Insurance Glossary
A
Accident: An unexpected event resulting in loss or damage.
Actual Cash Value (ACV): The value of property, taking depreciation into account.
Adjuster: A person who investigates and settles insurance claims.
Agent: A person authorized to sell and service insurance policies.
B
Beneficiary: The person designated to receive benefits from an insurance policy.
Binder: A temporary insurance contract that provides coverage until a permanent policy is issued.
Broker: An insurance intermediary who represents the insured, not the insurer.
C
Claim: A request made by the insured for payment of benefits provided by the policy.
Coverage: The protection provided by an insurance policy.
Co-Payment (Co-Pay): A fixed amount paid by the insured for covered services, typically at the time of service.
D
Deductible: The amount the insured must pay out-of-pocket before the insurer pays a claim.
Depreciation: The decrease in the value of property over time.
Discount: A reduction in premium for certain conditions or behaviors, such as a good driving record.
E
Endorsement: A written amendment to an insurance policy.
Exclusion: Specific conditions or circumstances for which the policy does not provide coverage.
Expiration Date: The date on which an insurance policy ends.
F
Face Value: The amount stated on the face of a life insurance policy that will be paid upon death or policy maturity.
Flood Insurance: Insurance coverage for damage caused by floods, typically not covered under standard homeowners policies.
Fraud: Intentional deception to secure unfair or unlawful gain.
G
Grace Period: The period after the premium due date during which a policy remains in force without penalty, even if the premium has not been paid.
Group Insurance: Insurance coverage provided to a group of individuals under a single policy.
H
Hazard: A condition that increases the likelihood or severity of a loss.
Homeowners Insurance: A policy providing coverage for damage to a home and its contents, as well as liability coverage.
I
Indemnity: Compensation for a loss, putting the insured in the same financial position they were in before the loss occurred.
Insured: The person or entity covered by an insurance policy.
Insurer: The company providing insurance coverage.
L
Liability: Legal responsibility for injury or damage to another person or property.
Life Insurance: Insurance that pays out a sum of money on the death of the insured or after a set period.
Loss: The basis for a claim under an insurance policy.
M
Market Value: The amount for which property can be sold on the open market.
Maturity Date: The date on which the face amount of a life insurance policy becomes payable.
N
No-Fault Insurance: A type of auto insurance where each party's own insurance pays for their losses, regardless of fault.
Named Insured: The individual(s) whose name(s) appear on the policy's declarations page.
P
Peril: A specific risk or cause of loss covered by an insurance policy.
Policyholder: The person who owns the insurance policy.
Premium: The amount paid for insurance coverage.
R
Reinsurance: Insurance purchased by an insurance company from another insurance company to spread risk.
Rider: An add-on provision to a basic insurance policy.
S
Settlement: The amount paid by the insurance company to the insured or claimant to resolve a claim.
Subrogation: The process by which an insurance company seeks reimbursement from the responsible party for a claim it has already paid.
T
Term Insurance: Life insurance coverage for a specified period, typically without cash value.
Third-Party Insurance: Insurance that covers claims from third parties (people other than the insured or the insurer).
U
Underwriting: The process of evaluating the risk and exposures of potential clients.
Uninsured Motorist Coverage: Coverage that protects you if you're involved in an accident with a driver who does not have insurance.
W
Waiver: The voluntary relinquishment of a known right.
Workers' Compensation Insurance: Coverage for employees' work-related injuries and illnesses.