Umbrella Insurance Glossary
A
Actual Cash Value
The value of your property, based on market value minus depreciation.
Actuary
Third-party professional who calculates premium rates, risks, etc. for the pricing of insurance policies.
Adjuster
The insurance company employee who investigates insurance claims and determines policyholder’s claims.
Applicant
The person applying for an insurance policy
Appraisal
The determination of the value of property.
Appraiser
An evaluation of your property claim by an authorized person to determine property value or damaged property value.
Assessed Value
The value of commercial property as assigned by a municipal tax authority.
B
Binder
Provides proof of insurance coverage until you receive your permanent policy.
Blanket Insurance
Allows a business owner to insure multiple property types at one location, or one property type at multiple locations.
Broker
Someone who negotiates insurance contracts on behalf of insurers
Business Interruption Insurance
Covers lost income when a business is forced to close due to a covered event.
C
Cancellation
When a policy is terminated before the expiration date
Carrier
An insurance provider
Claim
A request for payment by the policyholder after an accident or other loss
Claimant
The person making the claim
Claims Adjuster
The person who determines the cause of the loss and whether or not it’s covered under the insurance policy.
Commercial Property Insurance
This policy is meant to protect the building and other business property that you own or lease.
D
Declarations Page
The section of an insurance contract containing such information as the name, description, and location of insured property; the name and address of the policyholders; the period for which the policy is in force; premiums payable; and the amount of coverage.
Delinquent
A bill or policy that is overdue in payment
Depreciation
The decrease in property value over time.
E
Earned Premium
The amount of premium that an insurance company has earned on your policy.
Employment Practices Liability Insurance (EPLI)
Insurance coverage for lawsuits brought against a business by its employees.
Errors and Omissions Insurance
Liability insurance that protects employees & employers against claims of negligence or inadequate work.
F
Field Representative
An employee of the insurance company that works within a specific territory.
Flat Cancellation
The cancellation of an insurance policy before the insurance company has assumed liability, resulting in the insured getting their premium refunded.
Fraud
A deliberate misrepresentation for gain.
G
General Liability Insurance
Insurance policy covering lawsuits over property damage and bodily injury.
Grace Period
Some auto insurance policies have a time frame that allows customers to make a payment after the due date.
H
Hired and Non-Owned Auto Insurance
Auto insurance coverage for cars not owned by a business but used by employees for business purposes.
I
Installment Fee
A fee charged when making monthly installment payments of an insurance premium
Installment Premium
One or more payments made by the insured until the entire insurance premium is fully paid. They may be made monthly, quarterly, or semi-annually at a slight additional charge.
Insurer
The insurance company
Insured
The homeowners insurance policy holder
Insuring Agreement
The portion of an insurance policy that specifies which risks are covered and also lists the exclusions.
L
Lapse in Coverage
A period of time when a person goes without insurance coverage
Liability Coverage
Protects you against financial loss if you are sued and found legally responsible for someone else’s injury or property damage
Loss
The amount the insurance company pays on a claim
M
Market Value
The current value of your property.
Medical Payments Coverage
Helps pay for your medical and funeral expenses
Misrepresentation
Giving false or misleading information
N
NAIC Number
A number issued by the National Association of Insurance Commissioners (NAIC) for each individual underwriting company.
Non-Renewal
When an insurance company decides not to renew the insurance policy.
O
Occurrence
An occurrence policy covers claims made for injuries sustained during the life of an insurance policy. It covers losses that take place during a specific coverage period, regardless of when an incident is reported.
P
Policy Limit
The maximum amount an insurance company will pay for a loss covered by the insurance policy.
Policy Rewrite
The process of terminating a policy before the expiration date stated in the policy, and issuing a new policy.
Primary Insurance
The policy that will respond first in the event that a loss is covered by more than one policy.
Proof of Loss
A sworn statement you send to your insurance provider when making a property insurance claim.
Pro Rata Cancellation
Cancellation on an insurance policy in which the policyholder is fully refunded for premiums that have been paid in advance.
Property Damage
Physical damage to your property
Q
Quote
An estimate of the price of your potential insurance policy.
R
Rating
The determination of the cost of a premium based on risk characteristics and calculation of the chance of a loss.
Reciprocal
The information that is transferred from one state to another.
Reinstate
When a policy is reactivated without lapse after cancellation or expiration.
Renewal
Continuation of a policy after its expiration date.
Renewal With Lapse
When a policy is renewed past the expiration date, after a period without coverage.
Replacement Value
The cost to replace your property with a new equivalent.
Risk
The chance of loss to the insured that’s related to the insurance policy.
S
Short Rate Cancellation
When an insured cancels the insurance policy prior to the expiration date and a penalty is applied to the refund amount based on the time remaining on the policy.
Single Interest Insurance
Covers the interests of one of the two parties that co-own property. Usually refers to insurance protecting the bank or other lending institution but not the owner-borrower.
Small Business Insurance
Insurance coverage specifically designed to help protect small businesses against expensive lawsuits.
Surcharge
An additional amount of money charged to a premium based on the actions of the insured such as accidents or moving violations.
T
Term
The period of time that the insurance policy is active.
Theft
The unlawful taking of your possessions
U
Umbrella Insurance
Extra liability insurance that provides an extra layer of security from large claims or lawsuits.
Underinsured Property Damage
Coverage for property damage caused by a party who is at fault and not sufficiently insured
Unearned Premium
The amount of a pre-paid premium that has not yet been used to buy coverage
Underwrite
The process of evaluating the risk of insuring an automobile.
V
Voided
An insurance policy that has been canceled and cannot be reinstated.
W
Warranty
Written assurance of a product’s reliability and the manufacturer’s accountability to replace or repair defective parts.
Written No-Loss Statement
A written and signed statement by the insured that claims no losses, no accidents, and no damage was done to the insured vehicle between the time your policy canceled to the time of reinstatement.
Written Premium
The amount of the premium charged for a policy that has already become effective.