All posts in Insurance Glossary: E-M

Earned Premium
June 22, 2011, Comments Off

This refers to a portion of policy premium that has been used up during the term of the policy. For example, six months ...

Earning trends
June 22, 2011, Comments Off

This reflects the insurance company’s profits over given periods of time.

Effective Date
June 22, 2011, Comments Off

The day upon which a policy first becomes eligible to pay covered losses.

Electric Auto
June 22, 2011, Comments Off

An electric auto is a motor vehicle of the private passenger type that is run by electric power and is not used for comm ...

Endorsements
June 22, 2011, Comments Off

Additions, deletions, or changes to the coverage of a policy are endorsements or policy changes. These can include the c ...

Estimated Premium
June 22, 2011, Comments Off

An estimated premium is an approximate cost for your insurance coverage. Until the insurance company performs underwrit ...

Ex Gratia
June 22, 2011, Comments Off

Ex gratia is Latin for “from favor.” An ex gratia payment may be made by an insurance company to an insured ...

Exceptions
June 22, 2011, Comments Off

These are losses that are not covered by your automotive policy. They can include: + Drivers excluded from the policy + ...

Excess Insurance
June 22, 2011, Comments Off

This is an insurance policy designed to provide additional coverage over one or more primary policies, such as home and ...

Exotic Vehicle
June 22, 2011, Comments Off

An exotic vehicle is a one of a kind, irreplaceable, or one of a “limited production” of vehicles made. For ...

Expiration
June 22, 2011, Comments Off

This is the date that your insurance coverage ends.

Exposure
June 22, 2011, Comments Off

Your potential for accidents and other losses is called exposure. It’s measured by insurance companies in determin ...

Farm Use
June 22, 2011, Comments Off

This means the auto is principally garaged on a farm or ranch, and is not customarily used for going to or from work or ...

Financial Responsibility
June 22, 2011, Comments Off

If you are in an accident, you may be required by your state laws to show proof of insurance or the ability to pay for d ...

First-Party Benefits
June 22, 2011, Comments Off

This is coverage provided for the insured’s property or person. Coverages under this category are: Medical, Wage L ...

Flat Cancellation
June 22, 2011, Comments Off

This is when the policy is cancelled as of its renewal or issue date. In such cases, there is no earned premium or any p ...

Fortuitous Event
June 22, 2011, Comments Off

This is an accidental, chance happening.

Fraudulent Statement
June 22, 2011, Comments Off

This is an intentional false statement or misrepresentation of the facts made with the intent to deceive another party.

Full Coverage
June 22, 2011, Comments Off

Insurance that provides payment of all possible insured losses is called full coverage. The term doesn’t in any wa ...

Funeral Benefit
June 22, 2011, Comments Off

This is typically provided if you or a family member dies in any car crash. The availability and amount of this benefit ...

Funeral Benefits
June 22, 2011, Comments Off

Funeral benefits refer to amounts that can be paid to the victim’s survivors for burial expenses. Limits are speci ...

General Damages
June 22, 2011, Comments Off

This is the specific injury or medical expenses required in order for the victim or survivors to sue in tort for non-eco ...

Golf Cart
June 22, 2011, Comments Off

A golf cart is a three or four wheel motor vehicle with limited speed capabilities designed to carry golfers and their e ...

Good Driver Discount
June 22, 2011, Comments Off

Generally insurers offer a discount to people who meet a certain criteria of safe driving. The definition of a good driv ...

Good Student Discount
June 22, 2011, Comments Off

Policies vary among insurers. Generally, in order to qualify for this discount, the insured needs to provide a current c ...

Hazard Insurance
June 22, 2011, Comments Off

This is insurance which a bank or lender puts on your auto to protect their interest in the vehicle. It is used if you d ...

High Risk
June 22, 2011, No Comments

This refers to a driver or group of drivers who are considered to be more likely to have an accident or loss than normal ...

Hired Auto
June 22, 2011, Comments Off

These are autos that are leased, hired, rented or borrowed, but not owned by the insured or members of the households.

Identification Card
June 22, 2011, Comments Off

A card is given to the insured as proof of insurance. In the event you’re in an accident, it contains your name an ...

In Force
June 22, 2011, Comments Off

This is a policy that has been issued and is currently providing coverage.

In State
June 22, 2011, Comments Off

This coverage specifies which persons will be entitled to benefits as referenced by the No-Fault laws and the policy for ...

Income Loss
June 22, 2011, Comments Off

In states where this is available, it covers a specified percentage of lost salary and wages when your injuries from a c ...

Indemnify
June 22, 2011, Comments Off

This is to restore the victim of a loss to the same position as before the loss occurred. However, the insured is not su ...

Independent Adjuster
June 22, 2011, Comments Off

An independent contractor, hiring out to insurance companies for the investigation and settlement of claims, is known as ...

Independent Agency System
June 22, 2011, Comments Off

This is a system within which independent contractors, known as agents, sell and service insurance solely on a commissio ...

Industry Competitive Position
June 22, 2011, Comments Off

This is the competitiveness of the insurance company’s current products compared to other products currently avail ...

Industry Specific Risk
June 22, 2011, Comments Off

Risks that are specific to a certain industry. For example, the profitability of insurance companies writing deferred fi ...

Inflation
June 22, 2011, Comments Off

An economic period characterized by rising prices, low unemployment, an expanding economy and erosion of consumer’ ...

Insurable Interest
June 22, 2011, Comments Off

This is the financial interest a person or party has in the vehicle being insured under an insurance policy.

Insurable Risk
June 22, 2011, Comments Off

This is a decision by the insurance company that the vehicle(s) or driver(s) being insured are an acceptable risk.

Insurance Agent
June 22, 2011, Comments Off

A person who represents one or more insurance companies and who usually sells all types of insurance on a commission bas ...

Insurance Association
June 22, 2011, Comments Off

This is an association or syndicate of insurance companies who share proportionately in writing auto insurance for peopl ...

Insurance Broker
June 22, 2011, Comments Off

Is an independent insurance salesperson, licensed by the state. A Broker is not necessarily authorized by an insurance c ...

Insurance Carrier
June 22, 2011, Comments Off

This is another way of saying insurance company or insurer or provider. The carrier issues the policy and is ultimately ...

Insurance Company
June 22, 2011, Comments Off

This is the party in an insurance contract who has issued the policy and is responsible for paying all benefits specifie ...

Insurance Company Profitability
June 23, 2011, Comments Off

This is the level of profit made by the insurance company. Profit has to be adequate so that a small adverse change in c ...

Insurance Department
June 22, 2011, Comments Off

Governmental bureaus in each state are charged with the administration of insurance laws. These insurance departments li ...

Insurance License
June 23, 2011, Comments Off

This certificate authorizes an agent or insurance company to sell insurance and is provided by the state’s departm ...

Insurance Policy
June 22, 2011, Comments Off

This printed form serves as the contract between an insurance company and the insured.

Insurance Services Office
June 22, 2011, Comments Off

This organization is designed to gather statistics, announce rates and develop policy forms for all insurance companies ...

Insured
June 22, 2011, Comments Off

The insured is the person who is covered by the insurance policy.

Insurer
June 22, 2011, Comments Off

This is another term used for an insurance company. It is the party in an insurance contract that issues the policy an ...

Insuring Agreement
June 22, 2011, Comments Off

A portion of an insurance policy states the perils insured against, the persons and/or property that are covered, their ...

Interest
June 22, 2011, Comments Off

“Interest” is your legal interest in your property/auto. You need to have this interest in order for the ins ...

Joint Ownership Coverage Endorsement
June 22, 2011, Comments Off

This form is sometimes attached to a policy to insure vehicles not owned, leased or financed by an individual or married ...

Kelley Blue Book
June 22, 2011, Comments Off

This is a third-party price guide for vehicles.

Lapse
June 22, 2011, Comments Off

When a premium that is due goes unpaid, a cancellation or lapse of the policy soon follows. A lapsed policy typically oc ...

Legal Contract
June 22, 2011, Comments Off

This is a binding agreement between two or more parties, which outlines the terms and conditions of the agreement, and i ...

Leverage
June 22, 2011, Comments Off

There are two kinds of leverage in the insurance world. Operating leverage ratio is premium income divided by the sur ...

Liability
June 22, 2011, Comments Off

This insurance pays sums that the policyholder is legally obligated to pay, or that the insurance company has agreed to ...

Liability Limits
June 23, 2011, Comments Off

This is the maximum amount of coverage available under a liability insurance policy.

Limit of Liability
June 23, 2011, Comments Off

This is the most money that an insurance company agrees to pay in case of a loss according to the terms of the policy.

Limitations
June 23, 2011, Comments Off

These are the highest amounts of money payable for a stated loss. For instance, rental reimbursement has a limited daily ...

Limited Tort Option
June 23, 2011, Comments Off

Some states allow you to agree to give up the right to sue for pain and suffering under certain circumstances. In exchan ...

Liquidity
June 23, 2011, Comments Off

This indicates the ease and speed with which an investment can be converted to cash. For example, a short-term Treasury ...

Long-term solvency
June 23, 2011, Comments Off

This refers to whether or not a company can meet its financial obligations over a particular period, for example, 10, 20 ...

Loss
June 23, 2011, Comments Off

An event that causes the company to pay either the insured or the claimant is defined as a loss.

Loss Experience
June 23, 2011, Comments Off

This is the actual number of losses that have occurred for a given group of drivers.

Loss Record
June 23, 2011, Comments Off

Your record of loss activity while insured is kept and reviewed by your insurance company when your policy comes up for ...

Lost Policy Release
June 23, 2011, Comments Off

A Lost Policy Release is used to cancel a policy. It is also called a “Cancellation/Lost Policy Release.” Th ...

Market Value
June 23, 2011, Comments Off

This is what a willing buyer would page a seller for a comparable vehicle in like condition.

Material
June 23, 2011, Comments Off

This is important information or a fact that can determine whether or not an insurance company will accept the risk and ...

Material Misrepresentation
June 23, 2011, Comments Off

This is a misstatement to a question asked during the application process that is so important that, had the truth been ...

Mature Driver
June 23, 2011, Comments Off

This discount is often offered to drivers aged 55 or over that have completed the Mature Driver Improvement Course, and ...

Medical Benefits
June 23, 2011, Comments Off

These are benefits that generally included doctor, hospital, and rehabilitation expenses. Most states have a maximum lim ...

Medical Payments
June 23, 2011, Comments Off

This coverage pays regardless of fault. It covers medical, surgical, dental, and funeral expenses resulting from a cover ...

Minimum Coverage
June 23, 2011, Comments Off

This is the lowest amount of liability insurance coverage allowed under the laws in your state or by an insurance compan ...

Minimum Premium
June 23, 2011, Comments Off

This is the lowest amount of money an insurance company will charge for a given coverage.

Minor
June 23, 2011, Comments Off

In most states, a minor can enter into a contract that, in most circumstances, is voidable at the discretion of the mino ...

Miscellaneous Type Vehicle Endorsement
June 23, 2011, Comments Off

This is used to extend insurance coverage to recreational vehicles, motor homes, motorcycles, motorized golf carts and o ...

Misrepresentation
June 23, 2011, Comments Off

A misrepresentation is a misstatement to a question asked during the application process.

Mode of Premium Payment
June 23, 2011, Comments Off

This is the frequency in which a policyowner elects to pay premiums. Frequency options are typically annual, semi-annual ...

Modified Vehicle
June 23, 2011, Comments Off

A modified vehicle is one that has been altered or changed from the original condition.

Moodys
June 23, 2011, Comments Off

For a fee, Moody’s, at the request of an insurance company, analyzes the insurance company’s ability to pay ...

Motor Home
June 23, 2011, Comments Off

A motor home is a self-propelled truck or van-type motor vehicle with a self-contained living area that is an integral p ...

Motorcycle
June 23, 2011, Comments Off

Generally, a regular or basic motorcycle features upright seating for one or two passengers. A high performance motorcyc ...

Moving Violation
June 23, 2011, Comments Off

These are speeding tickets and other traffic violations that result in points against your driver’s license (recor ...

Multi-car Discount
June 23, 2011, Comments Off

This is a discount for putting all family vehicles on the same policy.

Multi-vehicle Policy
June 23, 2011, Comments Off

This single policy covers more than one vehicle and often, several drivers.

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