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Definition
| One party's agreement to the purchase offer of another party, such that a legal contract is formed and both parties are contractually bound. With an insurance contract, acceptance generally takes place when the agent binds coverage of the policy is issued. |
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| The relinquishment or surrender of all rights and interest in an insured property to the insurance company. Not permitted under most property contracts. |
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| A sudden and unexpected event that results in a financial loss |
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| Accident or event resulting from natural causes, without any human intervention, that reasonable foresight or care could not have prevented, such as flood, lightning, earthquake or storms |
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| The replacement (current) cost of an item minus depreciation from wear and tear or obsolescence. |
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| A mathematician who specializes in the field of insurance. The actuary determines, on the basis of existing experience, the rate to be charged for various lines of insurance and reserves to be set aside for payment of losses. |
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| An individual or business, other than the names insured on the declarations page, who has a financial interest requiring protection under the terms of the contract, e.g., the lienholder on the loan for a car or a bank for a mortgage. |
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Term
| additional living expense insurance |
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Definition
| This is insurance coverage that pays for extra necessary living costs incurred during the time it takes to repair or replace insured property that has been damaged or destroyed by an insured peril. |
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Definition
| The salaried employee of an insurance company, or an independent contractor representing an insurance company, who is responsible for determining the cause and amount of a loss, the insurance company's liability for the loss and satisfactory agreement on such from the parties involved (insured and insurer). |
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| An insurer that meets the licensing criteria of the state it wishes to do business in and has received a certificate of authority. Also known as an authorized company. |
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| The tendency of insureds who present a higher probability of loss to purchase or renew insurance more often than those who present a lower probability; selection against the best interests of the insurance company. |
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| The legal principle that allows an individual or organization to represent another individual or organization. |
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| A person licensed by the state insurance authority to sell insurance products. The agent represents the insurance company in all transactions. |
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| The maximum limit of liability the company is obligated to pay for all claims within a specific time period, usually one policy per year. |
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| This is an option for property policies by which the insured and the company agree to or stipulate to the value of property. Suspends the coinsurance clause. |
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| This provides coverage for direct loss or damage to aircraft. |
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| A kind of contract in which one party may obtain greater value under the agreement than the other party and in which payment depends upon a fortuitous event. An insurance contract is an aleatory contract. |
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| An insurance company incorporated and organized under the laws of a foreign nation, state, province or territory, rather than under the laws of the United States. |
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| These are lines of insurance generally related to property insurance, such as sprinkler leakage, glass, water damage, and earthquake coverage. |
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| An insurance company's yearly financial report required by various state insurance departments. Covers the calendar year period and is made according to a form agreed upon by the National Association of Insurance Commissioners. |
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Definition
| The authority the general public assumes an agent has due to his actions, regardless of whether the authority has been given to the agent by law or contract. |
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| A type of court bond that guarantees that payment of court costs and judgments on appeal when a defendant loses a suit and appeals the case. |
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| The questionnaire completed by a prospect or insurance professional that will be used during the underwriting of the policy. For contractual purposes, the application is considered the offer to purchase. |
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Definition
| An estimate of the value of, or the amount of loss or damage to, insured property. |
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| The provision in an insurance policy that sets forth the duties of the insured and the insurer when there is a dispute over the amount of loss. For example, a fire insurance policy provides for appraisal at the demand of either party after a loss. |
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Term
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Definition
| The process of settling differences relating to loss under an insurance policy between the insured and the insurer. Each party selects a representative who in turn selects a disinterested arbitrator whose decision or award is binding upon both parties to the insurance contract. |
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Term
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Definition
| A felonious and deliberate act of burning property. |
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Term
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Definition
| An additional fixed charge or proportionate share of claims expenses sometimes levied against policy owners by an assessment mutual insurance company when premiums are insufficient to meet its costs of operations. |
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Term
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Definition
| An non insurable individual or company that is assigned an insurance company from a pool of insurers (usually all that hold certificates of authority in a specific state). Although the company must accept the risk, it may charge an appropriate premium. |
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Definition
| The legal transfer of a policy owner's rights or interests in an insurance policy to another party. The insured requests the assignment, and, barring state law, the company can either accept or reject the request. |
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| The acceptance of risk presented to an insured, including full responsibility for any loss that may occur. |
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| Person for whom insurance is provided. |
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| The legal process that prevents the removal of property belonging to another party pending a court's decision concerning that property. |
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Definition
| A person empowered to act for another party; the chief administrative officer of a reciprocal insurance exchange who is given authority to act on the organization's behalf; also, a person authorized to execute a surety bond on behalf of an insurance company. |
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Definition
| Something that, although normally harmless, may nevertheless attract those who do not understand its uses and may cause injury. Typically this doctrine applies to children who may be attracted to things such as swimming pools or animals that can cause them harm. |
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Definition
| A premium adjusted at the end of the policy term to compensate for additional exposures. Audited contracts typically include liability and workers' compensation. |
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| A policy that provides coverage for owned and non owned vehicles, including liability, damage to the auto, medical payments and uninsured motorists coverage. |
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Term
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| A common term for coverage provided automatically in property and liability policies (generally for a limited amount of time) for newly acquired property and changing interests and values. |
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