Insurance can be a complex subject and a key to understanding the various components of insurance is having a basic grasp on the concepts encountered in insurance policies. Below is an alphabetical list of common insurance terms, we hope will be helpful.

  • Agent
    A person employed by insurance company to represent, sell and service products authorized by them. [read more...]
  • Aggregate
    The maximum amount payable under a liability policy during the policy period. [read more...]
  • Arbitration
    Method of settling a disputed claim where each party to the claim selects a competent, impartial arbitrator who then chooses a third competent, impartial arbitrator. [read more...]
  • Assignment of Benefits (AOB)
    Assignment of Benefits is a form signed by an insured which allows a contractor to deal directly with the insurance company on a homeowner or car claim. Its intent is to speed up the claims process for an insured [read more...]
  • Binding Authority
    Binding Authority--permission from an insurance company to an agent to bind company to legal contract while underwriting is being completed. [read more...]
  • Business Continuation Insurance
    Life and/or disability insurance policies written to provide remuneration to beneficiaries in the event a business is confronted with a business owner’s untimely or premature death or disability. [read more...]
  • Business Operating from Residence
    Defined under a homeowner policy to mean a full-time or part-time trade, profession, occupation, or activity engaged in for compensation. Business includes rental of all or any part of an insured location to others, or held for rental by you. [read more...]
  • Cash Value
    A guaranteed amount of cash available upon surrender or cancellation of a whole life insurance policy. It is the amount available before a whole life policy reaches maturity. [read more...]
  • Co-Insurance
    The amount that the insured party pays in event of insurance loss. [read more...]
  • Contingent Liability
    A potential liability that may occur, depending on the outcome of an uncertain future event. [read more...]
  • Contract Law
    When parties enter into an official, signed agreement knowingly without being coerced. [read more...]
  • Coverage Limits
    Coverage limits refer to the limits on what an insurance company will pay out at the time of a loss. [read more...]
  • Dividends
    Amount payable to policyholders of participating whole life insurance, which amount is determined by the favorable experience of the company resulting from excess investment earnings and favorable mortality and expense savings. They are not guaranteed. [read more...]
  • Drive Other Car Coverage
    An endorsement that can be added to your policy to protect you while you are in control of a non owned vehicle. [read more...]
  • Dwelling
    Dwelling--a one, two, three, or four-family residence. Dwelling premise means a dwelling listed in the declarations, including its grounds and private garages. [read more...]
  • Insured
    Under an insurance policy, such as a homeowner policy, it means you the person or entity named as the insured in the policy declarations. [read more...]
  • Liability Insurance Coverage
    Coverage that deals with two areas, the first being bodily injury, or physical injury to a person and any resulting sickness disease, or death. The second area is property damage, or injury to or destruction of tangible property, including loss of use that an individual may become responsible for. [read more...]
  • Life Insurance
    An economic concept designed to replace earning power of the insured entity. [read more...]
  • Material Damage Coverages
    Let’s turn our attention to material damage coverages one can purchase. This provision is broadly covered under collision and comprehensive coverages. Collision coverage is available for repairing damages caused by colliding with another object while comprehensive is to pay for claims generated by any other source of loss. [read more...]
  • Medical Payments Coverage
    A coverage typically included under the liability section of an insurance policy and intended to pay for smaller medical bills an insured may have after a car accident. [read more...]
  • Mortgage Insurance
    Sometimes called mortgage guarantee insurance, mortgage insurance is an insurance policy to cover lenders for losses due to the default on the mortgage loan. [read more...]
  • Peril
    The insurance term for an event that could cause damage to property, items, or belongings of insured, i.e. windstorm, theft, freezing of pipes, breakage of glass, etc. The event must be one time, accidental, and/or unexpected to be covered. [read more...]
  • Reinsurance
    A primary insurance carrier’s tool to spread its risk to another insurance company or companies in order to reduce its risk of potential loss or absorb the volatility of future losses. These behind the scenes companies are referred to as reinsurers. [read more...]
  • Replacment Cost
    Replacement cost or replacement value is to the amount that it would take to replace the insured property at current market costs. [read more...]
  • Theft
    Broad term encompassing many forms of deceitful taking of property including swindling, embezzlement, and false pretenses. [read more...]
  • Tort Law
    A tort is an act or omission resulting in injury or harm to another. [read more...]
  • Tort Laws
    Tort Laws govern situations where one person has harmed or injured another person and generally involve an intrusion by one party into the safety, health, profit, or privacy of the victim. Damages awarded are to [read more...]
  • Uninsured and Underinsured Coverage
    Coverages intended to pay for medical expenses incurred from vehicle injury in excess of dollar amounts provided by the offending party. [read more...]
  • Vehicle Insurance
    The definition of vehicle insurance throughout the website will refer generally to any motorized land vehicle, trailer, or semitrailer designed mostly for travel on public roads. This would exclude motorized vehicles designed for recreational use [read more...]
  • Volcanic Eruption
    Meaning direct loss volcanic eruption, including volcanic blast, airborne shock wave, lava flow and volcanic fallout. [read more...]
  • War (Including Undeclared War, Civil War, Insurrection, Rebellion, Revolution)
    War, including undeclared war, civil war, insurrection, rebellion, revolution--warlike act by military force or military personnel. [read more...]