All posts in Insurance Glossary: A-D

A.M. Best
June 22, 2011, Comments Off on A.M. Best

A.M. Best is the oldest insurance rating agency in the world and has been reporting on the financial condition of virtua ...

Accident
June 22, 2011, No Comments

An accident is an unintended, unforeseen casualty or mishap. It occurs suddenly and at a definite place.

Accident Frequency
June 22, 2011, No Comments

When an insurance company asks about your accident frequency, they are asking about the number of accidents you have exp ...

Accident Prevention Course
June 22, 2011, No Comments

Some insurance companies offer a discount for having taken an accident prevention course approved by your motor vehicle ...

Accidental Death Benefit
June 22, 2011, No Comments

In some states, you can purchase Accidental Death Benefit coverage. It provides for payment if you or anyone covered by ...

Active Disabling
June 22, 2011, No Comments

Active Disabling alarms are those in which you can manually set a turn-off feature that disconnects the ignition or batt ...

Acts of God
June 22, 2011, No Comments

Unlike accidents, these events are the result of natural causes, without human intervention, and could not have been pre ...

Actual Cash Value
June 22, 2011, No Comments

Actual cash value is usually defined as the fair market value of your vehicle, taking into account the mileage, age, opt ...

Add-On Benefits
June 22, 2011, No Comments

Add-on Benefits refers to add-on plans that pay certain benefits to person injured as a result of an automobile accident ...

Additional Insured
June 22, 2011, No Comments

These are persons other than the policy owner, who are also protected by the terms of the policy.

Adequacy of Surplus
June 22, 2011, No Comments

This is a measure of whether a company’s assets, in excess of liabilities, are sufficient to pay your benefits eve ...

Adjuster
June 22, 2011, No Comments

This employee of the insurance company or independent agent assesses the damage to your person or property and makes rec ...

Adjustment
June 22, 2011, No Comments

The process of determining the amount of a loss and settling the claim is know in insurance circles as an adjustment.

Admitted Company
June 22, 2011, No Comments

This is an insurance company that has been licensed by the insurance department of a state to do business in that state.

Adverse Underwriting Decision
June 22, 2011, No Comments

Based on their insurance guidelines, an insurance company might cancel an existing policy or decline a request for cover ...

Age of Majority
June 22, 2011, No Comments

The age at which you are granted full civil rights (e.g., able to vote, able to legally sign a contract on your own, etc ...

Alarm Only
June 22, 2011, No Comments

Alarm only means that you have an alarm that can be heard from approximately 300 feet away and lasts for at least three ...

Alien Company
June 22, 2011, No Comments

This is an insurance company whose main office is located in a foreign country.

All Terrain Vehicle
June 22, 2011, No Comments

An all-terrain vehicle is a three, four or six wheel motor vehicle equipped with a motorcycle engine, balloon tires or c ...

Anti-lock braking system
June 22, 2011, No Comments

This is a computer-controlled anti-lock braking system which, upon the driver’s application of the brake pedal, de ...

Anti-theft Devices
June 22, 2011, No Comments

Specific devices to discourage car thieves–such as car alarms, ignition cut-offs, wheel locks and hood locks– ...

Antique Auto
June 22, 2011, No Comments

An antique auto is a private passenger automobile twenty-five or more years of age, maintained solely for use in exhibit ...

Applicant
June 22, 2011, No Comments

The person applying for an insurance policy is an applicant. The applicant is usually the intended policyowner after a p ...

Application for Auto Insurance
June 22, 2011, No Comments

This represents one or more forms completed by an individual seeking to buy insurance. The purpose of the forms is to pr ...

Appointment
June 22, 2011, No Comments

This authorization from an insurance company gives the insurance agent the authority to act in its behalf as an agent. ...

Apportionment
June 22, 2011, 1 Comment

When more than one insurance contract covers a loss, the amount to be paid is divided amongst them. The way it is divide ...

Appraisal Clause
June 22, 2011, No Comments

This is similar to an arbitration clause. However, an appraisal clause is used for disagreements on value of property or ...

Appraisal of Loss
June 22, 2011, No Comments

When the insurance company and car owner disagree about the actual cash value of their loss, each party can call in an a ...

Arbitration Clause
June 22, 2011, No Comments

When disputes arise concerning the amount of recovery that would be paid to the insured under his or her uninsured motor ...

Artisan Use
June 22, 2011, No Comments

A craftsman or skilled worker, such as a carpenter. A few insurance companies consider special rates for the miles an ar ...

Asset / Liability Management
June 22, 2011, No Comments

Insurance companies carry out asset-liability management by matching the maturity of their investments with their expect ...

Asset Quality and Concentration
June 22, 2011, No Comments

Analysts look at the company’s investment portfolio in terms of type and quality, security and how well investment ...

Assigned Risk
June 22, 2011, No Comments

When a driver cannot obtain insurance from the voluntary insurance market (preferred,standard and nonstandard insurance ...

Assigned Risk Plan
June 22, 2011, No Comments

Drivers unable to get insurance in the voluntary market because of their driving history are assigned to a specific insu ...

Authorized Insurer
June 22, 2011, No Comments

This is an insurance company/insurer authorized by the state to transact business in that state for specific types of in ...

Auto “Pleasure Use”
June 23, 2011, Comments Off on Auto “Pleasure Use”

An auto can be for “pleasure use” if it is not used for business. At the option of the insurance company, pl ...

Auto Appreciation
June 22, 2011, No Comments

A car can increase in value due to special added features or its popularity earned among collectors.

Automobile Coverage
June 22, 2011, No Comments

Beyond covering you for damage to others (liability and property damage), your policy can cover your car against accide ...

Backdate
June 22, 2011, No Comments

This is the process of making the effective date of an insurance policy earlier than the date the application is signed ...

Basic Limits
June 22, 2011, No Comments

Minimum requirements on how much liability must be provided by an auto policy are referred to as basic limits. These lim ...

Binder
June 22, 2011, No Comments

In auto insurance, this is a receipt issued-by either the insurance company or an insurance agent on behalf of an insu ...

Bodily Injury Liability
June 22, 2011, No Comments

This coverage pays up to a specific amount for injuries caused to other people when you are considered at fault in an ac ...

Broker of Record
June 22, 2011, No Comments

This licensed broker/agent has a contractual agreement to represent you to the insurance company.

Business Use
June 22, 2011, No Comments

The potential insurer will want to know if your auto is for “business use.” An example of business use would ...

Buyers Guide
June 22, 2011, No Comments

This consumer guide for persons contemplating purchasing or applying for an insurance policy includes important policy i ...

Cancellation
June 22, 2011, No Comments

This is when either the policyholder or the insurance company terminates a policy. Your rights to cancel as a policyhold ...

Capital Structure
June 22, 2011, No Comments

Companies raise money, or capital, by selling stock (common or preferred shares) or by borrowing money (short-or long-te ...

Capitalization
June 22, 2011, No Comments

Companies raise money, or capital, by selling stock (common or preferred shares) or by borrowing money (short- or long-t ...

Carpool
June 22, 2011, No Comments

A carpool is a group of people who drive together to their place of employment. Members of a carpool are often eligible ...

Carrier
June 22, 2011, No Comments

A carrier is the insurance company, also known as the provider or insurer.

Certificate of Insurance
June 22, 2011, No Comments

This short-form documentation provides the proof of insurance often required for loan transactions or other legal docume ...

Claim
June 22, 2011, No Comments

This is a demand for payment from the insurance company by the policyholder, under the terms of an insurance policy. Cla ...

Claim Report
June 22, 2011, No Comments

This report gives the facts of a claim to the insurance company for payment of a covered loss. Sometimes called First Re ...

Claimant
June 22, 2011, Comments Off on Claimant

This is the person who is requesting payment for a loss.

Claims Made
June 22, 2011, Comments Off on Claims Made

If a claim is made during the time period when a liability policy is in effect, an insurance company is responsible for ...

Claims Occurrence
June 22, 2011, Comments Off on Claims Occurrence

If a claim arises out of an event during the period when a policy is in force, the insurance company is responsible for ...

Claims Payments
June 22, 2011, Comments Off on Claims Payments

This compensates the insured or claimant for a covered loss and should usually be paid within 90 days of filing, dependi ...

Classic Auto
June 22, 2011, Comments Off on Classic Auto

A classic auto is an automobile which is 10 or more years of age, is of significantly higher value than the average valu ...

Clause
June 22, 2011, Comments Off on Clause

Also known as a form, attachment or endorsement, these are sentences and paragraphs that describe various coverages, exc ...

Collision
June 22, 2011, Comments Off on Collision

This covers the repair or replacement of your car as the result of an accident, regardless of who was at fault. It is us ...

Collision Deductible Waiver
June 22, 2011, Comments Off on Collision Deductible Waiver

This coverage is available in certain states and only if you have Uninsured Motorist Coverage. With this coverage, if a ...

Combination Policy
June 22, 2011, Comments Off on Combination Policy

This is a single policy that includes coverage for Auto and Homeowners (usually written as separate policies), and somet ...

Commute
June 22, 2011, Comments Off on Commute

This is the distance you travel to your place of employment or school. When the insurance company asks how far you commu ...

Comparative Negligence
June 22, 2011, Comments Off on Comparative Negligence

These are damages that are modified in proportion to the driver’s degree of negligence or fault in an accident. Fo ...

Comprehensive Coverage
June 22, 2011, Comments Off on Comprehensive Coverage

This coverage pays for repairs to your insured vehicle when it’s damaged in a non-collision type mishap such as th ...

Compulsory State Laws
June 22, 2011, Comments Off on Compulsory State Laws

These laws spell out the coverages required by the laws written by your state legislature, for auto insurance. Included ...

Conditions
June 22, 2011, Comments Off on Conditions

These are certain provisions of an insurance policy that spell out the rights and duties of the insured and the insuranc ...

Contract
June 22, 2011, Comments Off on Contract

The insurance company agrees, for a premium, to provide benefits, reimburse losses or provide services for you as the in ...

Conviction
June 22, 2011, Comments Off on Conviction

This is an accident or moving violation.

Coverage
June 22, 2011, Comments Off on Coverage

This is the total amount of protection provided to you by your insurance policy. It can include bodily injury, property ...

Covered Loss
June 22, 2011, Comments Off on Covered Loss

This is an injury, death, property loss or legal liability, for which an insurance company will pay benefits under the t ...

Covered Person
June 22, 2011, Comments Off on Covered Person

This is the person protected under the contract/policy of insurance.

Covered Vehicles
June 22, 2011, Comments Off on Covered Vehicles

These are the cars listed on your policy.

Credit Report
June 22, 2011, Comments Off on Credit Report

This is a confidential report made by an independent organization that has investigated the credit history of a someone ...

Declarations Page
June 22, 2011, Comments Off on Declarations Page

This is the first page of your policy and contains basic information such as the names of people covered, the dates the ...

Declared Value
June 22, 2011, Comments Off on Declared Value

You can request that a specified amount be allocated for the replacement of a covered vehicle. This declared value figur ...

Declination
June 22, 2011, Comments Off on Declination

This is when the insurance company rejects a request for coverage for insurance.

Deductible
June 22, 2011, Comments Off on Deductible

This is the amount you will pay out of your own pocket before the insurance company pays for a claim. For instance, if y ...

Defendant
June 22, 2011, Comments Off on Defendant

This is someone who is being sued in a court action.

Deposit Premium
June 22, 2011, Comments Off on Deposit Premium

This is an initial payment needed in order to put the policy in force. It is usually a percentage of the total cost of a ...

Direct Writer
June 22, 2011, Comments Off on Direct Writer

Some insurance companies, such as State Farm, Allstate, and Farmers, sell policies through salaried employees who only s ...

Disclosure Authorization Form
June 22, 2011, Comments Off on Disclosure Authorization Form

This is a form used in the nonstandard auto market, for people who do not qualify for automobile insurance from the usu ...

Discount
June 22, 2011, Comments Off on Discount

Many insurers offer savings to consumers who meet certain standards. Available discounts vary with each insurance compan ...

Distant Students
June 22, 2011, Comments Off on Distant Students

Discounts for students who attend school more than 100 miles from home and do not take the car along.

Distribution System
June 22, 2011, Comments Off on Distribution System

This consists of the various methods used by an insurer to provide life insurance policies to its customers. Companies a ...

Diversification
June 22, 2011, Comments Off on Diversification

This involves spreading one’s savings over a wide range of investment alternatives, such as savings account, commo ...

DMV
June 22, 2011, Comments Off on DMV

This is the state run regulatory office found in most cities where you can get your drivers license, register your vehic ...

Domestic Insurer
June 22, 2011, Comments Off on Domestic Insurer

An insurance company formed under the laws of the state in which the insurance is written.

Drive-in Claim Service
June 22, 2011, Comments Off on Drive-in Claim Service

Auto insurance companies operate these facilities, where the extent of damages to a claimant’s automobile can be d ...

Drive-other-car Coverage
June 22, 2011, Comments Off on Drive-other-car Coverage

This provision in an auto policy is designed to protect the policyholder/drivers when driving cars other than the one/s ...

Driver Discounts
June 22, 2011, Comments Off on Driver Discounts

Many insurers offer savings to consumers who meet certain standards. Available discounts vary with each insurance compan ...

Driver Education
June 22, 2011, Comments Off on Driver Education

This is a class that new drivers take in order to learn how to drive and get their license. It is available to anyone an ...

Driver Exclusion Endorsement
June 22, 2011, Comments Off on Driver Exclusion Endorsement

This is a change or amendment to your policy to specifically exclude certain drivers from coverage under your auto insur ...

Driver Experience
June 22, 2011, Comments Off on Driver Experience

Your past experience in the insurance company’s eyes is all about how many automobile losses and violations you ha ...

Driver Training
June 22, 2011, Comments Off on Driver Training

Some insurance companies offer a discount for having taken a driver training course from a certified instructor. You wil ...

Driving Record
June 22, 2011, Comments Off on Driving Record

Any moving violations you have been issued, and any reported accidents in which you have been involved are filed with th ...

Dual Air Bags
June 22, 2011, Comments Off on Dual Air Bags

This refers to the installation of an air bag system for both the driver and front seat passenger of a vehicle.

DUI
June 22, 2011, Comments Off on DUI

A person is considered DUI or DWI when he/she is driving a motor vehicle and has a blood alcohol level that exceeds the ...

Dune Buggy
June 22, 2011, Comments Off on Dune Buggy

A dune buggy is a motor vehicle designed or modified for use principally off road on rugged terrain.

DWI
June 22, 2011, Comments Off on DWI

These initials stand for “Driving While Intoxicated” due to use of alcohol or drugs. A person is considered ...

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