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GLOSS18
Index

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
 
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A INDEX
Actual Cash Value Replacement Cost minus depreciation. The cost of a new item of similar make and model, less depreciation. (See Replacement Cost) 
Accelerated Death Benefits A life insurance policy option that provides policy proceeds to insured individuals over their lifetimes, in the event of a terminal illness. This is in lieu of a traditional policy that pays beneficiaries after the insured’s death. Such benefits kick in if the insured becomes terminally ill, needs extreme medical intervention, or must reside in a nursing home. The payments made while the insured is living are deducted from any death benefits paid to beneficiaries.
Accidental Death and Dismemberment (AD&D) Benefit A supplementary life insurance policy benefit that provides for an amount of money in addition to the policy’s basic death benefit. This additional amount is payable if the insured dies as the result of an accident or if the insured loses any two limbs or the sight in both eyes as the result of an accident.
Actuary An insurance professional skilled in the analysis, evaluation and management of statistical information. Evaluates insurance firms’ reserves, determines rates and rating methods, and determines other business and financial risks.
Additional Insured In auto insurance, a person (other than the Named Insured) or organization protected by the policy through endorsement. This is typically (on an auto policy) an auto leasing company or may be an employer such as a real estate agency. 
Adjustable Life Insurance A form of life insurance that allows policy owners to vary the type of coverage provided by their policies as their insurance needs change.
Admitted Company An insurance company licensed and authorized to do business in a particular state.
Aftermarket Parts See Crash Parts, Generic Auto Parts
Agent A licensed transactor of insurance who always represents the Insurance Company. Within the title of Agent is the authority to Bind coverage. (see Broker) 
Annuity A life insurance product that pays periodic income benefits for a specific period of time or over the course of the annuitant’s lifetime. There are two basic types of annuities: deferred and immediate. Deferred annuities allow assets to grow tax-deferred over time before being converted to payments to the annuitant. Immediate annuities allow payments to begin within about a year of purchase.
Antique Auto An automobile or truck, at least 25 years old which has been substantially restored to original condition, and which is used exclusively for parades, shows, and occasional drives.
Appraisal A written estimate of value of property to be insured completed by an individual trained to render such estimate. (See Arbitration) 
Arbitration Non-judicial resolution of dispute. Arbitration usually (in auto insurance) concerns matters of at fault parties in an accident, resulting liability for injury and levels of such injury. Arbitration is conducted by a single neutral arbitrator. If the parties cannot agree on an arbitrator, then each shall select and the two so selected shall appoint the single neutral arbitrator. In auto insurance if the dispute involves the value of the vehicle or the amount of damage the resolution may be accomplished by appraisal which is conducted by three vehicle appraisers. (See Appraisal)  
Auto Insurance Policy There are basically six different types of coverage's. Some may be required by law. Others are optional. They are:
 
  1. Bodily injury liability, for injuries the policyholder causes to someone else.
  2. Medical payments or Personal Injury Protection (PIP) for treatment of injuries to the driver and passengers of the policyholder’s car.
  3. Property damage liability, for damage the policyholder causes to someone else’s property.
  4. Collision, for damage to the policyholder’s car from a collision.
  5. Comprehensive, for damage to the policyholder’s car not involving a collision with another car (including damage from fire, explosions, earthquakes, floods, and riots), and theft.
  6. Uninsured motorists coverage, for costs resulting from an accident involving a hit-and-run driver or a driver who does not have insurance
   
B INDEX
Bailee An entity (person or organization) having legal possession of one's property without having title (right to sell) to such property. The best example of a Bailee is a dry cleaner. They have legal possession of garments without having the right to sell such garments. Bailees with regard to automobiles may be auto repair facilities, valet parking, car washes, etc. 
Beneficiary The person or legal entity the owner of an insurance policy names to receive the policy benefit if the event insured against occurs.
Bind The act of effecting coverage. 
Binder A temporary contract of insurance 
Binder Date The date and time that coverage is bound or put into effect. (See Bind)
Blanket Insurance Coverage for more than one type of property at one location or one type of property at more than one location. Example: chain store
Bodily Injury Physical injury to the person of a Third Party. This includes sickness, disease, pain and suffering, emotional distress, loss of income and even death. (See Third Party) 
Broker A licensed transactor of insurance who represents the client. (See Agent; Bind0) 
Broker Fee The fee for services rendered that is charged by a Broker. Such a fee is in addition to or separate from any Commission. (See Broker, Commission) 
   
  C INDEX
Cancel The act, of either party in an insurance contract, of ending the contract prior to its expiration. Both parties are required to give written notice to the other party to effect such cancellation. The insurer is required to give at least ten- (10) days notice prior written warning of such cancellation.
Cash Payment Option One of several nonforfeiture options included in life insurance policies and some annuity contracts that allows a policy owner to receive the cash surrender value of a life insurance policy or an annuity contract in a single payment. Also known as cash surrender option.  (See Cash Surrender Value; Nonforfeiture options)
Cash Surrender Value
  1. For life insurance, the amount, before adjustments for factors such as policy loans, that the owner of a permanent life insurance policy is entitled to receive if the policy does not remain in force until the insured’s death.
  2. For annuities, the amount of a deferred annuity’s accumulated value, less any surrender charges, that the contract holder is entitled to receive if the policy is surrendered during its accumulation period. Also known as cash value and surrender value.
Classic Auto An automobile which has been substantially restored to original condition, the make and model of which the public has shown an unusual degree of interest (i.e. 1957 Ford Thunderbird, 1964 Chevrolet Impala S/S, Early Mustang Convertibles, etc.) 
Collision (a) Impact of an automobile with another object or person outside the vehicle or the upset (overturning) of such vehicle; (b) That coverage which pays for damage to our insured's vehicle, in the event of the above. This coverage is usually subject to a deductible. (See Deductible) 
Collision Deductible Waiver (CDW) That coverage which, in the event our insured's car is damaged in an accident which is the fault of an identified Uninsured Motorist, waives (or eliminates) the deductible requirement under the collision coverage when repairing the auto. (See Collision; Deductible) 
Combined Single Limit (CSL) A limits structure for Bodily Injury and Property Damage Liability or Uninsured Motorist Bodily Injury coverage which provides one single limit, which is the maximum payable for all damages in any one occurrence. Most commercial auto insurance is written CSL. (See Split Limits) 
Commission Compensation to the producing agent, broker, or agency for writing and servicing the policy from the insurance carrier. Generally a percentage of the Premium. (See Premium) 
Comprehensive That coverage which pays for direct and accidental damage to the insured's automobile, other than that caused by Collision. All losses not specifically excluded are covered and such coverage usually has a deductible.
Conditions Also referred to as Terms and Conditions. These are typically circumstances that must be present for the coverage to apply.
Contract A promise or series of promises that are enforceable under the law. 
Crash Parts Sheet metal parts that are most often damaged in a car crash.
   
  D INDEX
Death Benefit 
  1. For a life insurance contract, the amount of money paid by an insurer to a beneficiary when a person insured under the life insurance policy dies.
  2. For an annuity contract, the amount of money paid to a beneficiary if the contract owner dies before the annuity payments begin.
Declarations Also known as the "Dec Page" or merely the " Dec." That section of the insurance policy that distinguishes one policy from all others. It contains the insured's name, address, a description of the property insured, the premium, etc. 
Deductible An amount of money which, in the event of a covered loss, the insured is required to pay prior to the insurer being liable for any damages. The purpose of a deductible is to eliminate the expense of processing small claims. 
Defense Coverage provided in most liability policies, which pays for the cost of defending the insured in the event of lawsuit regarding a covered loss. Defense cost, in the auto policy, is said to be " unlimited," in that the policy requires the insurer to pay whatever is necessary, however it is actually limited in that the insurer can pay policy limits in damages and thereby avoid the defense requirement entirely. 
Down Payment An amount of money (usually a percentage of the premium plus any fees) which the insured must be paid in order for the coverage to be bound. (See Bind)
   
E INDEX
Effective Date The date and time (usually at 12:01 a.m.) in which the policy contract begins. Actual coverage may begin earlier than this due to a Binder. (See Binder Date)
Excess Coverage that applies only after some other policy has paid its full policy Limit. This may result from policy structure, such as in the case of an Excess Liability or Umbrella policy, or as a result of two policies applying to the same loss. (See Primary) 
Excess Liability Coverage Liability coverage that is written to provide higher Limits than those available in the Primary policy. This policy is only liable after the Primary policy has paid its full Limits for a covered loss. It is used where higher Limits of liability are needed, but the primary carrier is unwilling or unable to provide such Limits. The Primary policy may provide Limits of 15/30/5 and the Excess policy 85/270/45 to provide total Limits of 100/300/50. 
Exclusion Language in a policy (or which may be endorsed onto a policy) which specifies that a given circumstance is not covered. An example would be intentional acts of the insured. If an insured were to damage property or cause bodily injury on purpose, the policy will not provide coverage due to the intentional acts exclusion. Another example would be the Named Driver Exclusion, which states that if a designated person specified by name is driving the automobile at the time of loss, the policy will not provide coverage. 
Extended Term Insurance One of several non-forfeiture options included in life insurance policies that allows the owner of a policy with a cash value to discontinue premium payments and to use the policy’s net cash value to purchase term insurance for the full coverage amount provided under the original policy for as long a term as the net cash value can provide. (See nonforfeiture options)
 
   
F INDEX
Fidelity Bond A form of protection that covers policyholders for losses that they incur as a result of fraudulent acts by specified individuals. It usually insures a business for losses caused by the dishonest acts of its employees.
Fiduciary Bond A type of surety bond, sometimes called a probate bond, which is required of certain fiduciaries, such as executors and trustees, that guarantees the performance of their responsibilities.
First Party The insured. A first party loss is a loss that involves injury and/or damage to the property of our insured. (See Third Party)
Floater Attached to a homeowners policy, a floater insures movable property, covering losses wherever they may occur. Among the items often insured with a floater are expensive jewelry, musical instruments and furs. It provides broader coverage than a regular homeowners policy for these items.
Flood Insurance Coverage for flood damage is available from the federal government under the National Flood Insurance Program but is sold by licensed insurance agents. Flood coverage is excluded under homeowners policies and many commercial property policies. However, flood damage is covered under the comprehensive portion of an auto insurance policy.
Fraternal Insurer A nonprofit organization that is operated solely for the benefit of its members and that provides its members with social and insurance benefits. Also known as fraternal benefit society.
   
  G INDEX
Gap Insurance An automobile insurance option, available in some states, that covers the difference between a car’s actual cash value when it is stolen or wrecked and the amount the consumer owes the leasing or finance company. Mainly used for leased cars.
Good Driver
  • Someone who has been continuously licensed for three or more years;
  • Someone who has been continuously licensed in the U.S. or Canada for eighteen months or more; and has less that two traffic violations or only one at-fault accident not involving bodily injuries in the last 36 months.
  • Has not been convicted of a DUI or manslaughter on or after January 1, 1996 - California law states that any driver convicted of a DUI or manslaughter on or after 1/1/1996 will not be eligible for consideration as a good driver for seven years from the conviction date. Good drivers may not be refused insurance by any auto carrier in the State of California and must be given a twenty percent (20%) discount over the carrier's best rates
Generic Auto Parts Auto crash parts produced by firms that are not associated with car manufacturers. Insurers consider these parts, when certified, at least as good as those that come from the original equipment manufacturer (OEM). They are often cheaper than the identical part produced by the OEM.
Gray Market A vehicle which was built for sale outside the U.S. These vehicles (usually built by Porsche, Mercedes, or BMW) do not meet U.S. standards regarding emission control, safety glass, lighting, etc. 
   
  H INDEX
Home Owner The person who pays the mortgage on the house.
   
  I INDEX
Insurance The contractual transfer of the financial consequences of loss.
Insured Anyone named on the declarations page or driving the insured vehicle with the permission of an insured. (See Permissive User) 
Insuring Agreement Promise made by the insurance company, which outlines its duties. Exclusions, Conditions and definitions that appear later in the policy modify this promise.
   
  L INDEX
Liability The legal responsibility for injury done by the insured to a Third Party, or damage done to their property. (See Third Party0)
Limits Maximum amounts payable under a given coverage. May be per person, per occurrence, per day or per year. (See Split Limits; Combined Single Limit) 
Long Term Care Insurance Long-term care (LTC) insurance pays for services to help individuals who are unable to perform certain activities of daily living without assistance, or require supervision due to a cognitive impairment such as Alzheimer’s disease. LTC is available as individual insurance or through an employer-sponsored or association plan.
Long Term Disability Income Insurance A type of disability income insurance that provides disability income benefits after short-term disability income benefits terminate and continues until the earlier of the date when the insured person returns to work, dies, or becomes eligible for pension benefits. Contrast with short-term disability income insurance.
Loss Payee Typically the finance company holding title to the owned auto.
   
  M INDEX
Medical Payments  An optional auto coverage which pays for the medical expenses of the Named Insured, members of his/her family, and passengers of his/her car if injured in a Collision accident. The Named Insured and Relatives are also covered if struck as a pedestrian. This coverage is Excess to any other medical insurance. (See Excess) 
   
  N INDEX
Named Insured That person so listed on the Declarations and his/her spouse if a resident of the same household. 
NO-Fault Insurance Auto insurance coverage that pays for each driver’s own injuries, regardless of who caused the accident. No-fault varies from state to state. It also refers to an auto liability insurance system that restricts lawsuits to serious cases. Such policies are designed to promote faster reimbursement and to reduce litigation.
Non-Forfeiture Options The various ways in which a contract owner may apply the cash surrender value of an insurance or an annuity contract if the contract lapses. In the United States, the typical nonforfeiture options for life insurance are the Cash Payment Option, the Extended Term Insurance and the reduced paid-up insurance option. (See Cash Payment Option; Cash Surrender Value; Extended Term Insurance; reduced paid-up insurance option)
 
Non-Owned Auto A borrowed or rented automobile 
   
  O INDEX
Occurrence An event or series of events which causes Bodily Injury and/or Property Damage. May include repeated or continuous exposure to the same injurious condition.
Operator In auto insurance, that person seated immediately behind the steering controls of the automobile and no other person.
   
  P INDEX
Permissive User An entity not listed on the policy, using the insured's vehicle with permission. Depending on the particular policy, certain individuals may not be covered, even if given is permission by the insured. (See Exclusions) 
Policy A legal Contract which contains the agreement between the Insurer and the Named Insured. A Policy is made up of five (5) parts:
 
  • The Declarations
  • The Insuring Agreement(s)
  • The Exclusions
  • The Conditions
  • The Definitions
Policy Jacket A preprinted brochure which contains all policy language except that contained in the Declarations Page and Endorsements. In the Policy Jacket you will find the Insuring Agreement(s), Exclusions, Conditions and Definitions.
Premium Consideration paid by the insured for the policy. The cost of the policy.
Primary That policy which must pay first in the event of loss. This would be due to the wording of the policy as in the case of an Excess Liability policy or where two policies apply to the same loss. (See Excess) 
Private Passenger Auto A self propelled motor vehicle, with neither more nor less than four wheels, designed for use upon streets and highways and subject to motor vehicle registration under the laws of California.
Producer A fire and casualty licensee who, for compensation, acts or aids in any manner of soliciting, negotiating, or procuring the making of any insurance contract on behalf of the insured. 
Producer Fee The fee charged by the producer for services, which is in addition to the premium. 
Proof of Non-Fault/ No B/I Documentation required by the insurer to support not charging for an accident or not assigning points for bodily injury in an accident. Acceptable forms are limited to a police report, a letter from the previous insurer or a letter from the carrier of the other party in the accident. The insurer may accept a copy of the claims check stub if it contains sufficient information.
Property Damage Damage or destruction including loss of use of a Third Party's property. Reduction in value is the measure of Property Damage. 
Punitive and Exemplary Damage That form of damages, awarded by the court, which is intended to punish the wrong-doer, not to compensate the injured party. This form of damages is generally not covered by a liability policy.
   
  Q INDEX
Quote An estimate of the cost of insurance given to a prospective client. This estimate does not constitute an offer and therefore is not enforceable. It is literally an invitation to the insured to make an offer. The offer, which may be accepted or rejected, is the policy application.
   
  R INDEX
Reinstate with Lapse The act of re-activating a policy which has ceased to be valid due to expiration or cancellation. There is a period between the cessation of coverage and its reinstatement during which the carrier provided no coverage. (See Cancel) 
Rental Reimbursement That optional coverage which will reimburse the insured for the expense of renting a vehicle while his/her vehicle is in the shop due to a covered loss. Coverage is usually written with a per day Limit and a maximum number of days per Occurrence. (See Limit; Occurrence) 
Replacement Cost The cost of replacing the damaged property with new property of like kind and quality without deduction for depreciation. (See Actual Cash Value) 
   
  S INDEX
SR1P A form filed by the insurance company with the California Department of Motor Vehicles (DMV) which states that the insured has an auto insurance policy that meets California financial responsibility requirements and requires that the DMV be notified if such policy is cancelled. The requirement to file such form is usually due to an uninsured accident or due a negligent operator suspension. (See SR23)
SR22 A form filed by the insurance company with the California Department of Motor Vehicles (DMV) which is one of three (3) types: a) Owners filing - States that the person named on the form is insured while driving any vehicle that he/she owns subject to usual policy exclusions. b) Operators filing - States that the person so named is insured while driving any vehicle not owned subject to usual policy exclusions. c) Broad Form Owner/Operator filing - States that the person so named is insured while driving any vehicle. This form requires that in the event of policy cancellation the DMV be notified. (See SR1P)
Split Limits A limits structure for Bodily Injury and Property Damage Liability or Uninsured Motorist coverage which provides, for Bodily Injury, one limit per person, which is the maximum payable for all damages payable to any one injured person, a separate limit per Occurrence, which is the maximum payable for all Bodily Injury in any one occurrence, and a third limit which is the maximum payable for Property Damage in any one Occurrence. Most personal lines auto insurance is written Split Limits. (See Limit; Occurrence; Combined Single Limit)
Subrogation The transfer of the insured's legal right against an injuring Third Party to the insurance carrier. (See Third Party) 
   
  T INDEX
Third Party Someone not protected by the Insurance Policy. Typically the other party in an auto accident. (See First Party)
Towing The optional auto insurance coverage which will reimburse the insured for the expense of towing or repairs at the place of disablement in the event the vehicle becomes disabled. Coverage is written with a per Occurrence Limit. (See Occurrence; Limit) 
Trailer Liability Trailer Liability is always provided by the towing vehicle. (See Liability)
   
  U  
Umbrella A broad liability coverage form that provides another layer of liability coverage over all covered personal lines exposures, (i.e., the auto policy, the homeowner liability coverage, the boatowners policy, etc.). The form also provides coverage for some exposures that are not covered by the underlying policies such as coverage for libel and slander (Personal Injury). (See Liability) 
Uninsured Motorist Bodily Injury (UMBI) That coverage which, in the event our insured is injured in an accident which is the fault of an Uninsured Motorist, covers the Bodily Injury expense of the Named Insured, Relatives and passengers in his/her auto. The coverage is generally written with a per person and per Occurrence limit. (See Occurrence, Limit; Named Insured) 
Uninsured Motorist Property Damage (UMPD) That coverage which, in the event our insured's car is damaged in an accident which is the fault of an Uninsured Motorist, pays the cost of repairing the auto. This coverage is only written when the policy does not cover collision and has a variable maximum Occurrence Limit. (See Collision Deductible Waiver)