Actual Cash Value (ACV)
Cash Value" is the replacement cost of property damaged or
destroyed at the time of loss, with deduction for
depreciation. Actual cash value cannot exceed the applicable
limit of liability shown in the declarations of the policy,
nor the amount it would cost to repair or replace such
property with material of like kind and quality within a
reasonable amount of time after a loss.
The person who handles the settlement of
claims on behalf of an insurance company, either as an
employee of the company or an independent engaged by
contract. Also called a claims representative.
The representative of an insurance company
responsible for selling and servicing policies. Can be an
employee representing only one company (sometimes called a
"captive agent" or a "direct writer" or an "independent
agent" who, through contractual agreements, may represent
several different companies without being an employee of any
A person who signs and submits a written application for
The willful, unlawful burning of property. If
it is proved the policyholder was responsible for the arson,
the insurance company will not pay for the loss.
Auto Medical Payments
Optional automobile coverage that pays for medical expenses
incurred by the insured driver or his or her passengers,
without regard to who is responsible for the accident
Contractual protection against losses resulting from the
ownership and use of an automobile. Coverages common in auto
policies include FIRE, THEFT, COMPREHENSIVE, COLLISION,
PROPERTY DAMAGE and BODILY INJURY LIABILITY and UNINSURED
The money to be paid by an insurance company under the terms
of the insurance policy.
The person(s) named in the policy to receive
the life insurance proceeds upon the death of the insured.
A legal agreement between an insurance buyer and an insurance company
or its agent. it provides temporary insurance coverage until
a policy is either issued or refused.
A policy that covers a group of people ( such employees of
the same company) or several properties of exposures (kinds
of possible losses) under a single contract.
Injury to the body of a person as specifically defined in an
insurance policy. Bodily injury liability is the legal
responsibility for medical and related cost that may result
from injury to the life or health of another person.
The termination of an insurance policy either by the insured
party or the insurance company, before its normal expiration
date. A cancelable policy includes a provisions the the
contract can be terminated by either party upon notice to
the other. By contrast, a non-cancelable policy cannot be
canceled by the insurance company during its specified term.
(unless non-payment of premium)
A trade term for an insurance company.
Cash (Surrender) Value
The amount that is available in cash for loans and that may
be available for withdrawals. Accessing Cash Surrender Value
may reduce the death benefit and may increase the risk of
A demand for payment by a policyholder to an insurance
company, or by an injured party to the policyholder, for
recovery of a loss.
A section of a policy which deals with a particular subject, such as
Insurance against a loss resulting from damage to the
covered auto through collision with another object or upset
of the auto.
Covers damage to the auto not resulting from collision. For
example: an auto is parked near a building being painted and
becomes splattered with paint. Most claims paid under this
coverage are for fire, theft and windshield breakage.
The part of an insurance policy that spells out the
responsibilities of the policyholder and the insurance
Convertible Term Insurance
Term insurance which can be
exchanged (converted), at the option of the policyowner and
without evidence of insurability, for a permanent insurance
The guarantee to pay if specific losses occur, according to
the terms of the insurance policy.
Debris Removal Clause
This clause extends insurance coverage to include the cost
of debris removal resulting from damage caused by a covered
loss up to a specified limit of loss. The clause is an
additional property insurance coverage
An optional coverage with some fire policies that provides
for the cost of demolishing portions of a building still
intact after a fire or explosion. Such demolition is
sometimes required by ordinance for safety reasons or by the
building code in connection with rebuilding.
Normally the first page of a policy (Also referred to as the
Dec Page), it includes the insured's name, how long the
coverage applies, and how much insurance is being provided.
A return of part of the premium on participating insurance
that is based on the insurer's investment, mortality, and
expense experience. Dividends are not guaranteed.
Provisions of an insurance policy that state what the
company will NOT pay for.
The amount stated on the face of the policy that will be
paid in case of death. It does not include additional
amounts payable under accidental death or other special
provisions, or acquired through the application of policy
Deception or action intended to cheat. In insurance,
ordinarily involves intentional misrepresentation or
A contractual agreement that calls for one party, in
exchange for a consideration, to reimburse anther party for
certain specified losses. The insurance contract is call a
policy. The consideration is called a premium.
Acceptability to the company of an applicant for insurance.
Insured or Insured Life
The person on whose life the policy is issued.
Expiration or cancellation of an insurance policy by
nonpayment of premium.
The unlawful taking of money or property belonging to
Life insurance for which the premium remains the same from
year to year. The premium is normally more than the actual
cost of protection during the earlier years of the policy
and less than the actual cost in the later years. The
building of a reserve is a natural result of level premiums.
The payments in the early years, together with the interest
that is to be earned, serves to balance out the underpayment
of the later years.
A condition of being bound by law to do something, enforceable in the
courts. For insurance purposes it most often involve the
payment of damages.
Publication of defamatory information. This CAN be covered
by liability insurance.
A hold or claim one party has on the property of another,
usually as security for the debt or other obligation. For
example:, a home mortgage or loan on a car.
The largest total amount the insurance company will pay for
covered losses. Many policies have multiple limits - a
certain amount per person, another amount per accident and
sometimes, an aggregate limit on all losses paid during the
ie.... 100/300/100. In this example, the first 100
represents $100,000 bodily injury coverage PER PERSON. The
300 represents $300,00 per accident for bodily injury. The
last 100 represents $100,000 limit for property damage.
Loan (Policy Loan)
A loan made by a life insurance company from its general
funds to a policyowner on the security of the cash value of
Loss of Use
In the event you could not live in your home after an
insured peril occurs, the homeowners policy offers payment
of temporary living quarters while you are waiting for
repair work to be completed. You would also have additional
expenses such as food and laundry paid for as well.
Ordinance or Law
(1) Coverage for Loss to the Undamaged
Portion of the Building.
Pays for the loss of value of an undamaged portion of the
existing building which must be demolished and/or removed to
conform with municipal ordinance, code, etc.
(2) Demolition Cost
Pays for the cost of demolition of the undamaged portions of
the building necessitated by the enforcement of building,
zoning or land use ordinance or law.
(3) Increased Cost of Construction
Pays for any increased expenses incurred to replace the
building with one conforming to building laws or ordinances,
or to repair the damaged building so that it meets the
specifications of current building laws or ordinances.
Insurance that will remain in force with no need to pay
A life insurance policy that is eligible for the payment of
dividends by the insurer (see also Dividend.)
Any form of life insurance except term; generally insurance
that builds up a cash value, such as whole life.
Normally refers to the comprehensive and collision coverages
of an auto policy.
The person who owns a life insurance policy. This is usually
the insured person, but it may also be a relative of the
insured, a partnership or a corporation.
Payments to the insurance company to buy a policy and to
keep it in force.
Unlike other types of insurance, replacement cost insurance
does not depreciate your property of contents values. Every
covered item that needs to be replaced will be treated as if
it were brand new.
Term insurance which can be renewed at the end of the term,
at the option of the policyowner and without evidence of
insurability, for a limited number of successive terms. The
rates generally increase at each renewal as the age of the
Life insurance that does not build up cash value and where
the premium normally increases as the insured gets older.
Labor Costs Coverage
This endorsement is used to extend your Automobile policy to
reimburse you, up to a predetermined limit per disablement,
for towing charges or other specified costs when your auto
is disabled by a covered period.
Uninsured/underinsured Motorist Coverage
Optional coverage that pays the policyholder in the event an
accident is caused by a driver who has no liability
insurance or whose insurance is not adequate to cover the
full amount of damages for Bodily Injury Losses.
A flexible premium life insurance policy under which the
policyowner may change the death benefit from time to time
(with satisfactory evidence of insurability for increases)
and vary the amount or timing of premium payments. Premiums
(less expense charges) are credited to a policy account from
which mortality charges are deducted and to which interest
is credited at rates which may change from time to time.
Whole Life Insurance
A basic type of permanent life insurance which can provide
lifetime protection at a level premium. Premiums must
generally be paid for as long as the policy is in force.