Actuary: a specialist in the mathematics of insurance who calculates rates, reserves, dividends and other statistics.
Aggregate limit: usually refers to liability insurance and indicates the amount of coverage that the insured has under the contract for a specific period of time, usually the contract period, no matter how many separate accidents might occur.
Automobile Liability Insurance: coverage if an insured is legally liable for bodily injury or property damage caused by an automobile. Broker: insurance salesperson that searches the marketplace in the interest of clients, not insurance companies.
Claim: a demand made by the insured, or the insured's beneficiary, for payment of the benefits as provided by the policy.
Comprehensive Insurance: auto insurance coverage providing protection in the event of physical damage (other than collision) or theft of the insured car. For example, fire damage or a cracked windshield would be covered under the comprehensive section.
Elimination Period: the time which must pass after filing a claim before policyholder can collect insurance benefits. Also known as "waiting period."
General Liability Insurance: insurance designed to protect business owners and operators from a wide variety of liability exposures. Exposures could include liability arising from accidents resulting from the insured's premises or operations, products sold by the insured, operations completed by the insured, and contractual liability. Indemnity: restoration to the victim of a loss by payment, repair or replacement.
Liability: broadly, any legally enforceable obligation. The term is most commonly used in a pecuniary sense.
Liability Insurance: insurance that pays and renders service on behalf of an insured for loss arising out of his responsibility, due to negligence, to others imposed by law or assumed by contract.
Licensed: indicates the company is incorporated (or chartered) in another state but is a licensed (admitted) insurer for this state to write specific lines of business for which it qualifies.
Liquidity: liquidity is the ability of an individual or business to quickly convert assets into cash without incurring a considerable loss. There are two kinds of liquidity: quick and current. Quick liquidity refers to funds--cash, short-term investments, and government bonds--and possessions which can immediately be converted into cash in the case of an emergency. Current liquidity refers to current liquidity plus possessions such as real estate which cannot be immediately liquidated, but eventually can be sold and converted into cash. Quick liquidity is a subset of current liquidity. This reflects the financial stability of a company and thus their rating.
Named Perils: perils specifically covered on insured property.
Net Premium: the amount of premium minus the agent's commission. Also, the premium necessary to cover only anticipated losses, before loading to cover other expenses.
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.
Policy: the 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.
Renewal: the automatic re-establishment of in-force status effected by the payment of another premium.
Risk Class: risk class, in insurance underwriting, is a grouping of insureds with a similar level of risk. Typical underwriting classifications are preferred, standard and substandard, smoking and nonsmoking, male and female.
Subrogation: the right of an insurer who has taken over another's loss also to take over the other person's right to pursue remedies against a third party.
Term Life Insurance: life insurance that provides protection for a specified period of time. Common policy periods are one year, five years, 10 years or until the insured reaches age 65 or 70. The policy doesn't build up any of the nonforfeiture values associated with whole life policies.
