GLOSSARY OF INSURANCE TERMS:
Actual Cash Value – repayment value for indemnification due to loss or damage of property; in most cases it is replacement cost minus depreciation.
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.
Beneficiary – an individual who may become eligible to receive payment due to will, life insurance policy, retirement plan, annuity, trust or other contract.
Business Interruption – loss of income as a result of property damage to a business facility.
Business Owners Policy – business insurance typically for property, liability and business interruption coverage.
Coinsurance – 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.
Commercial Auto – coverage for motor vehicles owned by a business engaged in commerce that protects the insured against financial loss because of legal liability for motor vehicle related injuries, or damage to the property of others caused by accidents arising out of the ownership, maintenance, use or care-custody & control of a motor vehicle. This includes Commercial Auto Combinations of Business Auto, Garage, Truckers and/or Other Commercial Auto.
Completed Operations Liability – policies covering the liability of contractors, plumbers, electricians, repair shops, and similar firms to persons who have incurred bodily injury or property damage from defective work or operations completed or abandoned by or for the insured, away from the insured’s premises.
Condos – homeowners insurance sold to condominium owners occupying the described property.
Deductible – portion of the insured loss (in dollars) paid by the policy holder.
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.
Disability Income – Long Term – policies that provide a weekly or monthly income benefit for more than five years for individual coverage and more than one year for group coverage for full or partial disability arising from accident and / or sickness.
Disability Income – Short Term – policies that provide a weekly or monthly income benefit for up to five years for individual coverage and up to one year for group coverage for full or partial disability arising from accident and / or sickness.
Effective Date – date at which an insurance policy goes into force.
Employment Practices Liability Coverage – liability insurance for employers providing coverage for wrongful termination, discrimination, or sexual harassment of the insured’s current or former employees.
Farmowners Insurance – 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.
FEMA – Federal Emergency Management Agency – an independent agency, tasked with responding to, planning for, mitigating and recovery efforts of natural disasters.
Fidelity – a bond or policy covering an employer’s loss resulting from an employee’s dishonest act (e.g., loss of cash, securities, valuables, etc.).
Financial Responsibility Law – a statute requiring motorists to show capacity to pay for automobile-related losses.
Homeowners Insurance – 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 expenses are typical. Includes mobile homes at a fixed location.
Long-Term Care – policies that provide coverage for not less than one year for diagnostic, preventative, therapeutic, rehabilitative, maintenance, or personal care services provided in a setting other than an acute care unit of a hospital, including policies that provide benefits for cognitive impairment or loss of functional capacity. This includes policies providing only nursing home care, home health care, community based care or any combination. The policy does not include coverage provided under comprehensive / major medical policies, Medicare Advantage, or for accelerated health benefit-type products.
Long-Term Disability Income Insurance – policy provided monthly income payments for insureds who become disabled for an extensive length of time, typically two years or longer.
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.).
Medical Malpractice – insurance coverage protecting a licensed health care provider or health care facility against legal liability resulting from the death or injury of any person due to the insured’s misconduct, negligence, or incompetence, in rendering or failure to render professional services.
Ocean Marine – coverage for ocean and inland water transportation exposures; goods or cargoes; ships or hulls; earnings; and liability.
Personal Auto Policy – coverage designed to insure private passenger automobiles and certain types of trucks owned by an individual or husband and wife.
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.