Glossary of Insurance Terms
Terms in this set (215)
an unexpected event or circumstance without deliberate intent.
insurance for unforeseen bodily injury.
Accidental Bodily Injury
unexpected injury to a person.
Actual Cash Value
repayment value for indemnification due to loss or damage of property; in most cases it is replacement cost minus depreciation
(PC Insurance)a document or other presentation, prepared as a formal means of conveying to the state regulatory authority and the Board of Directors, or its equivalent, the actuary's professional conclusions and recommendations, of recording and communicating the methods and procedures, of assuring that the parties addressed are aware of the significance of the actuary's opinion or findings and that documents the analysis underlying the opinion. (In Life and Health) this document would be called an "Actuarial Memorandum."
business professional who analyzes probabilities of risk and risk management including calculation of premiums, dividends and other applicable insurance industry standards.
a person who investigates claims and recommends settlement options based on estimates of damage and insurance policies held.
an insurance company licensed to do business in a state(s), domiciled in an alternative state or country.
the social phenomenon whereby persons with a higher than average probability of loss seek greater insurance coverage than those with less risk.
a person or entity that directly, or indirectly, through one or more other persons or entities, controls, is controlled by or is under common control with the insurer.
an individual who sells, services, or negotiates insurance policies either on behalf of a company or independently.
the maximum dollar amount or total amount of coverage payable for a single loss, or multiple losses, during a policy period, or on a single project.
coverage for aircraft (hull) and their contents; aircraft owners' and aircraft manufacturers liability to passengers, airports and other third parties.
an estimate of the claims settlement associated with a particular claim or claims.
an insurance company formed according to the laws of a foreign country. The company must conform to state regulatory standards to legally sell insurance products in that state.
coverages which are generally written with property insurance, e.g., glass, tornado, windstorm and hail; sprinkler and water damage; explosion, riot, and civil commotion; growing crops; flood; rain; and damage from aircraft and vehicle, etc.
also known as open peril, this type of policy covers a broad range of losses. The policy covers risks not explicitly excluded in the policy contract.
an annual report required to be filed with each state in which an insurer does business. This report provides a snapshot of the financial condition of a company and significant events which occurred throughout the reporting year.
an estimate of value.
a binding dispute resolution tactic whereby a conciliator with no interest in the outcome intercedes.
A governmental pool established to write business declined by carriers in the standard insurance market.
an insurer licensed or admitted to do business in a particular state.
coverage that protects against financial loss because of legal liability for motor vehicle related injuries (bodily injury and medical payments) or damage to the property of others caused by accidents arising out of ownership, maintenance or use of a motor vehicle (including recreational vehicles such as motor homes). Commercial is defined as all motor vehicle policies that include vehicles that are used primarily in connection with business, commercial establishments, activity, employment, or activities carried on for gain or profit. No Fault is defined by the state concerned.
Auto Physical Damage
motor vehicle insurance coverage (including collision, vandalism, fire and theft) that insures against material damage to the insured's vehicle. Commercial is defined as all motor vehicle policies that include vehicles that are used in connection with business, commercial establishments, activity, employment, or activities carried on for gain or profit.
Automobile Liability Insurance
coverage for bodily injury and property damage incurred through ownership or operation of a vehicle.
accounting statement showing the financial condition of a company at a particular date.
covers damage to pleasure boats, motors, trailers, boating equipment and personal watercraft as well as bodily injury and property damage liability to others.
physical injury including sickness or disease to a person.
original cost, including capitalized acquisition costs and accumulated depreciation, unamortized premium and discount, deferred origination and commitment fees, direct write-downs, and increase/decrease by adjustment.
an individual who receives commissions from the sale and service of insurance policies. These individuals work on behalf of the customer and are not restricted to selling policies for a specific company but commissions are paid by the company with which the sale was made.
Builders' Risk Policies
typically written on a reporting or completed value form, this coverage insures against loss to buildings in the course of construction. The coverage also includes machinery and equipment used in the course of construction and to materials incidental to construction.
Burglary and Theft
coverage for property taken or destroyed by breaking and entering the insured's premises, burglary or theft, forgery or counterfeiting, fraud, kidnap and ransom, and off-premises exposure.
an individual who sells or services insurance contracts for a specific insurer or fleet of insurers.
an insurance company established by a parent firm for the purpose of insuring the parent's exposures.
a form of liability insurance providing coverage for negligent acts and omissions such as workers compensation, errors and omissions, fidelity, crime, glass, boiler, and various malpractice coverages.
a large magnitude loss with little ability to forecast.
a request made by the insured for insurer remittance of payment due to loss incurred and covered under the policy agreement.
Claims Adjustment Expenses
costs expected to be incurred in connection with the adjustment and recording of accident and health, auto medical and workers' compensation claims.
made Form - A type of liability insurance form that only pays if the both event that causes (triggers)the claim and the actual claim are submitted to the insurance company during the policy term
a method of determining rates for all applicants within a given set of characteristics such as personal demographic and geographic location.
A clause contained in most property insurance policies to encourage policy holders to carry a reasonable amount of insurance. If the insured fails to maintain the amount specified in the clause (Usually at least 80%), the insured shares a higher proportion of the loss. In medical insurance a percentage of each claim that the insured will bear.
a special form of package policy composed of personal automobile and homeowners insurance.
an indication of the profitability of an insurance company, calculated by adding the loss and expense ratios.
date when the organization first became obligated for any insurance risk via the issuance of policies and/or entering into a reinsurance agreement. Same as "effective date" of coverage.
a percentage of premium paid to agents by insurance companies for the sale of policies.
a five-digit identifying number assigned by NAIC, assigned to all insurance companies filing financial data with NAIC.
Comprehensive Personal Liability
comprehensive liability coverage for exposures arising out of the residence premises and activities of individuals and family members. (Non-business liability exposure protection for individuals.)
property loss incurred from two or more perils in which only one loss is covered but both are paid by the insurer due to simultaneous incident.
requirements specified in the insurance contract that must be upheld by the insured to qualify for indemnification.
homeowners insurance sold to condominium owners occupying the described property.
commissioner's directive of action to be completed by an insurer.
coverage protecting the insured against loss or damage to crops from a variety of perils, including but not limited to fire, lightening, loss of revenue, tornado, windstorm, hail, flood, rain, or damage by insects.
Hail Insurance - coverage for crop damage due to hail, fire or lightning.
Date of Issue
date when an insurance company issues a policy.
policy statements regarding the applicant and property covered such as demographic and occupational information, property specifications and expected mileage per year .
Portion of the insured loss (in dollars) paid by the policy holder
Difference In Conditions Insurance
special form of open-peril coverage written in conjunction with basic fire coverage and designed to provide protection against losses not reimbursed under the standard fire forms. Examples are flood and earthquake coverage.
Direct Incurred Loss
loss whereby the proximate cause is equivalent to the insured peril.
Damage to covered real or personal property caused by a covered peril.
an insurance company that sells policies to the insured through salaried representatives or exclusive agents only; reinsurance companies that deal directly with ceding companies instead of using brokers.
Direct Written Premium
total premiums received by an insurance company without any adjustments for the ceding of any portion of these premiums to the Reinsurer.
Directors & Officers Liability
liability coverage protecting directors or officers of a corporation from liability arising out of the performance of their professional duties on behalf of the corporation.
a refund of a portion of the premium paid by the insured from insurer surplus.
an insurance company that is domiciled and licensed in the state in which it sells insurance.
Dwelling Property/Personal Liability
a special form of package policy composed of dwelling fire and/or allied lines, and personal liability insurance.
portion of insured's prepaid premium allocated to the insurance company's loss experience, expenses, and profit year- to -date.
property coverages for losses resulting from a sudden trembling or shaking of the earth, including that caused by volcanic eruption. Excluded are losses resulting from fire, explosion, flood or tidal wave following the covered event.
Earned but not reported - premium amount insurer reasonably expects to receive for which contracts are not yet final and exact amounts are not definite.
date at which an insurance policy goes into force.
an amendment or rider to a policy adjusting the coverages and taking precedence over the general contract.
Errors and Omissions Liability | Professional Liability other than Medical
liability coverage of a professional or quasi professional insured to persons who have incurred bodily injury or property damage, or who have sustained any loss from omissions arising from the performance of services for others, errors in judgment, breaches of duty, or negligent or wrongful acts in business conduct.
Excess and Umbrella Liability
liability coverage of an insured above a specific amount set forth in a basic policy issued by the primary insurer; or a self insurer for losses over a stated amount; or an insured or self insurer for known or unknown gaps in basic coverages or self insured retentions.
Excess of Loss Reinsurance
loss sharing mechanism where an insurer pays all claims up to a specified amount and a reinsurance company pays any claims in excess of stated amount.
risk of possible loss.
Extra Expense Insurance
a type of property insurance for extraordinary expenses related to business interruption such as a back-up generator in case of power failure.
Fair Access to Insurance Requirements - state pools designed to provide insurance to property owners who are unable to obtain property insurance through conventional means.
the amount at which an asset (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale. Quoted market prices in active markets are the best evidence of fair value and shall be used as the basis for the measurement, if available. If a quoted market price is available, the fair value is the product of the number of trading units times market price.
farmowners insurance sold for personal, family or household purposes. This package policy is similar to a homeowners policy, in that it has been developed for farms and ranches and includes both property and liability coverage for personal and business losses. Coverage includes farm dwellings and their contents, barns, stables, other farm structures and farm inland marine, such as mobile equipment and livestock.
Federal Flood Insurance
coverage for qualifying residents and businesses in flood prone regions through the National Flood Insurance Act, a federally subsidized flood insurance program enacted in 1968.
Federal Emergency Management Agency - an independent agency, tasked with responding to, planning for, mitigating and recovery efforts of natural disasters.
insurance companies are required to maintain records and file annual and quarterly financial statements with regulators in accordance with statutory accounting principles (SAP). Statutory rules also govern how insurers should establish reserves for invested assets and claims and the conditions under which they can claim credit for reinsurance ceded.
Financial Responsibility Law
a statute requiring motorists to show capacity to pay for automobile-related losses.
balance sheet and profit and loss statement of an insurance company. This statement is used by the NAIC, and by State Insurance Commissioners to regulate an insurance company according to reserve requirements, assets, and other liabilities.
coverage protecting the insured against the loss to real or personal property from damage caused by the peril of fire or lightning, including business interruption, loss of rents, etc.
Fire Legal Liability
coverage for property loss liability as the result of separate negligent acts and/or omissions of the insured that allows a spreading fire to cause bodily injury or property damage of others. An example is a tenant who, while occupying another party's property, through negligence causes fire damage to the property.
coverage protecting the insured against loss or damage to real or personal property from flood. (Note: If coverage for flood is offered as an additional peril on a property insurance policy, file it under the applicable property insurance filing code.)
an insurance company selling policies in a state other than the state in which they are incorporated or domiciled.
Gramm Leach Bliley Act
(GLBA) - act, repealing Glass-Steagal Act of 1933, allows consolidation of commercial banks, investment institutions and insurance companies. Established a framework of responsibilities of federal and state regulators for these financial industries. It permits financial services companies to merge and engage in a variety of new business activities, including insurance, while attempting to address the regulatory issues raised by such combinations.
the difference between the cost of acquiring the entity and the reporting entity's share of the book value of the acquired entity.
the net premium for insurance plus commissions, operating and miscellaneous commissions. For life insurance, this is the premium including dividends.
funding mechanism employed by states to provide funds to cover policyholder obligations of insolvent reporting entities.
a market characterized by high demand and low supply.
circumstance which tends to increase the probability or severity of a loss.
Harmless Agreement - A risk transfer mechanism whereby one party assumes the liability of another party by contract
a package policy combining real and personal property coverage with personal liability coverage. Coverage applicable to the dwelling, appurtenant structures, unscheduled personal property and additional living expense are typical. Includes mobile homes at a fixed location.
coverage for damage to a vessel or aircraft and affixed items.
Incurred But Not Reported
(Pure IBNR) claims that have occurred but the insurer has not been notified of them at the reporting date. Estimates are established to book these claims. May include losses that have been reported to the reporting entity but have not yet been entered into the claims system or bulk provisions. Bulk provisions are reserves included with other IBNR reserves to reflect deficiencies in known case reserves. IBNR can sometimes include estimates of incurred but Not Enough Reported (IBNER)
paid claims plus amounts held in reserve for those that have been incurred but not yet paid.
sustained losses, paid or not, during a specified time period. Incurred losses are typically found by combining losses paid during the period plus unpaid losses sustained during the time period minus outstanding losses at the beginning of the period incurred in the previous period.
Principle of Indemnity
a general legal principle related to insurance that holds that the individual recovering under an insurance policy should be restored to the approximate financial position he or she was in prior to the loss. Legal principle limiting compensation for damages be equivalent to the losses incurred.
freelance contractor paid a fee for adjusting losses on behalf of companies.
a representative of multiple insurance companies who sells and services policies for records which they own and operate under the American Agency System.
an individual who is not employed for a company but instead works for themselves providing goods or services to clients for a fee.
coverage for property that may be in transit, held by a bailee, at a fixed location, a movable good that is often at different locations (e.g., off road constructions equipment), or scheduled property (e.g., Homeowners Personal Property Floater) including items such as live animals, property with antique or collector's value, etc. This line also includes instrumentalities of transportation and communication, such as bridges, tunnels, piers, wharves, docks, pipelines, power and phone lines, and radio and television towers.
A right or relationship in regard to the subject matter of the insured contract such that the insured can suffer a financial loss from damage, loss or destruction to it. (Bickelhaupt and Magee )
an economic device transferring risk from an individual to a company and reducing the uncertainty of risk via pooling.
Insurance to Value
Amount of insurance purchased vs. the actual replacement cost of the insured property expressed as a ratio.
party(ies) covered by an insurance policy.
an insurer or reinsurer authorized to write property and/or casualty insurance under the laws of any state.
Joint Underwriting Association
(JUA), a loss-sharing mechanism combining several insurance companies to provide extra capacity due to type or size of exposure.
termination of a policy due to failure to pay the required renewal premium.
a certain or probable future sacrifice of economic benefits arising from present obligations of a particular entity to transfer assets or to provide services to other entities in the future as a result of a past transactions(s) or event(s). three essential characteristics: a) It embodies a present duty or responsibility to one or more other entities that entails settlement by probable future transfer or use of assets at a specified or determinable date, on occurrence of a specified event, or on demand; b) The duty or responsibility obligates a particular entity, leaving it little or no discretion to avoid the future sacrifice; and c) The transaction or other event obligating the entity has already happened.
maximum value to be derived from a policy.
Line of Business
classification of business written by insurers.
Lloyd's of London
association offering membership in various syndicates of wealthy individuals organized for the purpose of writing insurance for a particular hazard.
physical damage to property or bodily injury, Including loss of use or loss of income
Loss Adjustment Expense
(LAE)expected payments for costs to be incurred in connection with the adjustment and recording of losses. Can be classified into two broad categories: Defense and Cost Containment (DCC) and Adjusting and Other (AO). Can also be separated into (Allocated Loss Adjustment Expense) and (Unallocated Loss Adjustment Expense for ratemaking purposes.
incidence of claims on a policy during a premium period.
Loss of Use Insurance
policy providing protection against loss of use due to damage or destruction of property.
Loss Payable Clause
coverage for third party mortgagee in case of default on insured property, secured by a loan, that has been lost or damaged.
the percentage of incurred losses to earned premiums.
the amount that insurers set aside to cover claims incurred but not yet paid.
an estimate of liability or provision in an insurer's financial statement, indicating the amount the insurer expects to pay for losses incurred but not yet reported or reported claims that haven't been paid.
Includes claims that have been paid and/or have amounts held in reserve for future payment
Losses Incurred But Not Reported
(IBNR), An estimated amount set aside by the insurance company to pay claims that may have occurred, but for some reason have not yet been reported to the insurance company.
alleged misconduct or negligence in a professional act resulting in loss or injury.
fair value or the price that could be derived from current sale of an asset.
Mechanical Breakdown Insurance
premiums attributable to policies covering repair or replacement service, or indemnification for that service, for the operational or structural failure of property due to defects in materials or workmanship, or normal wear and tear. (May cover motor vehicles, mobile equipment, boats, appliances, electronics, residual structures, etc.)
Homeowners - homeowners insurance sold to owners occupying the described mobile home.
Mobile Homes under Transport
coverage for mobile homes while under transport for personal or commercial use.
personality characteristics that increase probability of losses. For example not taking proper care to protect insured property because the insured knows the insurance company will replace it if it is damaged or stolen.
negligence or disregard on the part of the insured which could lead to probable loss.
a note used to secure a loan for real property.
insurance that indemnifies a lender for loss upon foreclosure if a borrower fails to meet required mortgage payments.
a form of life insurance coverage payable to a third party lender/mortgagee upon the death of the insured/mortgagor for loss of loan payments.
Backed Securities - a type of asset-backed security that is secured by a mortgage or collection of mortgages. These securities must also be grouped in one of the top two ratings as determined by an accredited credit rating agency, and usually pay periodic payments that are similar to coupon payments. Furthermore, the mortgage must have originated from a regulated and authorized financial institution.
Peril Insurance - personal and business property coverage combining several types of property insurance in one policy.
Mutual Insurance Company
a privately held insurer owned by its policyholders, operated as a non-profit that may or may not be incorporated.
the individual defined as the insured in the policy contract. .
Named Peril Coverage
insurance for losses explicitly defined in the policy contract.
National Association of Insurance Commissioners
(NAIC, )the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S.
failure to exercise reasonable consideration resulting in loss or damage to oneself or others.
total revenues from an insurer's operations less total expenses and income taxes
Net Premiums Earned
premiums on property/casualty or health policies that will not have to be returned to the policyholder if the policy is cancelled.
National Flood Insurance Program - flood insurance and floodplain management for personal and business property administered under the National Flood Act of 1968. Encourages participation by private insurers through a flood insurance pool .
insurance company not licensed to do business within a given state.
an accident , including injurious exposure to conditions, which results, during the policy period in bodily injury or property damage neither expected or intended from the standpoint of the insured. (Bickelhaupt and Magee)
homeowners insurance sold to owners occupying the described property.
two or more distinct policies combined into a single contract.
the cause of property damage or personal injury, origin of desire for insurance. "Cause of Loss"
Personal Auto Policy
coverage designed to insure private passenger automobiles and certain types of trucks owned by an individual or husband and wife.
earthquake property coverage for personal, family or household purposes.
separate flood insurance policy sold for personal, family or household purposes.
Personal GAP Insurance
credit insurance that insures the excess of the outstanding indebtedness over the primary property insurance benefits in the event of a total loss to a collateral asset.
Personal Injury Liability
liability coverage for those who have been discriminated against, falsely arrested, illegally detained, libeled, maliciously prosecuted, slandered, suffered from identity theft, mental anguish or alienation of affections, or have had their right of privacy violated.
Personal Injury Protection Coverage
PIP, automobile coverage available in states that have enacted no-fault laws or other auto reparation reform laws for treatment of injuries to the insured and passengers of the insured.
single interest or dual interest credit insurance (where collateral is not a motor vehicle, mobile home, or real estate) that covers perils to goods purchased or used as collateral and that concerns a creditor's interest in the purchased goods or pledged collateral either in whole or in part; or covers perils to goods purchased in connection with an open-end credit transaction.
Pet Insurance Plans
veterinary care plan insurance policy providing care for a pet animal (e.g., dog or cat) of the insured owner in the event of its illness or accident.
a written contract ratifying the legality of an insurance agreement.
time period during which insurance coverage is in effect.
an association organized for the purpose of absorbing losses through a risk-sharing mechanism thereby limiting individual exposures.
insured, or applicant for insurance, who presents likelihood of risk lower than that of the standard applicant.
Money charged for the insurance coverage reflecting expectation of loss.
the portion of premium for which the policy protection or coverage has already been given during the now-expired portion of the policy term.
is the amount calculated on the basis of the interest and mortality table used to calculate the reporting entity's statutory policy reserves.
total premiums generated from all policies (contracts) written by an insurer within a given period of time.
coverage that takes precedence when more than one policy covers the same loss.
Prior Approval Law
a state regulatory requirement for pre-approval of all insurance rates and forms.
Private Passenger Auto
(PPA), filings that include singularly or in any combination coverage such as the following: Auto Liability, Personal Injury Protection (PIP), Medical Payments (MP), Uninsured/Underinsured (UM/UIM); Specified Causes of Loss, Comprehensive, and Collision.
an individual who sells, services, or negotiates insurance policies either on behalf of a company or independently.
Professional Errors and Omissions Liability
coverage available to pay for liability arising out of the performance of professional or business related duties, with coverage being tailored to the needs of the specific profession. Examples include abstracters, accountants, insurance adjusters, architects, engineers, insurance agents and brokers, lawyers, real estate agents, stockbrokers.
coverage protecting the insured against loss or damage to real or personal property from a variety of perils, including but not limited to fire, lightening, business interruption, loss of rents, glass breakage, tornado, windstorm, hail, water damage, explosion, riot, civil commotion, rain, or damage from aircraft or vehicles.
contingencies outlined in an insurance policy.
event covered under insured's policy agreement.
independent claims adjuster representing policyholders instead of insurance companies.
circumstance including possibility of loss or no loss but no possibility of gain.
value of insured losses expressed as a cost per unit of insurance.
a refund of part or all of a premium payment.
a transaction between a primary insurer and another licensed (re) insurer where the reinsurer agrees to cover all or part of the losses and/or loss adjustment expenses of the primary insurer. The assumption is in exchange for a premium. Indemnification is on a proportional or non-proportional basis.
company assuming reinsurance risk.
liability coverage for contents within a renter's residence. Coverage does not include the structure but does include any affixed items provided or changed by the renter.
the cost of replacing property without a reduction for depreciation due to normal wear and tear.
Includes both expected payments for losses relating to insured events that have occurred and have been reported to the insurance company, but not yet paid.
A portion of the premium retained to pay future claims
the domicile location of a member as shown by his or her determination as a resident.
Residual Market Plan
method devised for coverage of greater than average risk individuals who cannot obtain insurance through normal market channels.
a mechanism of internal fund allocation for loss exposure used in place of or as a supplement to risk transfer to an insurance company.
the portion of risk that a reinsurance company cedes or amount of insurance the company chooses not to retain.
an amendment to a policy agreement.
Uncertainty concerning the possibility of loss by a peril for which insurance is pursued.
value recoverable after a loss.
Insurance - type of insurance often used for high frequency low severity risks where risk is not transferred to an insurance company but retained and accounted for internally.
a buyer's market characterized by abundant supply of insurance driving premiums down.
a person who, according to a company's underwriting standards, is considered a normal risk and insurable at standard rates. High or low risk candidates may qualify for extra or discounted rates based on their deviation from the standard.
State of Domicile
the state where a company's home office is located.
Stock Insurance Company
business owned by stockholders.
situation where an insurer, on behalf of the insured, has a legal right to bring a liability suit against a third party who caused losses to the insured. Insurer maintains the right to seek reimbursement for losses incurred by insurer at the fault of a third party.
section of insurance policies giving an insurer the right to take legal action against a third party responsible for a loss to an insured for which a claim has been paid.
events or transactions that occur subsequent to the balance sheet date, but before the issuance of the statutory financial statements and before the date the audited financial statements are issued, or available to be issued.
(impaired risk) risks deemed undesirable due to medical condition or hazardous occupation requiring the use of a waiver, a special policy form, or a higher premium charge.
specialized property or liability coverage available via nonadmitted insurers where coverage is not available through an admitted insurer, licensed to sell that particular coverage in the state.
homeowners insurance sold to tenants occupying the described property.
period of time for which policy is in effect.
person other than the insured or insurer who has incurred losses or is entitled to receive payment due to acts or omissions of the insured.
total money owed or expected to be owed by the insurance company.
premiums, revenue, investment income, and income from other sources.
covers financial loss due to trip cancellation/interruption; lost or damaged baggage; trip or baggage delays; missed connections and/or changes in itinerary; and casualty losses due to rental vehicle damage.
Umbrella and Excess (Personal)
non-business liability protection for individuals above a specific amount set forth in a basic policy issued by the primary insurer; or a self-insurer for losses over a stated amount; or an insured or self-insurer for known or unknown gaps in basic coverages or self-insured retentions.
reinsurance placed with a company not authorized in the reporting company's state of domicile.
Underinsured Motorist Coverage
policy option for bodily injury or property losses caused by a motorist with coverage insufficient to cover total dollar amount of losses. Compensation for the injured party is equal to the difference between the losses incurred and the liability covered by the motorist at fault.
person who identifies, examines and classifies the degree of risk represented by a proposed insured in order to determine whether or not coverage should be provided and, if so, at what rate.
the process by which an insurance company examines risk and determines whether the insurer will accept the risk or not, classifies those accepted and determines the appropriate rate for coverage provided.
amount of premium for which payment has been made by the policyholder but coverage has not yet been provided.
an insurance contract for which the value is agreed upon in advance and is not related to the amount of the insured loss.
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