All posts in Insurance Glossary: N-S

Named Driver
June 23, 2011, Comments Off

This is a person who is listed on the policy as a driver of any of the covered vehicles.

Named Driver Exclusion
June 23, 2011, Comments Off

These are drivers in your household or others whom you specify are not to be covered by your insurance policy.

Named Insured
June 23, 2011, Comments Off

This is any person specified by their name as the insured(s) on a policy, typically a single person, or wife and husband ...

Named Non-owned Auto Coverage
June 23, 2011, Comments Off

This coverage is for individuals who do not own autos and need insurance because they drive borrowed autos.

National Association of Insurance Commissioners
June 23, 2011, Comments Off

This organization is comprised of state insurance commissioners and other state officials who have the authority to regu ...

National Highway Traffic & Safety Admininstration
June 23, 2011, Comments Off

This is the division within the Department of Transportation that oversees and administrates safety regulations, such as ...

Negligence
June 23, 2011, Comments Off

The failure to exercise the care that an ordinary, reasonable person would exercise; either doing that which a prudent p ...

Newly Acquired Autos
June 23, 2011, Comments Off

Any auto purchased after the effective date, but before the expiration date of an auto policy is considered “newly ...

No-fault Coverage
June 23, 2011, Comments Off

While it varies from state to state, typically no-fault coverage provides first party benefits for medical expenses, los ...

No-fault Insurance
June 23, 2011, Comments Off

Under a state with a No-Fault system as opposed to a Tort system or Add-On Benefits Systems, your insurance company woul ...

Non smoker
June 23, 2011, Comments Off

Discounts may be available for liability, no fault medical benefits and collision to someone who has not smoked cigarett ...

Non-renewal
June 23, 2011, Comments Off

This is a cancellation of insurance coverage at the expiration date. A nonrenewal can be initiated by the policyholder ( ...

Nonadmitted Insurer
June 23, 2011, Comments Off

This insurance company is not licensed to do business in a particular state.

Nonresident Agent
June 23, 2011, Comments Off

This is an individual licensed in a state in which he or she does not reside.

Nonstandard Insurance Company
June 23, 2011, Comments Off

An insurance company that provides coverage for those risks that cannot be placed with a preferred, standard or assigned ...

Nonstandard Risk
June 23, 2011, Comments Off

This pertains to a request for coverage in which the potential policyholder does not satisfy the preferred or standard r ...

Notice of Cancellation
June 23, 2011, Comments Off

Written notice of intent to cancel insurance can come from either the company or the insured.

Notice of Loss
June 23, 2011, Comments Off

This is when you officially communicate to the insurance company that you have suffered a loss for which you are insured ...

Occasional Driver
June 23, 2011, Comments Off

This is the person who drives the vehicle infrequently.

Occurrence
June 23, 2011, Comments Off

This is an event, such as an accident or theft that results in a loss for the insured. Coverage typically responds on a ...

Odometer
June 23, 2011, Comments Off

This is the instrument on a vehicle that measures distances traveled.

Operating Leverage
June 23, 2011, Comments Off

This represents the extent to which a company’s costs of operating are fixed (rent, insurance, executive salaries) ...

Operating Performance
June 23, 2011, Comments Off

This is a measure of how well the company is doing. Many different measures, such as expense ratios, sales performance a ...

Organization Structure
June 23, 2011, Comments Off

The management of a company can influence how the company handles its daily and long-term operations. Among the manageme ...

Other Coverage
June 23, 2011, Comments Off

Other is a category of coverage on your premium breakdown screen, that refers to the cost of including certain state spe ...

Out Of State Coverage
June 23, 2011, Comments Off

This coverage specifies which persons are entitled to benefits out of state. Example: There is an accident in a Tort sta ...

Passive Disabling
June 23, 2011, Comments Off

Passive Disabling alarms automatically engage devices that disable the ignition, battery or other vehicle features that ...

Permissive Users
June 23, 2011, Comments Off

People you permit to borrow your auto are covered as permissive users. However, if the person is not a named driver on t ...

Persistency
June 23, 2011, Comments Off

You may be rewarded with a credit for persistency if you have been insured with a specific company over a period of time ...

Personal Injury Protection
June 23, 2011, Comments Off

PIP is a First Party Benefit available in states with mandatory or optional No-Fault coverage. It usually includes medic ...

Personal Lines
June 23, 2011, Comments Off

This term refers to insurance for individuals and families, including automobile, homeowners, umbrella, fine arts, water ...

Persons Entitled to Benefits
June 23, 2011, Comments Off

This specifies which persons may receive the First-Party Benefits under a No-Fault policy when the accident occurs in th ...

Persons Excluded
June 23, 2011, Comments Off

In a No-Fault state, these are the persons to whom First-Party Benefits may or must be withheld from in the event of an ...

Physical Damage Insurance
June 23, 2011, Comments Off

This term indicates coverage from such perils as collision (accident) and comprehensive (fire and theft) to your covered ...

Physically or Mentally Impaired Driver
June 23, 2011, Comments Off

This is a driver with a restriction on his/her license that refers to a disability. Medical questions asked on the auto ...

Policy
June 23, 2011, Comments Off

This is a printed document, which is issued by the insurance company and states the terms of the insurance contract. It ...

Policy Changes
June 23, 2011, Comments Off

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

Policy Fee
June 23, 2011, Comments Off

An additional premium charge added to a policy by the agent or broker to service your policy. Your insurance company may ...

Policy Reserves
June 23, 2011, Comments Off

This is the amount of money a company sets aside today, so that after receipt of future premiums, less expenses, the com ...

Policyholder
June 23, 2011, Comments Off

This is the person who owns the policy. The policyholder is also often referred to as the “insured” and R ...

Pool
June 23, 2011, Comments Off

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

Preferred Provider Option
June 23, 2011, Comments Off

By accepting this option, you agree to repair your car at pre-approved auto repair shops named by the insurance company. ...

Preferred Risk Insurance Company
June 23, 2011, Comments Off

This is an insurance company that writes auto insurance policies for drivers who are considered better risks as compared ...

Premium
June 23, 2011, Comments Off

This is the amount of money an insurance company charges to provide specific coverage for a specified period of time.

Premium Frequency
June 23, 2011, Comments Off

This is defined as the number of times during the policy year that you need to pay premiums. Frequency options are typic ...

Premium Notice
June 23, 2011, Comments Off

Insurance companies or agents notify a policyholder that a premium will be due on a given date. Also referred to as a bi ...

Previously Owned
June 23, 2011, Comments Off

This is a vehicle that has belonged to someone else prior to your purchasing it. It is also known as a used vehicle.

Primacy of Benefits
June 23, 2011, Comments Off

This means that First-Party Benefits must be exhausted before other sources can be called upon when similar benefits are ...

Primary Coverage
June 23, 2011, Comments Off

This is coverage, such as auto insurance, that provides benefits up to the limits of a policy, regardless of what other ...

Primary Insured
June 23, 2011, Comments Off

A person who fills out and signs a request for insurance coverage is usually referred to as the primary insured or appli ...

Principal Driver
June 23, 2011, Comments Off

Principal Driver is the person who drives the car most frequently.

Priority of Policies
June 23, 2011, Comments Off

This specifies the order in which different policies apply to a claim when there is more than one policy involved.

Private Passenger Vehicles
June 23, 2011, Comments Off

Insurance companies usually define these as four-wheel vehicles that are not used to carry passengers for a fee. Pick-up ...

Pro-Rata Cancellation
June 23, 2011, Comments Off

When policyholders cancel a policy, they are entitled to the unearned portion of the premium for the unused period of th ...

Producer
June 23, 2011, Comments Off

An agent, solicitor or individual, licensed to sell insurance is also known as a producer.

Product Lines
June 23, 2011, Comments Off

These are the types of insurance coverage offered by an insurance company, such as term life, fixed-rate annuity, home, ...

Proof of Loss
June 23, 2011, Comments Off

You must make a formal statement regarding your loss before the insurance company will pay a claim. This statement is ca ...

Property Damage
June 23, 2011, Comments Off

Property Damage is the part of your liability coverage that will pay damages to another’s property (up to the limi ...

Protection
June 23, 2011, Comments Off

This term is used interchangeably with “coverage” and “insurance.”

Punitive Damages
June 23, 2011, Comments Off

Also called exemplary damages, these are awarded by the court to acknowledge and punish a negligent party for wanton, re ...

Quality of Investments
June 23, 2011, Comments Off

Analysts look at an insurance company’s investment in terms of type, quality and security and how well they are sp ...

Recreational Vehicles
June 23, 2011, Comments Off

Most insurance companies define recreational vehicles as the following: All terrain vehicles, dune buggies, golf carts, ...

Registered Owner
June 23, 2011, Comments Off

This is the person who is named as the owner or responsible party for a vehicle in the records of the state Department o ...

Reinstatement
June 23, 2011, Comments Off

Putting coverage back into effect after it was cancelled or suspended is called reinstatement.

Reinsurance
June 23, 2011, Comments Off

Insurance companies need to limit the amount of exposure on any one claim or event to avoid large income fluctuations (o ...

Rejection
June 23, 2011, Comments Off

Coverage is automatically issued to replace an expiring policy.

Renewal Certificate
June 23, 2011, Comments Off

An insurance company issues this document to its policyholder to show proof of coverage for yet another policy term (aft ...

Rental Reimbursement
June 23, 2011, Comments Off

This coverage provides costs for rental car coverage when, for example, the policyholder’s car is stolen or damage ...

Replacement
June 23, 2011, Comments Off

This is a new policy issued to take the place of another policy currently in force. See Renewal Certificate.

Replacement Services Benefits
June 23, 2011, Comments Off

These are benefits to pay someone, other than a family member, for services the victim would have normally performed wit ...

Request for Coverage
June 23, 2011, Comments Off

This is a required written statement by a potential policyholder, which provides that information that an insurance comp ...

Required Deductibles
June 23, 2011, Comments Off

This designates additional deductibles, which insurers must offer and insured may accept. Limits are specific to each st ...

Required Optional Coverage
June 23, 2011, Comments Off

This designates additional deductibles, which insurers must offer and insured may accept. Limits are specific to each st ...

Reserve
June 24, 2011, Comments Off

This term applies to the assets that are earmarked to pay future benefits.

Reserve Adequacy
June 24, 2011, Comments Off

This term is used to describe whether the amount of the assets are able to support future benefit payments.

Restraints
June 24, 2011, Comments Off

These are air bags, seatbelts and combination of air bags, seat/shoulder belts. Depending on the state laws and individu ...

Return Premium
June 24, 2011, Comments Off

Upon cancellation of an insurance policy prior to the expiration date, the unused portion of the premium is returned to ...

Risk
June 24, 2011, Comments Off

The chance that you will have an accident or loss is a risk and the reason why you buy automobile insurance. The extent ...

Risk Assessment
June 24, 2011, Comments Off

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

Risk-Adjusted Capital Ratios
June 24, 2011, Comments Off

This is about managing the balance between assets and liabilities or debts and establishing the desired ratio. Capital r ...

Secondary Rating Factors
June 24, 2011, Comments Off

These are factors, such as your sex, marital status, use of vehicles and/or where you live, that are used in addition to ...

Settlement
June 24, 2011, Comments Off

Usually this is a claims payment or policy benefit. It signals an agreement as to the amount and method of payment. It c ...

Short Rate Cancellation
June 24, 2011, Comments Off

When an insured cancels a policy midterm or before the expiration date of the policy, the premium refunded to the insure ...

Single-Limit
June 24, 2011, Comments Off

This type of liability limit is expressed in a single number. It is also referred to as Combined Single Limit (CSL). It ...

Special Damages – Economic
June 24, 2011, Comments Off

These are damages that can be measured, such as time off from work. Limits are specific to each state.

Special Equipment
June 24, 2011, Comments Off

These would include equipment or accessories installed in your vehicle such as a stereo, CD player or cellular phone. In ...

Split Limits
June 24, 2011, Comments Off

This coverage pays a certain amount for each injured person and a total amount per accident for all injured persons. Thi ...

Spread of Risk
June 24, 2011, Comments Off

The spread of risks refers to whether or not the risks assumed by the company are spread out or are they concentrated in ...

Stacking
June 24, 2011, Comments Off

An insurance practice that increases the money available to pay auto liability claims. In states where this practice is ...

Standard & Poors
June 24, 2011, Comments Off

This New York-based rating service bases its judgment of insurers on their claims paying ability. The more reliable a ca ...

Standard Insurance Company
June 24, 2011, Comments Off

This is an insurance company that offers policies with all the basic and optional coverages that you would want on one p ...

Stated Amount
June 24, 2011, Comments Off

Sometimes shown as “Agreed Value,” this is the agreed amount to be paid in the event of a total loss, regard ...

Street Rod
June 24, 2011, Comments Off

A Street Rod is a vehicle or replica over 25 years old which is limited to 2,500 miles or less per year, appreciating in ...

Supplemental Optional Coverage
June 24, 2011, Comments Off

This is coverage that is not included in the standard automobile insurance policy. Examples of optional coverage are tow ...

Surplus
June 24, 2011, Comments Off

This is the amount by which the total company assets exceed the assets earmarked to pay future policy benefits. In other ...

Surplus Adequacy
June 24, 2011, Comments Off

Surplus adequacy is a measure of whether a company’s assets in excess of liabilities are sufficient to pay your be ...

Surplus Lines
June 24, 2011, Comments Off

A risk for which there is no readily available insurance market available can be placed with a nonadmitted insurance com ...

Surplus Position Relative to the Companys Risk Profile
June 24, 2011, Comments Off

This weighs whether or not the insurance company has enough surplus to cover the risks it is assuming. For instance, a c ...

Survivors Benefits
June 24, 2011, Comments Off

Generally, survivor benefits include compensation to dependents of the deceased victim for lost wages and replacement se ...

Syndicate
June 24, 2011, No Comments

A group, association or pool of insurance companies who join economic forces to provide coverage that may be of such tot ...

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