Common
Insurance Terms
Agent- A licensed person or
organization authorized to sell insurance by or on behalf of an insurer.
Automobile Insurance
- Coverage on the risks associated with driving or owning an automobile.
It can include collision, liability, comprehensive, medical, and uninsured
motorist coverages.
Binder -
Temporary or preliminary agreement which provides coverage until a policy can
be written or delivered.
Broker - A
licensed person or organization paid by you to look for insurance on your
behalf.
Broker-Agent -
A licensed individual who can act as an agent representing one or more
insurance companies and also as a broker dealing with one or more insurance
companies representing your interests.
Broker Fee -
An amount of money charged by a broker to obtain insurance for an insured. This
fee is usually earned and usually not refundable. It must be disclosed to and
agreed upon by the insured. This fee is not part of the insurance premium. It
is a contractual agreement between the broker and the client.
Deductible -
The amount of the loss which the insured must pay.
Endorsement -
Amendment to the policy used to add or delete coverage. Also referred to as a
"rider."
Exclusion -
Certain causes and conditions, listed in the policy, which are not covered.
Fire Insurance -
Coverage for loss of or damage to a building and/or contents due to fire.
Health Insurance -
A policy that will pay specified sums for medical expenses or treatments.
Health policies can offer many options.
Homeowners Insurance -
An elective combination of coverage for the risks of owning a home. Can include
losses due to fire, burglary, vandalism, earthquake, and other perils.
Insured -
The policyholder - the person(s) protected in case of a loss/claim.
Insurer -
The insurance company.
Life Insurance -
A policy that will pay a specified sum to beneficiaries upon death of the
insured.
Limit -
Maximum amount a policy or particular coverage will pay.
Policy -
The written contract of insurance.
Premium -
The amount of money an insurance company charges for insurance coverage.
Premium Financing
- The agreement whereby a policyholder contracts with a lender to pay the
insurance premium on his or her behalf. The policyholder agrees to repay the
lender for the cost of the premium, interest and fees.
Quote - An
estimate of the cost of insurance, based on information supplied to the
insurance company by the applicant.
Replacement Cost -
The amount that it costs to replace lost or damaged property with new property
of like kind and quality in the local market.
Solicitor -
A licensed employee of a fire and casualty agent or broker who may act for the
agent or broker in some circumstances.
Waiting Period
- A period of time set forth in a policy that must pass before some or all coverage
begin.
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