehicle schedule is a list of vehicles attached to and covered by an insurance policy. Specified Perils An insurance policy which only covers causes of loss or perils specified in the policy. Split Limits The practice of providing separate limit amounts for each type of coverage contained within a single policy. An automobile policy could have separate limits for bodily injury and physical damage. Stated Amount When the value of a property is stated within the policy and is not dependent on valuation methods applied at the time of a loss. Subrogation In insurance, the process where an insurance carrier negotiates in behalf of the insured to settle a claim the carrier is liable for. Sue and Labor Clause A stipulation in a policy that the insured will take all necessary means to save property from further loss and recover damages from others who might have caused the loss. Under the terms of this clause, the insurance carrier agrees to pay all costs even if they exceed the limit of the policy. Tail In insurance, a tail refers to claims and losses that have not yet been reported or discovered. Tail Coverage For claims-made policies, tail coverage is purchased to protect against losses or claims which have not yet been discovered or reported. In this case, a retroactive date is purchased. For occurrence policies, this is unnecessary as claims are handled according to when they happened instead of when they were reported or discovered. Tort A tort is an unintentional violation of another person's rights, usually due to negligence. It is different than a crime, which generally is an intentional violation of another's rights. A tort is subject to civil action and subsequent judgement for damages payable to the wronged party, whereas a crime is subject to criminal action and subsequent penalty. Transit Coverage Coverage of the insured's property while in transit over land from one location to another. Property insurance policies typically provide coverage only at locations identified in the policy. Umbrella Liability Coverage This type of liability insurance provides excess liability protection. Your business needs this coverage for the following three reasons: It provides excess coverage over the "underlying" liability insurance you carry. It provides coverage for all other liability exposures, excepting a few specifically excluded exposures. This is subject to a large deductible of $10,000. It provides automatic replacement coverage for underlying policies that have been reduced or exhausted by loss. Underinsured Motorist Coverage Fills in when a negligent party doesn't have enough insurance to cover your loss or claim. Underlying Limits Associated with excess and umbrella coverages. Refers to the limit of the primary policy and where the umbrella or excess coverage begins. Most excess and umbrella policies have a required underlying limit. Unearned Premium The amount of the unused policy premium at the time of a cancellation or expiration relative to the policy term. For example, if the policy term is one year then the unearned premium at the six month point is 50% of the total premium. This is not an indicator of how much you'll get back if you cancel the policy because the total premium was partially based on the term. Watercraft Insurance Typically sold as a package policy comprised of physical damage (hull), personal injury and liability coverages. Protects from the risks associated with owning and operating a watercraft. Willful Injury Coverage for self-inflicted or intentional injuries to others are usually excluded from most insurance policies.
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