Insurance Terms

Actuary

An insurance professional who analyzes, evaluates, and manages statistical information. Evaluates insurance firms' reserves, determines rates and rating methods, and determines other business and financial risks.

Binder

Temporary authorization of coverage issued prior to the actual insurance policy.

Cancellation

Termination of an insurance contract before the end of the policy period, by the insured or insurer, usually in accordance with provisions in the contract.

Deductible

The amount of loss paid by the policyholder. Either a specified dollar amount, a percentage of the claim amount, or a specified amount of time that must elapse before benefits are paid. The bigger the deductible, the lower the premium charged for the same coverage.

Earned Premium

The portion of premium that applies to the expired part of the policy period. Insurance premiums are payable in advance but the insurance company does not fully earn them until the policy period expires.

Field Adjuster

An insurance adjuster who works primarily outside of an office and often meets personally with the public. Field adjusters can conduct face-to-face meetings, negotiations with claimants, scene investigations, and damage inspections.

G

No terms.

Hazard

Anything that increases the chance of an accident occurring.

Incurred Losses

Losses occurring within a fixed period, whether or not adjusted or paid during the same period.

J

No terms.

K

No terms.

Leased car

An auto rented under a long-term contract (lease). The leasing company retains ownership of the auto and must be shown on your insurance policy.

Malpractice Insurance

Professional liability coverage for physicians, lawyers, and other specialists against suits alleging negligence or errors and omissions that have harmed clients.

Named Insured

The person designated in the policy as the insured, as opposed to someone who may have an interest in a policy but is not specifically named. Usually includes a spouse, if a resident of the same household.

O

No terms.

Peril

A specific risk or cause of loss covered by an insurance policy, such as a fire, windstorm, flood, or theft. A named-peril policy covers the policyholder only for the risks named in the policy in contrast to an all-risk policy, which covers all causes of loss except those specifically excluded.

Quote

A statement of the premium that will be charged for insurance coverages based on specific information provide by the person requesting the quote including drivers, vehicles, and driving record.

Rate

The cost of a unit of insurance, usually per $1,000. Rates are based on historical loss experience for similar risks and may be regulated by state insurance offices.

Schedule

A list of individual items or groups of items that are covered under one policy or a listing of specific benefits, charges, credits, assets or other defined items.

Theft

The unlawful taking of the property of another with the intent to permanently deprive the owner of its use or possession.

Umbrella Policy

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.

Vandalism

Willful or malicious destruction or defacement of public or private property.

Warranty

A written guarantee of the integrity of a product and of the manufacturer's responsibility for the repair or replacement of defective parts.

X Y Z

No terms.