Accident - An unexpected loss that occurs at a specific time and place.

Actual Cash Value (ACV) - The cost to replace an item of property at the time of loss, less an allowance for depreciation. Often used to determine the amount of reimbursement for a loss.

Adjuster - A person who investigates and settles losses for an insurance carrier.

Additional Coverages - Supplemental insurance coverages that apply only in certain circumstances, have reduced or separate limits of liability or require you to meet certain requirements before they are applicable. Also called “coverage extensions,” “other coverages” and “extended coverages.”

Annual Policy - Insurance policy written for a term of one year or renewed one year at a time.

Application - The statement of information that you give when applying for an insurance policy and that an insurance company uses to help decide if it will issue the policy and what premium will be charged.

Arbitration - Determination by impartial experts of the value of property or the extent of damage. Many insurance polices provide for appraisals when the company and you cannot agree on the amount or the extent of a loss. Arbitration also may be used to resolve liability and policy-coverage issues in certain situations.

Audit - An examination of the books of accounts, vouchers and other records of a person, corporation, firm or other organization for the purpose of ascertaining the accuracy or inaccuracy of the record.

Business Owners Package - a separate policy that includes property and liability coverage.

Binder - A written or oral contract issued temporarily to place insurance in force immediately prior to issuance of a new policy or endorsement of an existing one. A binder is subject to payment of the premium and provides coverage under the terms of the policy to be issued, unless otherwise specified.

Bodily Injury Liability - Protects you from financial loss when you are held liable for the injury or death of others because of an auto accident, including the legal and court cost to defend you in a covered lawsuit

Burglary - The loss of property due to theft when there is visible evidence of forcible entry to the exterior of the building.

Cancellation - The discontinuation of an insurance policy before its normal expiration date.

Catastrophe - A single event causing numerous losses exceeding a large specified total cost set by an insurance company. Normally a company would have reinsurance for loss payments in excess of the specified amount. Tornadoes, hurricanes and other violent weather are the most common catastrophes.

Claim - A request for payment for a loss, which may come under the terms of an insurance contract. There are two types of claims. A first-party claim is one made by the policyholder for reimbursement by his or her company. A third-party claim is one by a person against a policyholder of another company and the payment, if any, will be made by that company.

Coinsurance - An arrangement in a health insurance policy whereby you pay a portion of the expenses, and the insurance company pays the rest.

Collision - Pays for the repair or replacement expenses for damage to your covered auto caused by a collision. The limit of your Collision Coverage will not exceed the actual cash value of your auto at the time of the accident less the deductible

Comprehensive (other than collision/OTC) - Protects your covered auto from damage other than collision. Types of losses usually covered are fire, theft, glass breakage, vandalism, windstorm, flood and hail. The limit of your coverage will not exceed the actual cash value of your auto at the time of accident, less deductible.

Concealment - Failure to disclose detail to the insurance company that might affect your insurance coverage.

Condominium Insurance - A policy that covers unit owners for personal property and liability separate from the insurance the condo association carries.

Coverage - The amount of protection provided by an insurance policy.

Declaration - A portion of an insurance policy that includes the policyholder’s name, address, effective date, expiration date, types and amounts of coverage and premium.

Deductible - is the initial amount you must pay before the insurance company can start to reimburse. The deductible is the amount of risk you take on, and the remainder of the loss is the risk that the insurance company assumes

Depreciation - The loss of value of property over a period of time.

Endorsement - An addition to a property/casualty insurance policy.

Exclusion - The denial of coverage for certain perils, individuals, locations or property.

Expiration Date - The date on which an insurance policy ceases to be in effect.

Exposure - Possibility of loss.

Face Amount - The amount of money to be paid to beneficiaries if the policyholder dies or when the policy matures, exclusive of amounts specified in special provisions.

First Party - A policyholder.

Floater - A type of insurance coverage on moveable possessions like art, jewelry and furs that protects against loss of property, regardless of where the object is lost, stolen or damaged.

Fraud - The intentional concealment or misrepresentation of facts for the purpose of collecting insurance benefits or selling policies.

Group Insurance - A type of insurance obtained through membership to an organization or association or by working for an employer.

Hazard - A situation that causes property loss, personal injury or death. An example of a hazard is frayed wiring; it is a condition that creates or increases the chance of loss.

Health Insurance - Insurance that covers payments for medication or to medical providers and hospitals.

Homeowner’s Insurance - A type of insurance that includes coverage for loss or damage of property, additional living expenses incurred as a result of property loss or damage and personal liability.

Incidental Business Endorsement - an endorsement added to your existing homeowners policy which covers structures or equipment you use for your business.

In-Home Business Owners Policy - a single policy that some insurance companies offer that combines homeowners and business owners coverage into a single policy.

Indemnity - Insurance benefits or reimbursement for loss.

Inflation guard is an endorsement that is added to your homeowners policy. It increases the face amount of the policy by a stated percentage to compensate for inflation. The advantage of this endorsement is that it ensures that your home is always insured to value.

Insurable Interest - A financial interest (risk) which the insured(s) must posses at time of loss. Examples of insurable interests are lien holders, mortgagees and owners.

Insurance - A social device (legal contract or policy) for the transfer of risk through the accumulation of funds. Through insurance individuals with similar risks contribute to a fund out of which their losses can be paid, distributing risks and losses to a large group of people. When a large group of people contributes money to a fund out of which their losses can be paid, it is called “pooling of risks.” The larger the group, the better it works financially.

Insured - Person covered by an insurance policy.

Lapsed Policy - An insurance policy that is no longer effective due to the non-payment of premiums either by the due date or after the grace period has ended.

Liability - An obligation that can be legally enforced.

Liability Insurance - This type of insurance provides protection from financial legal obligations. Also known as casualty insurance.

Liability Limit - The total amount of money for which an insurance company agrees to cover the holder of a liability insurance policy.

Medical Payments - Pays for reasonable medical expenses if you or others in your auto are injured in a covered auto accident. It also provides coverage if you or another family member living with you are hurt while riding in another persons auto. This coverage pays regardless of fault.

Moral Hazard - Risks caused by the behavior of a policyholder, like intentionally setting a fire to collect insurance.

Mortgage Insurance - A type of life insurance that pays the remainder of the policyholder’s mortgage when the individual dies.

Named Perils - Property insurance coverage for loss from certain situations specifically listed in the policy rather than protection from loss due to any cause except those specifically excluded.

National Flood Insurance Program (NFIP) - Federal government-sponsored insurance that covers the policyholder for property losses caused by floods.

Negligence - A failure to exercise a level of care that could result in injury, death or loss of or damage to property.

No-fault Automobile Insurance - A type of insurance that covers injuries and losses as a result of a car accident regardless of who caused the accident.

Notice of Loss - The act of informing an insurance company of a loss.

Occupational Hazard - Dangers inherent to a job that increase the likelihood of illness, injury or death.

Omnibus Clause - A provision in a car insurance policy that covers drivers of the policyholder’s car.

Package Policy - Two or more types of insurance combined into a single policy. A homeowner’s policy package might include coverage for property and liability.

Peril - An actual cause of loss. Examples of peril are fire, theft and windstorms.

Personal Injury Protection Automobile Insurance (PIP) - Type of insurance that covers medical expenses, loss of income and other expenses that result from a car accident.

Personal Lines - Insurance policies for individuals and families, as opposed to business insurance.

Physical Hazards - Tangible risks like faulty electrical wiring, inferior building materials or poorly constructed heating or air-conditioning systems.

Policy - A written insurance contract.

Policyholder - The owner of an insurance contract.

Premiums - Payments in exchange for insurance coverage.

Proof of Loss - Documentation you submit to the insurance company when filing a claim.

Property Damage Liability Insurance - A type of insurance that protects you from financial responsibility for damage to another person’s property.

Property Insurance - A type of insurance that covers you for loss or damage to possessions.

Real Property - A home and the land it is attached to.

Rental Reimbursement - To rent a substitute auto due to a loss covered by your Collision or Comprehensive coverages.

Renter’s Insurance - A type of insurance that protects policyholders who are tenants. Also known as tenant’s insurance.

Replacement Cost Property Insurance - A type of insurance that pays you the amount to replace property at today’s price rather than the depreciated value.

Rider - An addition to an insurance policy.

Risk - The chance of loss. Insurance companies view an individual or the property insured - a car or house, for example - as risks, because that person or property could sustain a loss.

Schedule - A list that itemizes insured property or possessions and the amount for which they are insured.

Second Party - Language in an insurance contract that refers to the insurance company.

Tenant’s Insurance - A type of insurance that protects policyholders who are tenants. Also known as renter’s insurance.

Term Insurance - A type of life insurance that expires after a predefined number of years.

Third Party - An individual who seeks to be reimbursed by a liability insurance policy.

Towing and Labor - This coverage is available only if your insured auto has Comprehensive coverage. It helps to reimburse expenses you may incur if your covered auto is temporarily disabled.

Umbrella Liability - Coverage above the standard liability level.

Underwriting - The process of selecting risks for insurance and determining the amount and the terms of the risk the insurance company will accept.

Uninsured Motorists - Protects you and other passengers in your auto if you are injured in a covered auto accident by an uninsured or hit-and-run driver, who is held legally responsible for your injuries. It pays the medical expenses and related expenses you've incurred up to the coverage limits you select

Underinsured Motorist (UIM) Coverage protects you and anyone in your household against eligible bodily injury losses, up to the UIM limits you purchased, when you cannot recover the losses from an at-fault motorist because the at-fault motorist’s liability limits are too low to cover your expenses

Vandalism - The deliberate destruction of property