Definition: Premium is an amount paid periodically to the insurer by the insured Description: In an insurance contract, the risk is transferred from the insured to. Insurable Interest definition - What is meant by the term Insurable Interest Govt to set up panel to look into tax issues faced by startups . Therefore, insurable interest is often related to ownership, relationship by law or blood and possession. A risk that conforms to the norms and specifications of the insurance policy in. The definitions in this glossary are developed by the NAIC Research and Actuarial .. coverage provided to or offered to borrowers in connection with a consumer credit Date of Issue - date when an insurance company issues a policy.
The ages below and above which the company will not accept applicants. An organization which solicits insurance for one or more carriers and may perform other functions such as issuing policies and adjusting losses. An individual who solicits insurance for one or more carriers and may perform other functions, such as issuing policies. Agents of a direct writer are sales employees of one company only. A term used to classify cars according to age for rating purposes.
Insurance policy written for a term of one year. A contract in which the buyer deposits money with a life insurance company for investment. The contract provides for specific payments to be made at regular intervals for a fixed period or for life. The person during whose life an annuity is payable, usually the person to receive the annuity.
A request to a company for a policy. The application is a conditional offer to buy. If the medical examination and the inspection are in order, the company usually will accept the offer. It may be the policy named in the application or, if the applicant is substandard, it may be on a higher premium or other policy form.
Determination of the value of property or the extent of damage by impartial experts. In fire insurance, usually means that the construction, equipment, preventive and protective devices meet established requirements for insurance.
The willful and malicious burning of property, sometimes with the intent of defrauding an insurance company. All of the property owned by a carrier.
One to whom the legal ownership of a policy or a limited interest therein is transferred. The partial or complete transfer by a person of his right or interest in a policy to another person.
The ability of a person to so assign the policy may be limited by law or individual circumstances. An assignment must be written, signed by the owner-policyholder whose interest is being transferred, properly attested, and the original or a certified copy must be filed with the insuring company.
A valid assignment so filed is binding on the company. These terms are today generally accepted as synonymous, although not originally so. The person named in the policy, to whom the insurance money is paid at the death of the insured. A written or oral contract issued temporarily to place insurance in force when itis not possible to issue a new policy or endorse the existing policy immediately.
A binder is subject to the premium and all the terms of the policy to be issued.
Also called uninsured motorist coverage. A policy affording more liberal benefits, or in fire insurance, an endorsement that grants broader or additional coverages to a basic policy; usually added to a standard fire and extended coverage policy. For example, on a dwelling policy, itusually adds the following: If added to a commercial fire policy, it might include vandalism, fallingobjects, weight of ice, snow or sleet, and collapse. A representative of the insured in placing insurance with companies.
He is paid a commission by the company or its agent. Insurance against loss resulting from damage tobuildings and to materials incidental to construction, including machinery and equipment, while the buildings are under construction.
Breaking and entering into the premises of another for the purpose of stealing with visible signs of forced entry. Business insurance protects a business against the loss of its valuable lives or key men; stabilizes the business through the establishment of better credit relations; and provides a practical plan for the retirement of business interest in the event of the death of one of the owners.
A policy which may be canceled by the company at any time by giving advance notice to the insured and refunding any unearned premium. The discontinuance of an insurance policy before its normal expiration date. A term in accident insurance to describe the amount payable for death or for loss of hands, feet or sight.
Also called principal sum. The insurance company or the one who agrees to pay the losses. The carrier may be organized as a company, either stock, mutual, or reciprocal, or as an association of underwriters such as Lloyds. The amount available in cash upon surrender of a life insurance policy before it matures as a death claim or otherwise. A general class of insurance covering liability resulting from accidents and some types of property insurance.
It includes among other coverages: It excludes life, fire and marine insurance, but, as ordinarily used, includes health insurance and fidelity and surety bonds. This is a form of insurance written on an excess of loss basis in order to improve the spread of risk against unknown concentrations of liability subject to one occurrence.
A deductible is chosen at the amount necessary to reduce the probable frequency of loss to an acceptable level to the reinsurer, and severity of loss to alevel acceptable to the reinsured company. A designation conferred in recognition of the attainment of certain standards of education and proficiency in the art and science oflife insurance underwriting. A designation conferred in recognition of the attainment of certain standards of education and proficiency in the art and science of fire and casualty insurance underwriting.
A request for payment of a loss which may come under the terms of an insurance contract. There are two types of claims. First party claim is one made by the policyholder in which the policyholder reports the claim directly to his company. A third party claim isone in which a person makes a claim against a policyholder of another company and payment, if any, is made by that company.
One who makes a claim. The average cost per claim considering all claims under a certain coverage for a specified period. Claims-made insurance is a type of liability protection that covers current legal obligations result for acts of the insured. It provides coverage to the insured for claims reported during the term of the policy.
An insurance provision for property coverages in which the policy holder must carry an amount of insurance that is at least equal to a set percentage of the value of the property in order to receive full payment of a loss. Bodily Injury and Property Damage coverage expressed as one single amount of coverage.
This coverage insures all property not occupied as a residence, excluding farming and manufacturing, against loss by fire.
In life insurance, this clause is designed to alleviate the hardship that can result if the insured and primary beneficiary die at the same time or within a short period of time of each other. Pays for damage to or loss of your automobile from causes other than accidents. These include hail, vandalism, flood, fire, and theft. The purpose of compulsory insurance laws is to require all residents to buy liability insurance before auto license plates are issued.
The law requires proof of financial responsibility insurance when license plates are issued. The withholding of material facts from an insurer, either in applying for apolicy or making a claim. A term used to refer to the personal property contained in a building. It maybe household furniture, personal effects, or other types of personal property, movable in nature and not firmly affixed to the real property.
A beneficiary whose right to receive depends upon the occurrence of a certain contingency — for example, the right to receive certain benefits only in the event that another named beneficiary dies prior to the time of payment.
In most cases, an insurance policy. A policy is considered to be a contract between the insurance company and the policyholder. Carelessness of the injured person that helped to cause the accident in which he was injured. Another term for insurance. Can be used to mean either the dollar amounts of insurance purchased ex: In a technical sense, damages refer to the money or compensation recoverable in a lawsuit by a party who has been injured in person or property or rights by the negligence of another.
Amount paid to the beneficiary upon the death of the insured. When filed with the company, the company is said to have received a death claim. The page in a policy that shows the name and address of the insurer, the period of time a policy is in force, the amount of the premium, and the amount of coverage. Term insurance on which the face value slowly decreases in scheduled steps from the date the policy comes into force to the date the policy expires, while the premium remains level.
The intervals between decreases are usually monthly or annually. The amount an insured person must pay before the insurance company pays the remainder of each covered loss, up to the policy limits. An annuity under which the annuity payment period is scheduled to begin at some future date. A decrease in the value of property over a period of time due to wear and tear or obsolescence. Depreciation is used to determine the actual cash value of property at time of loss.
A loss where an insured peril is the proximate cause. If a windstorm blows the roof off a home, the windstorm is the insured peril causing the direct loss or damage.
A benefit provision forming part of a life insurance policy providing for certain benefits in the event of total and permanent disability from accident or sickness. A return to the policyholder of excess premium over losses and expenses at the end of the policy period. Dividends are authorized by the board of directors, and are payable to all participating policyholders of a specified class. An insurance company organized in a given state is referred to in that state as a domestic carrier.
Payment of twice the basic benefit in the event of loss resulting from specified causes or under specified circumstances. With a one-year policy, half of the total premium has been earned after six months. The date on which an insurance binder or policy goes into effect.
A written agreement attached to a policy expanding or limiting the benefits otherwise payable under the policy. A property insurance coverage for equipment that is ofte nmoved from place to place.
A preliminary premium amount that could be adjusted based on a variance in exposures. To qualify for a particular policy at a particular price, companies have the right to ask for information about health and lifestyle. An insurance company will use this information — the evidence of insurability — in deciding if your application for insurance is acceptable and at what premium rate. Coverage that is provided by insurers not licensed in states where the risk is located. A policy that provides additional limits in excess of an underlying liability policy.
Items or conditions that are not covered by the general insurance contract. The specified date and time at which the policy terminates. Measure of vulnerability to loss, usually expressed in dollars or units.
An extension of the fire policy to cover the additional perils of windstorm, hail, explosion, or riot, attending a strike, civil commotion, aircraft, vehicle and smoke. The amount covered by the terms of an insurance contract, usually found on the first page of the policy. The automobile policy most common in the industry which provides protection for all members of the family.
These include, but are not limited to: A claim filed by an insured against his or her own insurance policy. A death benefit, the dollar amount of which does not vary. The full cancellation of a policy as of the effective date of coverage, which requires the return of paid premium in full. A type of insurance policy that covers property that is easily movable and provides additional coverage over what normal insurance policies do not. This can cover anything from jewelery to expensive stereo equipment.
A provision in most all property insurance policies eliminating coverage for damage by flood and possibly other types of water damage, such as seepage and sewer backup. Individual life or health insurance policies issued to a small group of people having a common affiliation or interest. Same as wholesale insurance. Trial period required in most states where policy owners have up to 20 daysto examine their new policies with no obligation.
Insurance which covers all losses, with no deductions, up to the amount of the insurance. Insurance that pays the difference between the actual cash value of a vehicle and the amount still to be paid on the loan. Some gap policies may also cover the amount of the deductible. Insurance coverage for the legal liability of automobile dealers, garages, repair shops and service stations for bodily injury and property damage arising out of their business operations.
A broad term meaning liability insurance, other than automobile, written to cover personal, professional and commercial risks. Period of time after the due date of a premium during which the policy remains in full force without penalty. Willful and wanton misconduct. The weight specified by a manufacturer for the maximum total loaded weight of a single vehicle. Several insurance companies under common ownership and often common management. A circumstance that increases the likelihood or probable severity of a loss.
For example, the storing of explosives in a home basement is a hazard that increases the probability of an explosion.
What is the Date of Issue? - Definition from Insuranceopedia
Managed care plans that provides healthcare services to their members through networks of doctors, hospitals, and other healthcare providers. HMOs cover a wide variety of services, usually at a lower cost than traditional health care plans. A contractual agreement that requires one contracting party to assume certain legal liabilities of the other party. In health insurance, individuals who can reasonably be expected to have an above-average number of claims due to medical history or physical impairment.
Most impaired risks can be insured by use of a waiver or waiting period. Restoration to the victim of a loss by payment, repair or replacement. A claims adjuster who provides adjustment services to insurance companies for a fee but is not employed by them. The printed form which serves as the contract between an insurer and an insured. The person or organization covered by an insurance policy.
The party that provides insurance coverage, typically through a contract of insurance. A named beneficiary whose rights to life insurance policy proceeds are vested and cannot be canceled by the policy owner unless the beneficiary consents. Life insurance policies written on the lives of children within specified age limits. Insurance used for a business purpose, usually to reimburse a corporation for the loss it sustains when an important member of the firm dies.
The termination or discontinuance of a policy due to non-payment of a premium. An auto insurance coverage that pays for injuries to the otherparty and damages to the other vehicle resulting from an accident the policyholder caused.
Covers losses for which an insured is legally liable. Certification, issued by the department of insurance,that an individual is qualified to solicit insurance applications for the period covered. Certification, issued by the department of insurance, stating that an insurance company is qualified to do business in the state. The average number of years a person is expected to live, based on anational average per age group and other factors.
Insurance coverage that pays out a set amount of money to specified beneficiaries upon the death of the individual who is insured. Insurance policies are sold without the policyholder even seeing a copy of the contract. This doctrine has been controversial, with some courts adopting it and others explicitly rejecting it. Insurance contracts are unilateral, meaning that only the insurer makes legally enforceable promises in the contract.
The insured is not required to pay the premiums, but the insurer is required to pay the benefits under the contract if the insured has paid the premiums and met certain other basic provisions. In the United Statesthe insured can sue an insurer in tort for acting in bad faith. Structure[ edit ] Insurance contracts were traditionally written on the basis of every single type of risk where risks were defined extremely narrowlyand a separate premium was calculated and charged for each.
Only those individual risks expressly described or "scheduled" in the policy were covered; hence, those policies are now described as "individual" or "schedule" policies. For example, inan insurance industry spokesman noted that a bakery would have to buy a separate policy for each of the following risks: Insurers have been criticized in some quarters for the development of complex policies with layers of interactions between coverage clauses, conditions, exclusions, and exceptions to exclusions.
In a case interpreting one ancestor of the modern "products-completed operations hazard" clause,  the Supreme Court of California complained: Unfortunately the insurance industry has become addicted to the practice of building into policies one condition or exception upon another in the shape of a linguistic Tower of Babel.
We join other courts in decrying a trend which both plunges the insured into a state of uncertainty and burdens the judiciary with the task of resolving it. We reiterate our plea for clarity and simplicity in policies that fulfill so important a public service.
Definitions - Defines important terms used in the rest of the policy. This is where the insurance company makes one or more express promises to indemnify the insured. Conditions - These are specific provisions, rules of conduct, duties, and obligations which the insured must comply with in order for coverage to incept, or must remain in compliance with in order to keep coverage in effect.
If policy conditions are not met, the insurer can deny the claim. When multiple coverage forms are packaged into a single policy, the declarations will state as much, and then there may be additional declarations specific to each coverage form.
Traditionally, policy forms have been so rigidly standardized that they have no blank spaces to be filled in. Instead, they always expressly refer to terms or amounts stated in the declarations.