Here is a list of insurance terms that can seem confusing when you hear them all at once, but hopefully these explanations will answer your questions. If you are looking for a term that is not listed, there is a link that will lead you to a website full of insurance definitions
- A representative of the insurer who seeks to determine the extent of the insurer's liability for loss when a claim is submitted.
-individual who sells and services insurance policies in either of two classifications:
Automobile Liability Insurance
- Independent agent represents at least two insurance companies and (at least in theory) services clients by searching the market for the most advantageous price for the most coverage. The agent's commission is a percentage of each premium paid and includes a fee for servicing the insured's policy.
- Direct or career agent represents only one company and sells only its policies. This agent is paid on a commission basis in much the same manner as the independent agent.
- Coverage if an insured is legally liable for bodily injury or property damage caused by an automobile
- Insurance salesperson that searches the marketplace in the interest of clients, not insurance companies.
- That type of insurance that is primarily concerned with losses caused by injuries to persons and legal liability imposed upon the insured for such injury or for damage to property of others. It also includes such diverse forms as plate glass, insurance against crime, such as robbery, burglary and forgery, boiler and machinery insurance and Aviation insurance. Many casualty companies also write surety business.
- A demand made by the insured, or the insured's beneficiary, for payment of the benefits as provided by the policy.
- Covers physical damage to the insured's automobile (other than that covered under comprehensive insurance) resulting from contact with another inanimate object.
- 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.
- Amount of loss that the insured pays before the insurance kicks in
- The return of part of the policy's premium for a policy issued on a participating basis by either a mutual or stock insurer. A portion of the surplus paid to the stockholders of a corporation.
- The amount of the premium that as been paid for in advance that has been "earned" by virtue of the fact that time has passed without claim. A three-year policy that has been paid in advance and is one year old would have only partly earned the premium.
- 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.
- 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.
- Items or conditions that are not covered by the general insurance contract.
- The length of time after a premium is due and unpaid during which the policy, including all riders, remains in force. If a premium is paid during the grace period, the premium is considered to have been paid on time. In Universal Life policies, it typically provides for coverage to remain in force for 60 days following the date cash value becomes insufficient to support the payment of monthly insurance costs.
Health Maintenance Organization (HMO)
- Prepaid group health insurance plan that entitles members to services of participating physicians, hospitals and clinics. Emphasis is on preventative medicine, and members must use contracted health-care providers.
- An optional property coverage endorsement offered by some insurers that increases the policy's limits of insurance during the policy term to keep pace with inflation.
Losses and Loss
- This represents the total reserves for unpaid losses and loss-adjustment expenses, including reserves for any incurred but not reported losses, and supplemental reserves established by the company. It is the total for all lines of business and all accident years
Mortgage Insurance Policy
- In life and health insurance, a policy covering a mortgagor with benefits intended to pay off the balance due on a mortgage upon the insured's death, or to meet the payments due on a mortgage in case of the insured's death or disability.
- The amount of premium minus the agent's commission. Also, the premium necessary to cover only anticipated losses, before loading to cover other expenses.
- An event that results in an insured loss. In some lines of business, such as liability, an occurrence is distinguished from accident in that the loss doesn't have to be sudden and fortuitous and can result from continuous or repeated exposure which results in bodily injury or property damage neither expected not intended by the insured.
- A predetermined amount of money that an individual must pay before insurance will pay 100% for an individual's health-care expenses.
- Insurance for individuals and families, such as private-passenger auto and homeowners insurance.
- The written contract effecting insurance, or the certificate thereof, by whatever name called, and including all clause, riders, endorsements, and papers attached thereto and made a part thereof.
- The automatic re-establishment of in-force status effected by the payment of another premium.
- The dollar amount needed to replace damaged personal property or dwelling property without deducting for depreciation but limited by the maximum dollar amount shown on the declarations page of the policy.
- Risk class, in insurance underwriting, is a grouping of insureds with a similar level of risk. Typical underwriting classifications are preferred, standard and substandard, smoking and nonsmoking, male and female.
- The amount by which assets exceed liabilities.
- Fee charged to a policyholder when a life insurance policy or annuity is surrendered for its cash value. This fee reflects expenses the insurance company incurs by placing the policy on its books, and subsequent administrative expenses.
Total Annual Loan Cost
- The projected annual average cost of a reverse mortgage including all itemized costs.
- A loss of sufficient size that it can be said no value is left. The complete destruction of the property. The term also is used to mean a loss requiring the maximum amount a policy will pay
- 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.
- The individual trained in evaluating risks and determining rates and coverages for them. Also, an insurer.
- 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.
- See "elimination period."
For more terms, visit http://www.ambest.com/resource/glossary.html