Actual Cash Value (ACV)
"Actual Cash Value" is the replacement cost of
property damaged or destroyed at the time of
loss, with deduction for depreciation. Actual
cash value cannot exceed the applicable limit of
liability shown in the declarations of the
policy, nor the amount it would cost to repair
or replace such property with material of like
kind and quality within a reasonable amount of
time after a loss. |
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Adjuster
The person who handles the settlement of claims
on behalf of an insurance company, either as an
employee of the company or an independent
engaged by contract. Also called a claims
representative. |
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Agent
The representative of an insurance company
responsible for selling and servicing policies.
Can be an employee representing only one company
(sometimes called a "captive agent" or a "direct
writer" or an "independent agent" who, through
contractual agreements, may represent several
different companies without being an employee of
any of them. |
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Auto Medical Payments
Optional automobile coverage that pays for
medical expenses incurred by the insured driver
or his or her passengers, without regard to who
is responsible for the accident |
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Automobile Insurance
Contractual protection against losses resulting
from the ownership and use of an automobile.
Coverage's common in auto policies include FIRE,
THEFT, COMPREHENSIVE, COLLISION, PROPERTY DAMAGE
and BODILY INJURY LIABILITY and UNINSURED
MOTORIST. |
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Benefit
The money to be paid by an insurance company
under the terms of the insurance policy.
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Beneficiary
The person(s) named in the policy to receive the
life insurance proceeds upon the death of the
insured. |
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Binder
A legal agreement between an insurance buyer and
an insurance company or its agent. it provides
temporary insurance coverage until a policy is
either issued or refused. |
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Blanket Policy
A policy that covers a group of people ( such
employees of the same company) or several
properties of exposures (kinds of possible
losses) under a single contract. |
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Bodily Injury
Injury to the body of a person as specifically
defined in an insurance policy. Bodily injury
liability is the legal responsibility for
medical and related cost that may result from
injury to the life or health of another person.
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Cancellation
The termination of an insurance policy either by
the insured party or the insurance company,
before its normal expiration date. A cancelable
policy includes a provisions the the contract
can be terminated by either party upon notice to
the other. By contrast, a non-cancelable policy
cannot be canceled by the insurance company
during its specified term. (unless non-payment
of premium) |
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Cash or Surrender Value
The amount that is available in cash for loans
and that may be available for withdrawals.
Accessing Cash Surrender Value may reduce the
death benefit and may increase the risk of
lapse. |
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Claim
A demand for payment by a policyholder to an
insurance company, or by an injured party to the
policyholder, for recovery of a loss.
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Collision Coverage
Insurance against a loss resulting from damage
to the covered auto through collision with
another object or upset of the auto.
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Comprehensive Coverage
Covers damage to the auto not resulting from
collision. For example: an auto is parked near a
building being painted and becomes splattered
with paint. Most claims paid under this coverage
are for fire, theft and windshield breakage.
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Conditions
The part of an insurance policy that spells out
the responsibilities of the policyholder and the
insurance company. |
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Coverage
The guarantee to pay if specific losses occur,
according to the terms of the insurance policy.
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Debris Removal
This clause extends insurance coverage to
include the cost of debris removal resulting
from damage caused by a covered loss up to a
specified limit of loss. The clause is an
additional property insurance coverage
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Declaration
Normally the first page of a policy (Also
referred to as the Dec Page), it includes the
insured's name, how long the coverage applies,
and how much insurance is being provided.
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Exclusions
Provisions of an insurance policy that state
what the company will NOT pay for. |
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Face Amount
The amount stated on the face of the policy that
will be paid in case of death. It does not
include additional amounts payable under
accidental death or other special provisions, or
acquired through the application of policy
dividends. |
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Fraud
Deception or action intended to cheat. In
insurance, ordinarily involves intentional
misrepresentation or concealment. |
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Insurance
A contractual agreement that calls for one
party, in exchange for a consideration, to
reimburse anther party for certain specified
losses. The insurance contract is call a policy.
The consideration is called a premium.
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Insurability
Acceptability to the company of an applicant for
insurance. |
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Insured or Insured Life
The person on whose life the policy is issued.
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Lapse
Expiration or cancellation of an insurance
policy by nonpayment of premium. |
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Level Premium Life Insurance
Life insurance for which the premium remains the
same from year to year. The premium is normally
more than the actual cost of protection during
the earlier years of the policy and less than
the actual cost in the later years. The building
of a reserve is a natural result of level
premiums. The payments in the early years,
together with the interest that is to be earned,
serves to balance out the underpayment of the
later years. |
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Liability
A condition of being bound by law to do
something, enforceable in the courts. For
insurance purposes it most often involve the
payment of damages. |
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Libel
Publication of defamatory information. This can
be covered by liability insurance. |
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Lien
A hold or claim one party has on the property of
another, usually as security for the debt or
other obligation. For example:, a home mortgage
or car loan. |
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Limits
The largest total amount the insurance
company will pay for covered losses. Many
policies have multiple limits - a certain amount
per person, another amount per accident and
sometimes, an aggregate limit on all losses paid
during the policy term.
i.e. 100/300/100. In this example, the first 100
represents $100,000 bodily injury coverage PER
PERSON. The 300 represents $300,00 per accident
for bodily injury. The last 100 represents
$100,000 limit for property damage. |
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Policy Loan
A loan made by a life insurance company from its
general funds to a policyowner on the security
of the cash value of a policy. |
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Loss of Use
In the event you could not live in your home
after an insured peril occurs, the homeowners
policy offers payment of temporary living
quarters while you are waiting for repair work
to be completed. You would also have additional
expenses such as food and laundry paid for as
well. |
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Ordinance or Law Coverage
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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.
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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.
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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.
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Paid-up Insurance
Insurance that will remain in force with no need
to pay additional premiums. |
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Permanent Life Insurance
Any form of life insurance except term;
generally insurance that builds up a cash value,
such as whole life. |
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Physical Damage
Normally refers to the comprehensive and
collision coverage's of an auto policy.
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Policyowner
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. |
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Premiums
Payments to the insurance company to buy a
policy and to keep it in force. |
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Replacement Cost Coverage
Unlike other types of insurance, replacement
cost insurance does not depreciate your property
of contents values. Every covered item that
needs to be replaced will be treated as if it
were brand new at the time of repair or
replacement. |
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Renewable Term Insurance
Term insurance which can be renewed at the end
of the term, at the option of the policyowner
and without evidence of insurability, for a
limited number of successive terms. The rates
generally increase at each renewal as the age of
the insured increases |
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Term Life Insurance
Life insurance that does not build up cash value
and where the premium normally increases as the
insured gets older. |
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Towing and Labor Costs Coverage
This endorsement is used to extend your
Automobile policy to reimburse you, up to a
predetermined limit per disablement, for towing
charges or other specified costs when your auto
is disabled by a covered period. |
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Uninsured/underinsured Motorist Coverage
Optional coverage that pays the policyholder in
the event an accident is caused by a driver who
has no liability insurance or whose insurance is
not adequate to cover the full amount of damages
for Bodily Injury Losses. |
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Universal Life Insurance
A flexible premium life insurance policy under
which the policyowner may change the death
benefit from time to time (with satisfactory
evidence of insurability for increases) and vary
the amount or timing of premium payments.
Premiums (less expense charges) are credited to
a policy account from which mortality charges
are deducted and to which interest is credited
at rates which may change from time to time.
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Whole Life Insurance
A basic type of permanent life insurance which
can provide lifetime protection at a level
premium. Premiums must generally be paid for as
long as the policy is in force. |
