Life Insurance Glossary

Beneficiary
The person(s) named by the owner of the policy to receive the life insurance proceeds upon the death of the insured.

Cash Value/Cash Surrender Value
The amount that is available in cash for loans and/or withdrawals. Accessing cash surrender value may reduce the death benefit and may increase the risk of lapse. Withdrawals may be subject to surrender charges and could have a permanent effect on the cash value. Loans reduce the cash value and death benefit by the amount of the loan outstanding plus interest.  If the policy is surrendered, the cash surrender value is paid to the policy owner.

Convertible Term Insurance
Term insurance that can be exchanged (converted), at the option of the policyowner and without evidence of insurability, for a permanent insurance policy.

Dividend
A return of part of the premium on participating insurance that is based on the insurer's investment, mortality and expense experience. Dividends are not guaranteed.

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.

Insurability
Acceptability to the company of an applicant for insurance.

Insured or Insured Life
The person on whose life the policy is issued.

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  cash value is a natural result of level premiums over a long period.  Term policies generally have level premiums for the initial term, though they generally have no cash value. 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.

Loan (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. Generally, loans reduce the policy's death benefit and cash value by the amount of the outstanding loan plus interest.

Paid-up Insurance
Insurance that will remain in force with no need to pay additional premiums.

Participating Policy
A life insurance policy that is eligible for the payment of dividends by the insurer (see also Dividend).

Permanent Life Insurance
Any form of life insurance except term; generally insurance that builds up a cash value, such as whole life. Coverage can last a lifetime.

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 trust, partnership or a corporation.

Premiums
Payments to the insurance company to buy a policy and to keep it in force.

Renewable Term Insurance
Term insurance that 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.

Term Life Insurance
Life insurance that does not build up cash value and where the premium normally increases as the insured gets older.

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.

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.

Home Insurance Glossary

Actual cash value: the worth of a damaged or stolen item at the time of the loss.

Additional living expense coverage: pays for some additional living costs (i.e. motel, restaurant) if you must live elsewhere while repairs are being made to your damaged home.

Adjuster: a person trained professionally to assess damage and settle your claim. The adjuster may be a company employee or under contract to the company.

All risk: losses are covered for any reason except for those specifically excluded in the policy

Appraisal: an evaluation of your property claim

Binder: a temporary or preliminary coverage until a policy can be written or delivered.

Cancellation: you or the insurance company stop coverage before your policy's normal expiration date.

Claim: a request for reimbursement for a loss covered under the policy.

Conditions: the part of the insurance policy that explains the obligations of the insured and the insurance company under the property, for property and liability. It explains your duties in the event of a loss and how the company will settle.

Declarations page: commonly the first page of your policy containing the name of the insured, the address, the dollar amount of coverage provided, a description of the property, and the cost.

Deductible: the amount of the loss you paid out-of-pocket per claim or accident.

Depreciation: the decrease in your home's value since the time it was built because of age or wear and tear.

Endorsement: an attachment to your insurance policy that adds to, removes or changes the original terms. You can negotiate various types of endorsements to tailor a policy to your special needs.

Exclusions: certain causes and conditions that your insurance policy does not cover.

Floater: additional coverage added to your policy to cover items such as antiques, jewelry, furs, guns, and so forth.

Guaranteed replacement cost coverage: pays for the full cost to replace or rebuild your home, even if it costs more than your policy limits.

Inflation guard coverage: an automatic annual raise in your coverage limits based on the insurance company's estimate of rising building material and labor prices.

Liability coverage: insurance that covers for injuries to another or damage to another person's property for which you are liable.

Limit: the maximum amount of benefits your insurance policy pays in the event of a loss

Loss: the dollar value of property damage or physical injuries.

Midterm cancellation: a cancellation that occurs during the policy term and prior to the expiration or renewal date of the policy.

Named perils: individually itemized, covered, perils stated in your policy.

Non-renewal: the refusal by a company to renew your policy when it expires.

Offer: the amount your insurance adjuster proposes to pay you for your loss

Peril: an event that causes a loss to your home and property such as fire, windstorm, and theft. Policies have two sets of perils: covered and excluded.

Personal property floater: an endorsement that provides additional coverage for furs, jewelry, stamps, coins, antiques, computer, guns, and other items that exceed the normal low limits in your home policy.

Premium: the amount of money paid for your insurance policy.

Replacement cost coverage: how much it will cost you to replace a stolen or damaged item with a comparable, new item at today's prices.

Replacement cost guarantee: pays the full cost to repair or replace your dwelling or personal property, even if it exceeds the original cost.

Risk: has two meanings: (a) the chance of loss such as from a peril; and (b) the person that is insured by a policy.

Settlement: the dollar amount you agree to accept from the insurance company as payment for your loss.

Subrogation: a third party (e.g., the insurance company) assumes another's legal right to collect a debt or damages.

Umbrella liability: insurance protection against losses in excess of the amount covered by other liability policies.

Underwriting: the process by which an insurance company selects and classifies risks according to their degree of insurability.

Health Insurance Glossary

A
Additional Insured: Refers to anyone covered under your health plan that is not named as “insured” in your documentation.
Assisted Living Facility: Residential communities for senior citizens that provide nursing care.

B
Benefit: The dollar amount your insurance carrier will pay when you claim a covered loss.
Benefit Period: The interval during which you will be eligible for benefits. Generally, your benefit period will begin with the first medical service you received for a specific illness and end after you have not been treated for that condition for 60 days.

C
Carrier: Refers to the HMO or insurance carrier offering your health plan.
Certificate of Insurance: This is the printed description of your benefits and coverage limits that forms a contract between you and your carrier. It spells out precisely what will be covered, what won't, and the dollar maximums.
Claim: This refers to any request to your insurance company for benefits.
COBRA: This acronym refers to 1985's Consolidated Omnibus Budget Reconciliation Act. The law requires group medical plans covering twenty employees or more to offer participants the option to receive continued healthcare benefits for up to eighteen months, at a reduced cost, after the cancellation of their group plan.
Coinsurance: The amount you will be required to pay for your healthcare if you're a participating in either a preferred provider organization or fee-for-service plan after having met your deductible.
Co-payment: This is a cost sharing arrangement in which you will be responsible for a specific charge for a specific medical service ($20.00 per office visit / $10.00 per generic prescription, etc).
Covered Expenses: Refers to the various medical procedures that your insurer has agreed to provide you with coverage for.

D
Deductible: Refers to the amount you'll be required to pay for healthcare expenses before your insurance plan will begin to reimburse you.

E
Exclusion: A specific circumstance or condition for which your policy will not provide a benefit.
Effective Date: This refers to the date on which your insurance coverage will actually begin to cover you.

F
Fee-for-Service: This is a payment system for healthcare where your provider is paid for each service as it is rendered.

H
HMO: This is acronym stands for Health Maintenance Organization. HMO's are popular, prepaid, health benefit programs in which you'll pay monthly premiums in return for managed coverage for your checkups, hospital stays, doctors' visits, surgery, emergency care, preventive care, lab tests, and X-rays. If you join an HMO, you will have to select what's called a “primary-care physician” who will be responsible for coordinating your healthcare and making any referrals to specialists that you require. You'll also have to use doctors, hospitals and clinics who are members of your HMO plan's network.
Hospice Care: Regular health services given to a terminally ill patient.

I
In-network: Refers to healthcare facilities or providers who are members of your health plan.

L
Lifetime Limit: This refers to the cap (or maximum level) on benefits available through a policy.
LOS: This is simply an acronym for the term length of stay. It's used by insurance carriers, case managers, etc. to describe the length of time any individual spends in a hospital or an in-patient care facility.

M
Maximum Out-of-Pocket Expenses: The most you will have to pay during one year—in the form of deductibles and coinsurance fees.
Managed Care: This term refers to an increasingly broad assortment of health plans employing a system that manages healthcare costs and usage. There are three major types of managed health plans—HMOs or health maintenance organizations, PPOs or preferred provider organizations and POS or point-of-service plans.
Medicaid: This is a joint state / federal health insurance program that is administered by the state. It provides health coverage for low-income individuals, especially pregnant women, children and the disabled.
Medicare: This is a federally sponsored healthcare program that offers coverage for medical and hospital care primarily to those over the age of sixty-five.

N
Network: This refers to the groups of doctors, hospitals and other medical professionals who have been contracted to provide discounted healthcare services to your insurance carrier's customers.

O
Out-of-Network: This term typically refers to any doctors, hospitals or other healthcare providers considered to be non-participants by your insurance plan (HMO or PPO). Depending on your plan's guidelines, services provided by out-of-plan providers may not be covered, or only covered in part.

P
POS: This is an acronym for Point-of-Service Plan. The POS is a managed healthcare plan that combines the features of a Health Maintenance Organization and a Preferred Provider Organization. These plans allow you to decide whether or not you'll use an in-network provider or an out-of-network provider.
Preexisting Conditions: This refers to any healthcare issues you had prior to your insurance plan's effective date. Many policies will refuse to cover pre-existing conditions, while others do so only for a short time.
PPO: This is the acronym for Preferred Provider Organization. PPOs are networks of healthcare providers who have negotiated discount contracts with health insurance carriers. Your healthcare provider decisions will be up to you but there are generally financial incentives for you to select providers within your PPO network.
Preventative Care: Health services that focus solely on preventative care measures such as physical exams, immunizations, diagnostic tests and mammograms.
Premium: The dollar amount you'll pay on a monthly basis in exchange for your insurance coverage.
Primary Care Physician: Most HMOs and POS plans will require you to select one family physician, pediatrician or internist to monitor your health, treat most of your health problems, and refer you to specialists when necessary.
Provider: This term refers to any individual (nurse, physician, etc.) or institution (clinic, hospital, or laboratory) that provides you with care.

R
Rider: This refers to any policy attachment that makes additions or changes to your original insurance plan.

S
Short Term Health Insurance: This type of healthcare plan is purchased to provide you with benefits during coverage gaps between jobs, after a move or while you're traveling overseas.
Small Business Health Insurance: This is a type of healthcare coverage that is available to businesses employing between two and fifty employees. It offers discounted premiums to employees and tax advantages to small business owners; also in most cases, the coverage cannot be denied.

T
Travel Health Insurance: This insurance is purchased to provide you with coverage when you're traveling abroad.

W
Waiting Period: This refers to a pre-specified time period during which you will not be covered by your insurance (for a particular healthcare issue).

Long-Term Care Insurance Glossary

Please note: Definitions are intended to help define terms widely used throughout the long-term care and long-term care insurance industries as a whole and are not intended to be legally binding. Life insurance policies with long-term care benefits and long-term care insurance policy forms may have slightly different definitions. Consult the policy directly for the applicable definitions for that policy.

Accelerated Death Benefit (Living Benefits) Rider
A supplementary life insurance policy benefit rider that allows a policyholder to receive a specified portion of the policy's death benefit before the policyholder's death if certain conditions are met.

Activities of Daily Living (ADLs)
Everyday functions and activities individuals usually do without help. ADL functions include bathing, continence, dressing, eating, toileting and transferring. Many policies use the inability to do a certain number of ADLs (such as 2 of 6) to decide when to pay benefits.

Adult Day Care
Care during the day for adults, usually at senior or community centers.

Aging in Place
Occurs when an aged individual continues to live and receive care at home, instead of being institutionalized.

Alzheimer's Disease
A progressive, degenerative form of dementia that causes severe intellectual deterioration.

Assessment
A determination of an individual's physical and mental health by a health care professional based on established medical guidelines. For qualified long-term care insurance policies, the assessment must be made by a licensed health care practitioner.

Assisted Living Facility
A residential living arrangement that provides individualized personal care and health services for people who require assistance with activities of daily living.

Bed Hold Benefit
Will pay for the cost of reserving an insured's bed in a nursing home or assisted living facility while the individual temporarily leaves the facility up to a certain number of days.

Benefit Period
The maximum period that an individual can receive benefits for a qualified long-term care event.

Care Coordinator
A professional care manager, usually with a background in health care, provided by a long-term care insurance company. The Care Coordinator works with the insured and the insurance company to create a plan of care when a long-term care need arises.

Caregiver - Primary
The main person (usually a relative) who is managing and providing care for a person who is incapacitated.

Caregiver - Secondary
Others who help to provide care, usually on a part-time basis.

Chronically Ill Individual
A person who has been certified by a licensed health care practitioner within the preceding 12 month period as (1) being unable to perform without substantial assistance from another individual at least 2 out of 6 activities of daily living for a period of at least 90 days due to loss of functional capacity or (2) requiring substantial supervision to protect such individual from threats to health and safety due to cognitive impairment.

Continuing Care Retirement Community
A residential retirement community where a variety of living and medical services are provided to residents who are in need of continuous care and/or supervision.

Cognitive Impairment
A deficiency in a person's short or long-term memory, orientation as to person, place and time, deductive or abstract reasoning, or judgment as it relates to safety awareness.

Compound Inflation Protection
An option offered on some long-term care policies to increase the maximum daily and lifetime benefits each year by a pre-set percentage on a compound basis. It is available at an additional premium.

Custodial Care
Care to help individuals meet personal needs such as bathing, dressing and eating. Someone without professional training may provide care.

Durable Medical Equipment
Is equipment such as hospital beds, crutches, wheelchairs, ramps and prosthetics used for in-home care.

Elimination Period
A type of deductible; the length of time the individual must pay for covered services before the insurance company will begin making payments. The longer the elimination period in a policy, the lower the premium. The elimination period may also be called the waiting period.

Facility Qualifications
Specific standards required by state or federal regulations and by the long-term care insurance company (in states where no licensing or certification is required by the state) for a particular type of facility, such as a nursing home or adult day care center, to operate in a state and provide care or services that will be covered by a long-term care policy. Standards may include such things as licensing requirements, type of care services that must be provided, hours of operation, training and experience of caregivers. Facility qualification standards may vary by state and insurance policy.

Free Look Provision
A policy provision allowing the policy owner to inspect the policy for a specified period of time, often 10, 15, 20 days and to return the policy to the insurer, if desired, for a refund of the entire premium paid. Qualified long-term care policies are required by federal and state law to provide a free look period of 30 days. If the policy is returned within 30 days, the company must refund all of any premium(s) paid.

Guaranteed Renewable Policy
The company guarantees that the insured may renew the policy for life, as long as the insured pays the premiums. The insurance company may increase the premiums on guaranteed renewable policies for all policies of that particular type, but may not increase the premium for an individual policy. A qualified long-term care insurance contract must be guaranteed renewable.

Home Health Aide
A person who is providing home health care services at home under the supervision of a doctor, nurse, or physical, respiratory, speech or occupational therapist. An escort, companion or chore worker is usually not considered a home health aide.

Home Health Care
Services for occupational, physical, respiratory, speech therapy, or nursing care. Also included are medical, social worker, home health aide, and homemaker services.

Home and Community-Based Health Care
Includes nursing and related personal care provided to patients at home by a home health agency. Policies covering home and community-based care should describe the types of care and the types of agencies that are covered and should specify when and where this type of care can be provided. Home and Community-Based Health Care usually includes home health care, adult day care, and homemaker services.

Hospice Facility
A facility that provides care for individuals with terminal illnesses. While individuals receive care, they are typically not receiving the type of care that will bring about recovery or can be expected to improve their medical condition. Hospice care is intended to provide comfort for the terminal patient and support for their families.

Informal Care
Care that is received at home, or at a relative's home, by family or friends. A care coordinator or medical professional may supervise the care.

Intermediate Care
Occasional nursing and rehabilitative care provided by a medical professional based on a doctor's orders. Care may be provided only by, or under the supervision of skilled medical personnel. Frequently, a licensed practical nurse or nurse's aide gives this type of care to an individual who has limited functional ability but does not require around-the-clock care. Often, the person needs help with key functions like managing medication. Care is provided on an intermittent rather than a continuous basis -- for example physical therapy. Intermediate Care is excluded under Medicare.

Lifetime Maximum Benefit
The lifetime maximum benefit is the maximum amount that a long-term care insurance company will pay for all covered expenses throughout the life of a policy. The lifetime maximum benefit is often described as a pool of money that an insured can draw against. When the lifetime maximum benefit is exhausted, the pool is dry and the policy will not pay any more benefits.

Lifetime Home and Community-Based Care Maximum
The maximum amount that an insurance company will pay for covered expenses for home health care, adult day care and homemaker services.

Lifetime Therapeutic Devices Maximum
The maximum amount an insurance company will pay for covered lifetime therapeutic devices, sometimes called durable medical equipment.

Long-Term Care (LTC)
The type of care received when someone needs assistance with daily living due to an accident, illness, cognitive impairment or advancing age. Care is provided either in a facility or at home. Long-term care may include a range of formal and informal services for health, personal care and social needs. Often thought of only as nursing home institutionalization, long-term care can be provided both formally, by medical and health professionals, and informally, by personal, unskilled caregivers.

Long-Term Care Facility -- See "Nursing Care Facility"

Maximum Daily Benefit (MDB)
The pre-set amount that a long-term care insurance policy will pay up to for each day during a claim period. The maximum daily benefit is specified in the original long-term care insurance policy, but may increase on an annual basis if the policyholder also purchased a benefit increase rider.

Maximum Benefit Period
The amount of time that a long-term care insurance policyholder will be able to collect benefits for a qualified long-term care event. The time period is usually specified in years. If an insured had a policy that specified a three-year Maximum Benefit Period but was in care for four years, only the first three years of care would be covered by his/her long-term care insurance.

Medicaid
A joint federal/state program that pays for health care services for those with low incomes or very high medical bills relative to income and assets.

Medicare
The federal program providing hospital and medical insurance to people age 65 and older and to certain ill or disabled persons. Benefits for nursing home and home health services are limited.

Medicare Supplement Policy (Medigap Policy)
A private insurance policy that covers many of the gaps in Medicare.

Non-Forfeiture Benefit
A policy feature that provides either reduced paid-up insurance, extended term or a shortened benefit period upon lapse of the policy due to non-payment of all or part of the premium after the policy has been in force for a specified period of time.

Nursing Care Facility
A facility providing skilled, intermediate or custodial nursing care which must be state- licensed.

Personal Care -- See "Custodial Care"

Premium
The typically periodic payment that the consumer must make to their insurance company to put a policy in force and to keep a policy in-force.

Rate Class
A group of insureds with similar long-term care insurability levels. Extremely healthy people who are less likely to need long-term care are usually placed in healthy classes and receive a preferred rating (lower rates). For example, the price of a long-term care insurance policy typically increases as an individual's rate class decreases.

Respite Care
Care that is provided to long-term care patients, at home, by professionals or volunteers for a few hours or a few days while allowing typically informal caregivers some time away from providing care.

Restoration of Benefits
Occurs when an insurance provider adds benefit dollars back into a policyholder's lifetime maximum benefit after recovery from a long-term care need for which benefits were paid.

Riders
Addition to an insurance policy that changes the provisions of the policy.

Sandwich Generation
A term used to describe individuals who find themselves in the unfortunate situation of caring for their children as well as aging parents.

Simple Inflation Protection
This benefit provides for an insured's long-term care maximum daily benefits and lifetime maximum benefits to increase each year by a set amount. Increases are always based on the initial benefit. Rider is available at an additional premium.

Skilled Care
Commonly referred to as nursing care, this is the highest level of care an individual can receive without being confined to a hospital. It is almost always based in an institution. The insured requires continual medical attention from nurses or other licensed medical professionals who are supervised by a physician.

Care must be available on a 24-hour basis. Skilled rehabilitation services such as physical, occupational and speech therapy are generally included in this definition. The Medicare definition of skilled care requires daily care by a physician.
Skilled (nursing) care is the only type of care Medicare covers (but on a very limited basis).

See also "Custodial Care" and "Intermediate Care."

Stand-By Assistance
Refers to the need for someone to assist another individual performing activities that are basic to daily living. Unlike someone who needs continual supervision (i.e. all the time), a person who needs standby assistance has to have a caregiver within arm's reach of the individual at all times to prevent, by physical intervention as necessary, injury to the individual while the individual is performing the activity of daily living (ADL) (for example, being ready to catch the individual if the individual falls while getting into or out of the bathtub or shower as part of bathing).

Therapeutic Devices
Devices such as grab bars and ramps, which help an individual perform the basic activities of daily living without another person's assistance.

Underwriting
The process of examining, accepting or rejecting insurance risks and classifying those selected, in order to charge the proper premium for each.

Auto Insurance Glossary

Additional Insurance
Insurance that supplements an already existing policy. It is uncommon that the company or its duly authorized agent allows additional insurance.

Additional Insured
An individual or organization covered by an insurance policy other than the named insured in the policy declarations. In an automobile policy, anyone who drives the car with the owner's consent is an additional insured; although, in most cases, the additional insured must be named in the policy.

Applicant
A person who fills out and signs a written application for insurance.

Application
A written statement by a prospective policyholder that gives the information the company relies upon when evaluating the applicant and issuing the policy.

Appraisal
A survey by a Liberty Mutual Claims Representative or Claims Appraiser estimating the amount of damage to a vehicle and the cost to repair or the determination of a complete loss.

Auto Loan/Lease Coverage (Gap Coverage)
Provides coverage, in case of a total loss, for the 'gap' between the amount due under the terms of the vehicle's loan/lease and the actual cash value of the vehicle at the time of the loss. Please note that there are vehicle eligibility requirements and the coverage may not be available in your state. Please contact your Liberty Mutual Sales Representative for more information .

Basic Limits
The lowest coverage amount, as prescribed by law or the company, for which an insurance policy can be written. Basic Limits primarily prescribe limits of liability.

Bodily Injury
Injury to the body of a person. In insurance, people often refer to Bodily Injury as the coverage afforded for financial protection against injury of a person resulting from an accident.

Cancellation
Termination of an insurance contract before its expiration date, by either the insurance company or the policyholder.

Claim
A demand for payment under an insurance contract for the estimated or actual amount of loss.

Collision Insurance
Collision insurance laws may vary by state, but generally, this insurance covers a loss to the insured's vehicle caused by its impact with another vehicle or object.

Comprehensive Coverage
Comprehensive insurance laws may vary by state, but generally, this insurance protects against any loss or damage to an automobile except those caused by collision or by upset; for example, glass replacement, towing and labor coverage, or coverage against fire or theft.

Compulsory Auto Injury Laws
Laws which make it illegal to operate a vehicle without first having proof of the ability to pay for a judgement that may result from an accident.

Conditions
Provisions that set forth the rights, duties, and responsibilities of the parties to an insurance contract. Conditions may be found anywhere in the contract.

Covered Persons
Those insured under the policy.

Covered Autos
Any vehicle shown in the declarations, or in some cases, a substitute vehicle used temporarily because of breakdown or repair of the insured's own covered vehicle.

Damages
A sum of money that a party is legally obligated to pay to another as compensation for injury.

Declarations
The part of the policy that provides detailed information about the insured, the insurer, and the coverages.

Deductible
The amount of a claim that the policyholder has agreed to pay. This amount is deducted from a claims payment.

Depreciation
A decrease in an automobile's value over time.

Drive-In Claims Services
Automobile insurer's facility to which an insured may bring a damaged vehicle to facilitate the adjusting of claims and the settlement of damages.

Effective Date
The date the coverage begins on an insurance contract (policy).

Electronic Equipment Endorsement
Provides coverage for your covered autos' permanently installed electronic equipment or electronic equipment designed to be permanently installed but can be removed as an anti-theft measure. This endorsement also covers direct and accidental loss to any accessories used with such equipment. Radar detectors are specifically excluded. Please contact your Liberty Mutual Sales Representative for more information, as there are eligibility requirements and this coverage may vary in your state.

Endorsement
An amendment to your policy written especially to cover unique items just for you. An endorsement is also a change to your policy that is made during the policy's term. An endorsement is attached to your policy to modify the terms of the insurance contract.

Exclusion
Part of an insurance contract that excludes coverage of certain perils, persons, property, or locations.

Expiration Date
The termination date of an insurance contract (policy).

Financial Responsibility Clause
Financial Responsibility ensures that a policy conforms to the financial responsibility laws of any state or Canadian province in which the insured's vehicle operates.

Glass Insurance
Coverage for accidental or malicious breakage to glass.

Insurance Department
A state's department that has responsibility for the enforcement of the state's insurance code. It is charged with the supervision and licensing of insurance companies and agents and the general administration of insurance laws of the state.

Insured
A person who is protected by the policy.

Insurer
The company that issues a policy to a policyholder; the party in the insurance contract that promises to pay losses and render services.

Insuring Agreements
Part of an insurance policy that states the coverage of the contract.

Liability Insurance
Liability insurance pays on behalf of the insured for certain types of injury to others.

Limit of Liability
The maximum amount that an insurer agrees to pay in the case of loss under policy contract.

Loss
A value reduction in an insured's automobile caused by an insured peril, the amount sought in a claim, or the amount paid on behalf of an insured under an insurance contract.

Loss Payable Clause
A policy condition that enables an insured to direct the company to pay any loss that may be due to a third party.

Loss of Use Insurance
Compensation when the policyholder has lost the use of his or her vehicle; for example, an automobile rented to replace one that is stolen.

Medical Payments Insurance
In certain states, Medical Payments insurance is a coverage under which an insurer agrees to pay, up to a specified limit, medical, surgical, hospital, and funeral expenses, regardless of the liability of the insured.

Mutual Insurance Company
A company with no capital stock that is owned and controlled by policyholders.

Named Insured
The individual or organization with whom an insurance contract is made and who is specifically named as a Named Insured in the policy declarations. Additional individuals or organizations can also be added as named insureds.

No-Fault Insurance
In certain states, No-Fault insurance permits automobile accident victims to be directly reimbursed for medical and hospital expenses and loss of income by their own insurance company regardless of who is at fault.

Non-Renewal
A policy that the insurer does not continue after its expiration date.

Occurrence
An accident or loss, including continuous or repeated exposure to substantially the same general harmful conditions, that result in bodily injury or property damage.

Partial Loss
A loss that does not completely destroy the insured automobile that is covered by an insurance policy.

Payroll Deduction
The policyholder authorizes his or her employer to deduct amounts from the employee's earnings to cover the premium.

Peril
The cause of a possible accident, loss, or claim.

Personal Injury Protection (PIP), No-Fault Insurance
May also be referred to as No-Fault insurance. In certain states, this provides insurance that can cover for medical costs, loss of earnings, additional living expenses, and funeral costs for occupants of the insured automobile and pedestrians, other than those insured under other policies.

Policy
A formal written contract of insurance.

Policy Anniversary
Date on which an insurance policy must be reinstated to remain in force.

Policyholder
The party to whom a policy is issued who agrees to pay a premium to an insurer in consideration of the latter's promise to provide insurance protection.

Premium
The amount that a policyholder agrees to pay to the insurance company for an insurance policy.

Property Damage
Damage to tangible property. In insurance, people often refer to Property Damage as the coverage afforded for financial protection against damage to another?s property resulting from an accident.

Protection
Coverage afforded by an insurance contract.

Provisions
The statements in an insurance policy that explain the benefits, conditions, and other features of the insurance contract.

Rate
The cost of insurance per unit; used as a base for the determination of premiums.

Rating Bureau
A state supervised organization that classifies and computes rates, gathers data, and measures individual risk hazards. This information is made available to all insurance companies who are members of such a bureau.

Recovery
Money or other valuables that the insurance company obtains through subrogation, salvage, or reinsurance.

Reinstatement
Returning a lapsed policy to its full value after its termination as if it was never terminated.

Renewal
A policy issued to replace one that has expired.

Rental Reimbursement
Rental reimbursement coverage is optional. If you must rent a car because your own car was out of service due to a covered loss, rental coverage pays you back for money you spent on your rental car (up to a specific limit you select). Be sure to review your policy for any restrictions which may apply such as maximum dollar amount allowed per claim or specific time limitations, among other items.

Safe Driver Plan
A system for adjusting standard rates up or down according to good or bad driving records of the insureds.

Subrogation
When your insurance company pays for a loss caused by another driver, your company may have the right by law or policy provision to recover an amount of the loss from the other person or their insurer.

Towing/Labor
Towing is an optional coverage. It pays the cost of having your car towed and on-site road repairs (up to a specific limit you select) each time your car breaks down (whether or not there is an accident involved). You are covered for the on-site labor costs at the breakdown site (not any parts) needed to get your car running again. Be sure to review your policy for any restrictions which may apply such as maximum dollar amount allowed per claim or specific time limitations, among other items.

Underwriting
A process that evaluates an applicant and their automobile(s) against pre-established criteria for insurability to determine whether the applicant will be rejected or accepted for coverage and whether at standard or modified rates.

Uninsured or Underinsured Motorists Insurance
Uninsured or Underinsured Motorists insurance provides protection in the event that damage is caused by a motorist who has no insurance or not enough insurance to cover the loss.