Glossary of Insurance Words and Phrases

Learn to speak insurance-ese like a professional!

You would think that a complicated industry like insurance would create standardization. Well they have, sort of.  However the definition that you must be sure of is the one defined in your insurance policy.  The definitions differ from insurer to insurer so you must look carefully at your policy.  You will find in our glossary the most common definitions of the words, acronyms, and phrases that we use and see.  We encourage our partner insurers to share their definitions with us to be included in our glossary.  You may note that many insurance terms are not included in this glossary.  It is because we do not address terms for products we do not sell.  Please keep in mind that these are not to be considered legal or contractual definitions.  This page is only a resource for speaking insurance-ese with insurance professionals.  Like any language, insurance-ese has dialects and therefore you may not always be understood by insurance people when using the terms on this page.

Before you get to looking at our glossary, though, you may find this video of common insurance terms helpful. If the term you're looking for isn't here, don't hesitate to explore further down our page.

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Acronyms

Actual Cash Value - Cost of replacing damaged or destroyed property with comparable new property, minus depreciation.

Actuary - A specialist in the mathematics of insurance who calculates rates, reserves, dividends and other statistics. We hear they are great fun at parties.

Adjustable Rate - An interest rate that changes, based on changes in a published market-rate index according to rules laid out in the policy, usually annuities.

Adjuster - A representative of the insurer who seeks to determine the extent of the insurer's liability for loss when a claim is submitted.  This person is often referred to as a Claims Adjuster.

Agent - individual who sells and services insurance policies while representing an insurer.  Agents are said to be captive, held prisoner by signing an exclusive contract so that they may only represent one insurance company or family of companies.  At DRickard Insurance we are forced to only offer one choice for insurance products.  In fact we often have many choices for each product we sell.  Because of this we are better equipped to match our customers and insurers together creating long lasting happy relationships.  Does that make us the match maker of the insurance business?  Contact us and find out 607 843 8860  or insurance@drickardinsurance.com.

Aggregate Limit - Usually refers to liability insurance and indicates the most that the insurance company will pay under the contract for a specific period of time, per project, life of the contract, or whatever conditions are selected in the insurance policy, no matter how many separate occurrences might occur.

Annuitization - Process by which you convert part or all of the money in an annuity into a stream of regular income payments. Once you do this you no longer have rights to the total sum of money you have built up in the annuity contract.

Annuity - An insured agreement to grow wealth for the insured that includes a clause requiring the insurer make periodic payments that continue during a specified period or the annuitant's lifetime.

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Benefit Period - For Disability Insurance this is usually considered the length of time a claimant may be entitled to a benefit, after an elimination period.

Bodily Injury - (BI) - Is what is seems to be, damage to a person's body, such as a physical injury. It is not damage or damages that are not physical, these are Personal Injuries.

Broker - Insurance professional that represents clients to insurance companies. In some cases DRickard Insurance acts as an Insurance Broker. By being both an insurance agency and brokerage we are able to offer a larger assortment of insurance products to our customers. I think you should contact us to see how we may best help you. 607 843 8860 or insurance@drickardinsurance.com.

Broker Fee - Is a fee that the broker or brokerage charges for transacting business on your behalf. The law, and ethical standards, require that notice of the fee is provided in writing in an agreement for the insured to sign in advance of the sale of an insurance product.

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Casualty - This is often used as a term interchangeable with liability. Liability insurance is used to protect an insured from unintentional injury to a person or damage to other peoples property. Over the years liability coverage may also be purchased to cover indirect losses caused and even Personal Injuries.

Claim - A demand made by the insured, or the insured's beneficiary, for payment of the benefits as provided by an insurance contract. Or, this may be a demand for recovery from a third party in the event of liability claims.

CGL - Commercial General Liability is a type of liability most frequently purchased for businesses. However, this there are many more causes of liability losses than are covered by this form. Please contact DRickard Insurance to have a customized insurance policy designed for you. 607 843 8860 or insurance@drickardinsurance.com

CSL - Combined Single Limit is an auto insurance term that refers to combining the per person limit, per accident limit and property damage limit of coverage into one amount. It sounds like it makes life simple, right? Not so fast. It is possible that you have taken valuable coverage away from a category that you would rather not have. Let us design a policy that fits you 607 843 8860 or insurance@drickardinsurance.com.

Coinsurance - In property insurance, this clause requires the policyholder to carry insurance equal to a specified percentage of the value of property to receive full payment on a loss.

Collision Insurance - Pays to repair damage to your car when you hit, or are hit by, another vehicle or object, regardless of who’s at fault.

Commercial Lines - Insurance for businesses, professionals and commercial interests.

Commission - Is a way, in part that insurance professionals are compensated for the process of selling insurance products.

Comprehensive Insurance - Insurance that pays to repair damage to your car that’s caused by something other than a collision, such as fire, theft, vandalism, hail or flooding. It also pays for damage to your vehicle caused by hitting an animal. When you buy collision and comprehensive, you choose a deductible, typically $500. This is the amount you pay to the repair shop. The insurance pays the rest of eligible repair expenses. If you have a loan secured by your vehicle you will be required to have this coverage.

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DBL - See NYS DBL.

Death Benefit - The amount that will be paid to beneficiaries when a covered insured dies due to a covered cause of loss.

Deductible - Amount of loss that the insured pays before the insurance begins to pay.

Dividend - The amount of premium returned to a member of a safety group.

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Earned Premium - Is non refundable premium dollars due to insurer rules and the period of time the insurance policy was in force.

Elimination Period - The time which must pass after an occurrence starts before policyholder can collect insurance benefits. Flood policies may have a period of no coverage after the start of the policy in some cases. Everyone is in a flood zone, it is better to buy your flood insurance now to avoid this issue. 607 843 8860 or insurance@drickardinsurance.com.

Environmental Pollution Liability Coverage - Insurance coverage for bodily injury, property damage, and remediation expenses arising out of the release of contaminants into the environment.

EPLI - Employment Practices Liability Insurance - EPLI provides protection for an employer and its employees against claims made by current, former or potential employees for actual or alleged discrimination (age, sex, race, disability, etc.), wrongful termination, sexual harassment, and other employment-related allegations.

Exclusions - Perils or conditions that are not covered by the insurance contract.

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Floater - A separate insurance form available to add to a base policy to cover items and conditions beyond the base insurance contract. Or, a terms or condition adjustment to the base policy it is attached to.

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Glass - Seems self explanatory. However, many policy have a great deal of special terms when dealing with coverage for glass. So, pay attention to the glass coverage or lack there of in your policies. For instance we strongly encourage Full Glass coverage when available on auto insurance policies. Coverage for Glass is an option in car insurance policies and should not be considered a given that you have the coverage. Also, most commercial policies need you to spell out how much glass coverage you need in order for your large windows to be covered. Some lease agreements require the lessor to insure the glass in the rented space. Contact us for more on this subject 607 843 8860 or insurance@drickardinsurance.com.

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Hazard - A condition that increases then probability of a loss or increases the severity of a loss. A meth lab in the house increase the likelihood of fire.

Hurricane Deductible - Amount you must pay out-of-pocket before your policy will pay for wind and other damage caused by a hurricane.

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Inflation Protection - An optional property endorsement that increases the policy's limits of insurance during the policy term to keep pace with inflation. This is not a guarantee it will. Often the inflation guard options chosen will out pace the rate of inflation. You need to watch your insurance coverage amounts closely.

Insurable Interest - Risk of loss due to ownership or permitted use of property. Or exposure to lawsuit because of relationship to property.

Insurance Adjuster - A representative of the insurer who seeks to determine the extent of the insurer's liability for loss when a claim is submitted. Independent insurance adjusters are hired by insurance companies on an "as needed" basis and might work for several insurance companies at the same time. Independent adjusters charge insurance companies both by the hour and by miles traveled. Public adjusters work for the insured in the settlement of claims and receive a percentage of the claim as their fee. A.M. Best's Directory of Recommended Insurance Attorneys and Adjusters lists independent adjusters only.

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Jay - The name of a person. This has nothing to do with insurance. I needed a J word.

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Kelvin - The Kelvin Scale is used to measure temperature and is needed information for smelting operations.

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Liability - Describes situations that you are responsible for.

Liability Insurance - Is good to have when you may be, or are, responsible for losses to others. Not only do these policies provide coverage for the loss they, in most cases, provide a duty to defend you from a claim of loss. However insurers reserve the right to settle a claim rather than defend against it.

Licensed - Indicates the company, or individual is licensed or admitted to do business in the state that provides them the license. Not every state will accept the insurance you have and not every insurer will cover you every where you go. It is best to know before you go, or send your employee.

Loss Control - Ways of practicing risk avoidance.

Loss of Rents - Insurance coverage for loss of income due to a covered cause of loss to your income property while your building is being repaired or replaced. This is extremely important to income property owners frequently referred to as landlords. Their mortgage will not stop during the repair replace process. They need continued cash flow. What if you occupy the building also? You need Loss of Use coverage.

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Mortgage Insurance Policy - Life insurance designed to cover the mortgage in the event of the death of the insured. The policy death benefit decreases over time till it is gone. This is a form of term insurance. Generally inexpensive.

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Named Perils - Perils named specifically as covered on insured property. Perils may also be specifically excluded read your policy carefully. For help understanding your policy you may consult with us 607 843 8860 or insurance@drickardinsurance.com.

Nonstandard Auto - Many consider this to be high risk drivers that must be insured in an assigned risk policy. However, we do not usually find a need to send drivers to the assigned risk pool. What can we do for you? 607 843 8860 or insurance@drickardinsurance.com.

NYS DBL - New York is one of a handful of states that require employers to provide disability benefits to their employees for an off the job injury or illness. This is the insurance that complies with that law. NOTE: some insurers provide benefits for owners and employees that go above and beyond the state minimal requirement. The cost for this additional coverage is often surprisingly low. 607 843 8860 or insurance@drickardinsurance.com.

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Occurrence - An event that results in an insured loss. In some lines of business, such as liability, an occurrence is distinguished from accident in that the loss doesn't have to be sudden and fortuitous and can result from continuous or repeated exposure which results in bodily injury or property damage neither expected not intended by the insured.

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Peril - The cause of a possible loss.

Personal Injury - (PI) - A non-physical injury that occurs due to wrongful eviction, slander, false arrest, wrongful entry, wrongful imprisonment, violating the right to privacy, etc. Cyber injuries, like bullying fall into this category. Really, since we all may be sued for just about anything all persons and businesses should look into getting this coverage. 607 843 8860 or insurance@drickardinsurance.com. These are different from Bodily Injuries.

Personal Lines - (PL) - Insurance for individuals and families, such as private-passenger auto, boat, snowmobile, motorcycle and homeowners insurance.

PIF - stands for Pay In Full in the insurance world. Sometimes PIF results in discounts that may be in the hundreds of dollars. Other times you may use your willingness to PIF as a way to get a better tier of product that you would not have been otherwise eligible for. Since most companies charge installment fees for breaking your policy premium into payments, you will save those fees by PIF. Imagine this, saving installment fees of around $5 per month and getting a discount for PIF. It doesn't take long for this one strategy to save you money. Give us a call 607 843 8860 or email us insurance@drickardinsurance.com to see how we can help you to apply this saving strategy.

PIP - Personal Injury Protection - Provides payment for medical bills and—in some states—other living expenses while you heal if you’re unable to work as a result of an accident, no matter who’s at fault.

Policy - A written contract effecting insurance, or the certificate thereof, by whatever name called, and including all clause, riders, endorsements, and papers attached thereto and made a part thereof.

Premium - The price of insurance protection for a specified risk for a specified period of time.

Q           A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Question Everything - The more you know about how your insurance works the better consumer you will be. What do you want your insurance to do for you? Is it? Your needs change over time, has your insurance kept up? For help through this process you may consult with us 607 843 8860 or insurance@drickardinsurance.com.

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Renewal - Insurance policies that continue from one term to the next are said to be renewing. Not all policies automatically renew. In some cases you must go through new underwriting for your policy to continue. It is best to know what type of policy you are buying. 607 843 8860 or insurance@drickardinsurance.com.

Rental Reimbursement - pays for your rental auto while your auto is being repaired as part of a comprehensive or collision claim. Not to be confused with Loss of Rents coverage.

Replacement Cost - The dollar amount needed to replace property without deducting for depreciation.

Risk Management - Involves identifying risk then avoiding the risk, retaining the risk, reducing the risk, or transferring the risk, usually by insurance.

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Subrogation - The right of an insurer to pursue remedies against a third party cover payment of loss to the insured. Successful subrogation may result in the insured's return of deductible paid.

Surrender Charge - Fee charged to a policyholder when a life insurance policy or annuity is surrendered for its cash value. These fees generally decrease over time, yet another good reason not to hastily cash in your life insurance policy. Taxation is another reason not to cash in life insurance.

T           A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Term Life Insurance - Life insurance that provides protection for a specified period of time. These policies are often the cheapest life insurance policies you may buy. However, they do not build cash values, so if you miss premiums your policy will likely lapse.

U          A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Umbrella Policy - No, this policy does not cover physical damage losses to umbrellas. It is a form of Liability Insurance that pays eligible losses above the limit of an underlying policy or policies. Most of these policies are called following form, they only pay for losses that are considered eligible on the underlying policies. Some exceptions apply. For more details on the policy correct for you contact us 607 843 8860 or insurance@drickardinsurance.com.

Underwriter - Generally the person who evaluates risks and determines eligibility for insurance for an insurer. Insurance agents are said to be field underwriters.

Unearned Premiums - That part of the premium that may be returned to the insured at the expiration or termination of a policy.

Uninsured Motorist Coverage - A policy provision on an automobile policy that covers an insured when a driver who does not have liability insurance is at fault for an accident they have with them. Many times our insured are better covered than may other drivers that may crash into them. We encourage you not to insure the other guy better than you insure yourself. For further explanation contact us 607 843 8860 or insurance@drickardinsurance.com.

Universal Life Insurance - A blend between term and whole life insurance concepts.

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Variable Life Insurance - It sound like maybe you have it, maybe you don't. However, it is a form of life insurance tied closely to the markets and there is a lot of variables effecting how it will perform. I feel you should buy life insurance when you want life insurance, and investments for investing.

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Waiver of Premium - A provision in some insurance contracts which enables an insurance company to waive the collection of premiums while keeping the policy in force if the policyholder becomes unable to work because of an accident or injury. The waiver of premium for disability remains in effect as long as the ensured is disabled. There is often a waiting period before this provision begins paying.

Whole Life Insurance - Life insurance which might be kept in force for a person's whole life or the period of time determined in the contract, often to age 100.

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Zebras - are black and white horse like animals that come from Africa. While this really does not have anything to do with insurance, unless you need to insure one, I just thought it funny to have an item in Z.