Glossary Of Insurance Terms And Definitions

  • Actuary: A statistician who computes insurance risks and premiums.
  • Amendment: A change to the basic policy contract, it alters the policy
  • Anti-Theft Device: A device that deters motor vehicle theft. Autos equipped with these devices may entitle you to a discount on your insurance premiums.
  • Assured: Means the same as an insured, policyholder, or someone who has an insurance policy.
  • Bodily Injury: An injury sustained by a person.
  • Cancellation: Termination of an insurance contract before the end of the policy period, by the insured or insurer.
  • Carrier: The insurance company or insurer.
  • Claim: Any request or demand for payment under the terms of the insurance policy.
  • Claimant: Individual or entity presenting a claim.
  • Condition: The portion of the insurance contract which outlines the duties and responsibilities of both the insured and the insurance company.
  • Coverage: protection and benefits provided in an insurance contract.
  • Cover note: A temporary agreement declaring that the policy is in effect. Used in certain cases to protect a policyholder when it is not possible to issue or endorse the policy immediately.
  • Damage: Loss or harm to a person or property.
  • Damages: Money that one party becomes legally obligated to pay to another party.
  • Depreciation: The decrease in value of any property due to wear, tear, and/or time. Generally, depreciation is not an insurable loss.
  • Discount: A reduction in your premium if you or your car meet certain conditions that are likely to reduce the insurer's losses or expenses.
  • Endorsement: An addition to the basic policy contract. An endorsement adds to the policy contract; an amendment alters it.
  • Estimate: An assessment of the cost to repair your damaged property.
  • Exclusion: Restriction in your insurance policy that limits and may exclude coverage for certain perils, persons, property, or locations.
  • Excess: portion you pay out of pocket, if you file a claim
  • Expiration Date: This date, found on your declarations page, indicates when your policy coverage runs out. Your renewal policy will start on this date.
  • Hazard: Anything that increases the chance of an accident occurring.
  • Indemnification: The act of providing compensation for a loss with the intent to restore an individual or entity to the approximate financial position prior to the loss.
  • Indemnity: Compensation for a loss intended to restore an individual or entity to the approximate financial position prior to the loss.
  • Independent Adjuster: An individual who estimates losses on behalf of an insurance company, but is not an employee of that company.
  • Inspection: Verification of a vehicle's physical condition.
  • Insurable Interest: Exists when an individual would suffer an economic loss as the result of damage to property or bodily injury
  • Insured: A person or organization covered by an insurance policy.
  • Insurer: An organization that provides insurance.
  • Legal Liability: Liability imposed by law, as opposed to liability arising from an agreement or contract.
  • Liability: Any legally enforceable obligation or responsibility for the injury or damage suffered by another person.
  • Lien: A claim, charge, or encumbrance on property as a security for the payment of a debt.
  • Limits of Liability: The amount specified in your policy up to which the insurance company will protect you.
  • Loss: Any measurable shilling cost of damage and/or injury suffered by a person.
  • Loss of Use: Compensation to a third-party claimant for financial consequences resulting from the inability to use property as the result of accident-related damage.
  • Policy: contract between you and your insurance company.
  • Premium: price of your insurance policy.
  • Malicious Mischief: Intentional damage of personal property with malice of forethought.
  • Material Damage: All property-related damage losses covered by the policy.
  • Misrepresentation: To make written or verbal statements that are untrue or misleading
  • Negligence: The failure to exercise the care that is expected of a reasonable person in similar circumstances.
  • Physical Damage: Damage to property.
  • Policy: A contract between you and the insurance company.
  • Policy Change: Any change made to your insurance policy during the period that the policy is in force.
  • Policyholder: The person or entity listed on the policy declarations page.
  • Premium: The price of the insurance policy that the insured pays in exchange for insurance coverage.
  • Quote: A statement of the premium that will be charged for insurance coverages based on specific information provided by the person requesting the quote.
  • Rate: Often used as a synonym for premium but actually refers to the base rating units that are used to determine the final premium.
  • Risk: The chance of suffering a loss.
  • Salvage: Damaged property which is taken over by the insurance company after payment of a claim.
  • Third Party: Person or entity not party to an agreement but with an interest in the agreement.
  • Third Party Claim: Claims for injury or damage to property of a third party alleged to have been caused by the insured.
  • Underwriting: The process an insurer goes through to determine whether or not it will provide coverage for an applicant.
  • Warranty: A written guarantee of the integrity of a product and of the manufacturer's responsibility for the repair or replacement of defective parts.