Glossary of Terms (categorized)

Auto

Collision

• Insurance coverage available to provide protection against physical contact of an automobile with another inanimate object resulting in damage to the insured's car.

Commercial

• Provides coverage for liability, physical damage, and other exposures for automobiles owned or leased by businesses, partnerships, or organizations.

Comprehensive

• Automobile insurance providing protection in case of physical damage suffered by the insured's car, other than collision or theft. Example: Fire, Flood.

Individual Private Passenger

• Personal automobile coverage for liability, physical damage, and other exposures for automobiles owned or leased by individuals or families.

Liability

• Policyholder's legal liability resulting from injuries to other persons or damage to their property.

Medical Payments

• Coverage, available in various liability insurance policies, in which the insurer agrees to reimburse the insured and others, without regard to the insured's liability, for medical or funeral expenses as the result of bodily injury or death by accident under specified conditions.

Physical Damage

• Provides coverage to vehicles owned, leased, or operated by a covered person due to collision or under comprehensive coverage and non-collision hazards, such as fire, theft, or falling objects.

Rental Reimbursement

• An automobile coverage that pays the cost of a vehicle rental during a period the insured vehicle requires covered repair.

Underinsured Motorist

• Protection covers the policyholder and family members if injured by a motorist who carries liability limits less than his/her proportionate share of the total liability. Also provides coverage if the other driver's insurance is with a financially irresponsible insurer.

Uninsured Motorist

• Protection covers the policyholder, family members, and passengers if injured by a hit-and-run motorist or driver who carries no liability insurance.

Homeowners

Condo/Town

• Coverage protecting the insured's personal property and loss of use. Coverage may include protection against: fire, lightning, vandalism, malicious mischief, wind, hail, explosion, riot, civil commotion, vehicles, aircraft, smoke, falling objects, weight of ice, sleet, or snow, and volcanic eruption.

Farmowner / Ranchowner

• A contract which combines personal and business multiple-line insurance; coverage for the entire farm and ranch operations, may include the dwelling.

Group Homeowners

• Homeowners insurance containing a benefit package policy that combines property and liability coverage of property and individuals. Coverage obtained by a group member, enrollee, or certificate-holder through a master contract issued to the association/group in which the individual or family belongs.

Homeowners

• Coverage for homes, including dwelling coverage. Protects owners and tenants against losses or damage to their residential property and provides protection against liability claims by others suffering injury or damages while on such property.

Medical Payments

• Coverage provided under the homeowner's policy. The insurance includes medical expenses of persons who sustain bodily injury at an insured's premises without regard to negligence. Medical expenses include first aid, surgery, x-rays, dental services, prosthetic devices, and transportation by ambulance, and funeral services.

Mobile Homeowner

• Coverage for mobile homes, which are classified as portable units that are built to be towed on their own chassis with frame and wheels, but are permanently affixed to the real estate, and are designed for year-round living.

Renters / Tenants

• Coverage for the contents of a renter's home / apartment and liability. Tenant policies reflect homeowners insurance, except they do not cover the structure. Covers inside structure changes such as carpeting, kitchen appliance, and built-in bookshelves.

Replacement Cost

• Sum needed to replace an insured's damaged or destroyed property with one of a like kind and quality, equivalent to actual cash value, minus physical depreciation (fair wear & tear) and obsolescence.

Accident & Health

Disability Income

• Provides benefits in case of the insured's inability to perform all or part of his/her occupational duties because of an accident or illness.

Health Insurance Portability and Accountability Act (HIPAA)

• Guarantees that employers are not able to impose preexisting condition limitations in the insurance they offer to new employees who had insurance coverage for at least 12 months with their previous employer.

Home Health

• Health care provided in the home of the patient, usually by a private nurse or a state-licensed home health care agency. Services are usually limited to part-time or intermittent nursing care and physical or occupational rehabilitation.

Hospital Indemnity

• Provides a predetermined flat benefit for each day of hospitalization regardless of expenses incurred.

Long Term Care

• Designed to provide coverage for not less than twelve consecutive months for necessary medical services provided in a setting other than an acute unit of a hospital.

Medicare Supplement

• Provides accident and health expenses not covered under Medicare. The "policy type" identifies which of the standard Medicare supplement policies is involved in the complaint. The various types of standard policy form choices ("A" through "J") are available for Medicare supplemental insurance coverage. Choice "P" means those insured before June 1, 1992 and no longer being offered. Choice "O" means "other" and not meeting any of the choices listed.

Mental Health

• Coverage for professional mental health services. Including psychologist, crisis centers, rehabilitative therapy, etc. An emotional or organic mental impairment (usually excluding senility, retardation or other developmental disabilities, and substance addiction); a psychoneurotic or personality disorder; any psychiatric disease identified in a medical manual. (American Psychiatric Association's Diagnostic and Statistical Manual).

Occupational Accident

• An accident arising out of and in the course of employment and covered by workers' compensation laws.

Fire & Allied Lines

Builders Risk

• A property insurance policy that provides direct damage coverage on buildings or structures while they are under construction. It also covers foundations, fixtures, machinery, and equipment used to service the building, and materials and supplies used in the course of construction.

Fire - Real Property

• Coverage of insured's real estate property against the peril of fire.

Fire & Allied Lines

• Insurance covering the peril of fire damage to property, as well as extended coverage, which includes perils other than fire, such as windstorm, hail, explosion, riot, etc. along with resultant damage caused by smoke and water. Allied lines proved further coverage against perils such as sprinkler leakage, rain and non-fire-related water damage and earthquake.

Personal Property

• Property that is not attached to real property. Property other than real estate, or property that is movable or separable from real estate; for property insurance purposes, tangible property, which is often called "contents." Personal property may be used for business purposes and therefore may be covered by a commercial policy, while personal property not used for business is generally covered only by personal lines policies (such as homeowners or renters' insurance).

Life & Annuity

Accelerated Benefits

• Prepayment of a specified percentage of life insurance death benefits prior to death to cover the cost of treatment for life threatening disease or confinement to a nursing home. Generally used in case of a terminal illness. Also know as living benefits.

Accidental Death & Dismemberment

• A form of accident insurance, which indemnifies or pays a stated benefit to insured or his/her beneficiary in the vent of bodily injury or death due to accidental means (other than natural causes).

Fixed

• Guarantees a specific payment amount in the future.

Group Annuities

• Annuities purchased by a group member, enrollee, certificate-holder through a master contract issued to the association / group to which the individual belongs. These annuities pay a benefit at regular intervals for the life of the annuitant or for a specified period, usually beginning at retirement.

Group Life

• Life insurance coverage obtained by group member, enrollee, certificate-holder through a master contract issued to the association / group to which the individual belongs, usually paying face value benefits upon the death of the covered individual.

Individual Annuities

• A policy that pays a benefit at regular intervals for the life of the annuitant or for a specified period usually beginning at retirement.

Individual Life

• Insurance covering the life of an individual with the face value usually payable at the death of the insured person.

Single Premium

• A single premium contract is paid at the inception of the policy and the policy becomes fully paid.

Term Life

• Life insurance in effect for a specified limited period if an insured dies within that period the beneficiary receives payment. If the insured survives the specified limited period, the beneficiary receives nothing.

Universal Life

• Adjustable life insurance, under which premiums flex, protection adjusts, and the insurance company discloses expenses and other charges to the purchaser.

Variable Life

• Contracts such as variable annuities or variable life insurance contain an element of risk for the policyholder depending on the performance of the seperate account backing the contract.  Generally, these contracts are products of the insurers but regulated by both state insurance departments and the federal government.

Whole Life

• A policy remaining in full force and effect for the life of the insured with premium payments being made for the specified period. Also known as Ordinary Life.

Liability

General

• Coverage that pertains, for the most part, to claims arising out of the insured's liability for injuries or damage caused by ownership of property, manufacturing operations, contracting operations, sale or distribution of products, the operation of machinery, and professional services. Covers all types of liability insurance other than employers, automobile, or product liability.

Professional Errors & Omissions

• Coverage pertaining to claims arising from the insured's liability for injuries or damage caused by acts of errors and missions of the insured while performing duties of his/her profession.

Umbrella

• Excess liability coverage above the limits of basic liability insurance policy such as the owners, landlords, and tenants liability policy. The umbrella policy fills gaps in coverage under basic liability policies.

Medical Malpractice

Claims-made

• Coverage is limited to claims or incidents which take place on or after the retroactive date designated in the policy and are first reported by the insured during the policy period. An alleged incident before the retroactive date is not covered regardless when the claim is made. It may also be necessary to secure "tail coverage" for protection against claims submitted after your coverage has expired.

Occurrence

• Protects the insured for claims stemming from alleged incidents that take place during the policy period, even if the policy has expired or been canceled. Occurrence coverage is the most comprehensive kind of malpractice insurance.

Miscellaneous

Actual Cash Value

• The replacement cost of property minus depreciation. (Actual Cash Value can also be determined by market value, if any.)

Adjuster

• A person responsible for investigating, evaluating, and settling insurance claims.

Bail Bonds

• Monetary guarantee that an individual released from jail will be present in court at the appointed time. If the individual is not present in court at the appointed time, the monetary value of the bond is forfeited to the court.

Binder

• A temporary contract of insurance that is written or oral.

Declarations Page

• An information page in an insurance policy that provides specific details about the insured and the subject of insurance.

Deductible

• A portion of a covered loss that is not paid by the insurer. The deductible is subtracted from the amount the insurer would otherwise be obligated to pay the insured.

Depreciation

• Physical wear and tear or technological or economic obsolescence.

Endorsement

• A document that amends an insurance policy by adding or deleting coverage or otherwise modifying the coverage.

Exclusions

• Policy provisions that eliminate coverage for specified exposures.

Fidelity

• Insurance guaranteeing the "honesty" of persons holding positions of public or private trusts. The insurer accepts the responsibility of the employee to the employer for faithful performance of the duties of employment.

File-and-Use Laws

• State rating laws in which insurance rates must be filed with the state insurance department but do not have to be approved before use.

Guaranty Fund

• A state fund that provides a system to pay the claims of insolvent insurers; the money in the guaranty fund comes from assessments collected from all insurers licensed in the state.

Indemnity

• To restore a party who has had a covered loss to the same financial position that party held before the loss occurred.

Inland Marine

• A broad form of insurance, generally covering articles in transit as well as bridges, tunnels, and other means of transportation and communication. Besides goods in transit (generally excepting Trans-ocean), it includes numerous "floater" policies, such as those covering personal effects, personal property, jewelry, furs, fine arts, and other items of value.

Insured

• A person, a business, or an organization whose property, life, or legal liability is covered by an insurance policy.

Insurer

• An insurance company.

Market Conduct Regulation

• State laws that regulate the practices of insurers in regard to four areas of operation: sales and advertising, underwriting, ratemaking, and claim settlement.

Named Perils

• The perils listed and described in a policy. In a named perils policy, only losses caused by those listed perils are covered.

Negligence

• Failure to act in a manner that is reasonably prudent; failure to exercise the appropriate degree of care under given circumstances.

Ocean Marine

• Insurance for sea-going vessels and their cargoes, including liabilities connected with them. This covers ships or hulls, goods or cargoes, earnings (i.e. passage money, commissions, profit) and liability incurred by the owner or by any party interested in or responsible for insurable property for reasons of maritime perils while in transport.

Premium

• A periodic payment by an insured to an insurance company in exchange for insurance coverage.

Replacement Cost

• The cost to repair or replace property using new materials of like kind and quality with no deduction for depreciation.

Salvage Rights

• The rights of the insurer to recover and sell or otherwise dispose of insured property on which the insurer has paid a total loss.

Self-Insurance Plan

• An arrangement in which an organization pays for some or all of its losses with its own resources rather than purchasing insurance.

Subrogation

• The insurer's right to recover payment for a loss it has paid to an insured from a negligent third party who caused the loss.

Surety

• Insurance guaranteeing the performance of contracts, other than insurance policies, or guaranteeing and executing all bonds, undertakings, and contracts of surety ship. One party becomes responsible to a third party for the act or negligence of the second party.

Surplus Lines

• Coverage obtained in an unlicensed insurance company because of its unavailability in the licensed market.

Third-Party Administrator

• Business firms that contract to provide administrative services, such as claim handling, to other businesses.

Title

• Insurance against the loss of the title or against expense due to a defective title, damage suffered by reasons of liens, encumbrances upon, defects in, or the unmarketability of a title to such real property. Coverage may extend to heirs in case of death or to the insurers of a corporation owner of property.

Underwriter

• An insurance company employee who evaluates applicants for insurance, selects those that are acceptable to the insurer, prices coverage, and determines policy terms and conditions.

Warranty & Service Contracts

• A policy providing repair or replacement service or indemnification for such service for the operational failure of covered property. Examples: homeowner warranty, electronic devices warranty, etc.

Watercraft

• Coverage for damages resulting from the operation of motor boats too large to qualify for insurance under ordinary homeowners and small business policies. Coverage exists whether the boats are leased or owned by another party who operates them in the benefit of the business exposing them to liability. This covers the actual boat, engine, propellers, and permanently attached equipment in and out of water while boating, launching, towing and storing.

Workers Compensation

• Insurance against the legal liability of any employer for the death of, disablement of, or injury to an employee.