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GLOSSARY OF INSURANCE TERMS:
Last updated: August 2021
Here are some of the more frequently used insurance terms. If you can't find a term you would like defined, feel free to call us at 1-340-773-6412, Monday through Friday, from 8:30 a.m. to 12:00 p.m. and 1:00 p.m. to 4:30 p.m. ET, or email us any time. We would be happy to help you with any insurance questions you may have.
All definitions provided are examples. Consult your policy for the terms that apply to your coverage.
A
Accident or Accidental
A sudden, unforeseeable event that causes bodily injury or property damage.
Actual cash value (ACV)
The value of any property that is lost or damaged at the time of the loss.
Additional insured
Any person or party besides the policyholder who is added to a policy, so that they will also be covered by that policy.
Anniversary Year
The 12 consecutive months following the Effective Date of the Policy and each 12-month period thereafter.
Appraisal
An estimate of property value, or of the extent of property damage, provided by an authorized person. Appraisals are performed to determine the value of property at the time of a loss.
B
Benefits
The amounts paid to a claimant or beneficiary under the coverage of a policy.
Benefit Year
The 12-month period following the date a claim for a specific benefit is first incurred, and each 12-month period thereafter.
Bodily Injury Coverage
The type of coverage that pays for medical expenses and/or funeral costs of other individuals injured, or killed, in an accident for which you are liable.
C
Calendar Year
The 12-consecutive-month period that begins on January 1 and ends on December 31. (Calendar-year resets every January 1st. A plan year resets on the renewal date of your policy.)
Cancellation
Terminating an insurance contract before the specified end-date listed in the policy.
Claim
A request for benefit payment under the terms of an insurance policy.
Claimant
The person(s) making a request for payment of benefits under the terms of an insurance policy.
Collision Coverage
The type of coverage that pays for the damages to your vehicle sustained as a result of a collision with another vehicle or object.
Comprehensive Coverage aka "other than collision"
Comprehensive is sometimes called "other than collision" coverage. The type of coverage that pays for damage to your vehicle sustained as a result of fire, theft, vandalism, or various other stated causes. Help's pay to replace or repair your vehicle in an incident that's not a collision. If you're financing or leasing your car, your lender likely requires comprehensive coverage. If you own your vehicle outright, it's up to you the owner if you want to add this type of coverage on your auto insurance policy.
For more information or to help you deside whether you should purchase this coverage go to the following link autoknowledgebase.php?comprehensivecoverageview#comprehensivecoveragetop
Compulsory Automobile Insurance (a/k/a “Liability Insurance - Automobile”)
Conditions
Refers to the construction of a building, such as your residence. For example, frame or masonry.
Construction Type
Refers to the construction of a building, such as your residence. For example, frame or masonry.
Coverage
Another term for the protection offered under an insurance policy. Coverage is used interchangeably with the terms insurance or protection.
D
Declaration
A statement, signed by the insured, warranting that the information given by him/her is true.
Declarations page
A page in your policy – usually the front page – with basic information that identifies the policyholder, the property or vehicles covered, the coverages and the premium amounts. In informal conversation, you may hear it referred to as the “dec[k]” page.
Deductible
The portion of a loss that you are required to pay before your insurance coverage will respond.
Depreciation
A decrease in the value of property due to wear, age or other cause.
E
Effective Date
The effective date is the time, day, month, and year when your insurance coverage becomes active. Generally, the effective time begins at 12:01 am. You can typically find your effective date on the declarations page in your policy documents. Knowing the effective date is very important as you will want to make sure you are covered.
Say you buy a car from someone on May 31st but your insurance policy effective date is June 1st. You get in an accident on the way home from the purchase on May 31st, you would be personally responsible for all monies owed as your insurance policy was not active at that time.
Endorsement
A statement added to an insurance policy that alters, deletes or adds coverage, terms or provisions of the policy.
Exclusion
A provision in an insurance policy that excludes and/or limits certain coverages.
G
Garage location
The address where a vehicle is usually parked or garaged, which could differ from the policyholder's primary residence or policy mailing address. Living in town you might park your vehicle in a lot or garage not attached to your home, you should use the lot or garage address as that is where your vechicle is kept.
I
Insured
The person (or persons) whose risk of financial loss from an insured peril is protected by the policy. Sometimes called the "policyholder".
Insurer
Person or company that underwrites an insurance risk. The party in an insurance contract that provides insurance coverage and services a policy.
L
Lapse
A period of time when someone goes without insurance coverage.
Lease
A contract granting use or occupation of property during a specified period, in exchange for a specified rent.
Leaseholder
An individual who possesses or has use of property through a lease.
Lessee
An individual to whom a lease is granted.
Liability Insurance - Automobile (a/k/a “Compulsory Automobile Insurance”)
Automobile liability insurance is financial protection for a driver who, while operating a vehicle, harms someone else or their property. Automobile liability insurance only covers injuries or damages to third parties and their property, not to the driver or the driver’s property.
For more information about this coverage go to the following link autoknowledgebase.php?liabilityinsuranceautomobileview#liabilityinsuranceautomobiletop
Lifetime Maximum
The maximum amount of benefits that will be paid for all covered services during the entire time you are insured.
Limits of insurance
The amount an insurance company will pay for a covered loss, as stated in the policy.
Loss history
A history of a person's automobile or property losses.
Loss of Use Coverage - Homeowners
Loss of Use Coverage is an optional part of a homeowners insurance policy. In your policy, you may also see it listed as Coverage D in the policy documents. This coverage can help pay for the additional costs you might incur for reasonable housing and living expenses if a covered event makes your house temporarily uninhabitable while it’s being repaired or rebuilt.
For more information about this coverage go to the following link homeknowledgebase.php?lossofusecoverageview#lossofusecoveragetop
M
Medical Payments Coverage
Medical payments coverage is a optional part of an auto insurance policy. It may help pay your or your passengers' medical expenses if you're injured in a car accident, regardless of who caused the accident.
For more information or to help you deside whether you should purchase this coverage go to the following link autoknowledgebase.php?medicalpaymentscoverageview#medicalpaymentscoveragetop
N
Named insured
The person or entity specifically identified as the named insured in an insurance policy. This person is also referred to as the policyholder.
O
Other structure
A structure located on the residence premises that is not directly attached to the dwelling structure, such as a detached garage or gazebo. It may be insured under a homeowners policy.
P
Plan Year
The 12-consecutive-month period that begins on the renewal date of the policy. (Calendar-year resets every January 1st. A plan year resets on the renewal date of your policy.)
Policy
The legal document issued by an insurance company to a policyholder, which outlines the conditions and terms of the insurance. Also called the contract.
Policyholder
The person or entity specifically identified as the named insured in an insurance policy. This person is also referred to as the named insured.
Premium
The cost of insurance coverage. A premium can be paid monthly, semi-annually or annually.
R
Renters Insurance
Property Insurance providing coverage to an individual living in an apartment, condominium or single family home owned by someone else.
T
Title
A legal document or certificate showing ownership of a vehicle.
U
Underwriting
The process by which an insurer determines whether or not, and on what basis, it will accept an application for insurance.
Uninsured Motorist (Bodily Injury Only) Coverage
Uninsured motorist bodily injury insurance is an optional part of an auto insurance policy. Uninsured motorist bodily injury insurance covers you, any family member and your passengers for bodily injuries, or death caused by an at-fault driver who does not have insurance (uninsured).
For more information or to help you deside whether you should purchase this coverage go to the following link autoknowledgebase.php?uninsuredmotoristscoverageview#uninsuredmotoristscoveragetop
V
Vehicle identification number (VIN)
Your vehicle's unique 17-character VIN can be found on the dashboard and driver's side door jamb. This unique serial number is also included on your vehicle's registration form and insurance card. The VIN is a unique code, including a serial number, used by the automotive industry to identify individual motor vehicles, towed vehicles, motorcycles, scooters and mopeds.
For more information about the Vehicle identification number (VIN) go to the following link https://en.wikipedia.org/wiki/Vehicle_identification_number
W
Wind/hurricane deductible
A separate deductible that applies only to covered wind or hurricane losses.
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If you don't see the Term defined here that you need. Please use our Contact Us form and send us the Term name you need help with.
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