COMBINED INSURANCE SERVICES

Accident: A sudden and unexpected event that occurs at a specific time and place. In newer policies, it may also include loss that occurs gradually over a period of time.
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 amount of reimbursement for a loss.
Additional Payments: See Supplementary Payments
Additional Insured: An individual or company, in addition to the insured, who is listed in the Declarations. An example is a mortgage company that has an insurable interest in the property insured.
Agent: The state-licensed professional who represents the insurance company in the sale and servicing of insurance; the direct link between the insurance company and the policyholder.
Agreed Value Coverage: An optional coverage written with property insurance policies. The amount of coverage comes from a signed statement of value filed with the company rather than the Actual Cash Value or Replacement Cost. This coverage is most popular on items of value like antique or classic vehicles and jewelry or antiques.
All Risk: See Open Peril
A. M. Best Company: Organization that rates the financial stability of insurance companies doing business in the United States. Visit their website by clicking
Application: A questionnaire filled out by an agent and the prospect who is seeking insurance. The form contains information used to underwrite and rate the policy.
Assigned Risk Plan: See Automobile Insurance Plan
Automatic Increase In Insurance Endorsement: A property insurance endorsement that provides that the policy limits will increase a certain percentage at regular intervals, for instance, once a year. Also called Inflation Guard Endorsement.
Automobile Insurance Plan: A state-sponsored plan for providing automobile insurance to those who are uninsurable under standard auto insurance policies.
Binder: Oral or written statement that provides immediate insurance protection for a specified period. Designed to provide temporary coverage until a policy is issued or denied.
Blanket Insurance: Insurance where a single amount of insurance applies to two or more items. Some homeowner's policies will have a blanket amount of insurance that covers the house, contents, and unattached structures instead of separate limits for each item.
Boat owners Policy: See Watercraft Package Policy
Bodily Injury (BI): Defined in most policies to include physical harm, sickness and disease, and death resulting from any of these at any time.
Builders Risk Coverage: One of the Commercial Property coverage forms; covers buildings under construction as well as the materials, equipment, supplies, and temporary structures used in the construction. This coverage is sometimes used to cover houses under construction. 
Burglary: As defined in Crime insurance policies, the taking of property by a person unlawfully entering or leaving the premises as evidenced by visible signs of forced entry or exit. Don't leave questions; call the police.
Business owners Policy (BOP): Package policy designed to provide broad property and casualty coverage for small businesses.

Cancellation: Termination of an insurance policy by the insured or the insurance company during the policy period.
Certificate of Insurance: Written form that verifies a policy has been written. Provides a summary of the coverage provided under the policy.
Coinsurance Condition: A condition that requires an insured to pay part of a loss if the coverage provided under the policy limits is less than a specified percentage of the value of the property at the time of loss. Most homeowners policies require that the home be insured for at least 80% of what it would cost to rebuild it or a penalty will be charged at the time of a loss.
Coinsurance Penalty: The amount not paid by the insurance company because the insured failed to comply with the coinsurance condition. For instance, if a house is not insured for the 80% required by a homeowners policy, the insurance company will only pay a percentage of the loss instead of all of it.
Collision Coverage: A type of Physical Damage insurance that covers loss due to the insured object striking another object. May also include upset or overturn of the insured object.
Combined Single Limit (CSL): See Single Limit
Comprehensive Coverage: In automobile insurance, a broad physical damage coverage that covers all property losses except collision and those perils or property that are specifically excluded. Also called Other Than Collision Coverage (OTC).
Concealment: The withholding of a material fact from the insurance company. May void the policy.
Consultant: Insurance professional who, for a fee, offers advice on the benefits, advantages and disadvantages of various insurance policies. Sells advice, not insurance.
Contents: Personal possessions that are not permanently attached to a structure. Examples would include a TV, clothing, kitchen table, etc.
Contract: A legal agreement between two parties promising a certain performance in exchange for a certain consideration.
Coverage For Audio, Visual and Data Electronic Equipment And Tapes, Records, Disks And Other Media: Personal Auto policy endorsement that provides coverage on a blanket basis for these items that are otherwise excluded from the policy.
Coverage For Damage To Your Auto Endorsement: Personal Auto policy endorsement that allows the insured to purchase stated amount coverage for vehicles that are worth more than their market value. Stated Amount is different from Agreed Amount.
Coverage Territory: The place where coverage under a policy applies.
Deductible: A dollar amount the insured must pay on each loss to which the deductible applies. The insurance company pays the remainder of each covered loss, up to the policy limits.
Defense Costs: Legal expenses incurred by the insurer to defend suits brought against insureds. Defense costs are paid in addition to payments for BI or PD claims.
Direct Writer: An insurance company that uses exclusive agents to sell its products.
Disability Insurance: Line of insurance that includes coverages that protect the insured against loss of income resulting from injury or sickness.
Dwelling Policy: Policy that provides property coverage to individuals and families. The unendorsed policy does not provide liability coverage. Covers dwellings, other structures, personal property, and fair rental value.
Dwelling Under Construction Endorsement: Dwelling Policy endorsement used to provide provisional limits of liability for dwellings under construction. The limits of liability increase as construction of the building progresses.
Earthquake Insurance: Insurance that covers damage to a structure, its contents or both as the result of an earthquake. Available as a separate policy, as an endorsement to the dwelling or Homeowners policy and through the Causes Of Loss--Earthquake form for the Commercial Property coverage part.
Endorsement: A document attached to a policy that modifies or changes the original policy in some way.
Excess Coverage: Coverage that applies only after the limits of primary insurance have been exhausted.
Exclusions: Section of the insurance policy that lists property, perils, persons, or situations that are not covered under the policy.
Exclusive Agent: An agent employed by a direct writer who markets insurance for a single company.
Fair Credit Reporting Act: Legislation the permits consumers who are denied insurance because of information contained in a credit report to be notified and allowed to obtain the information used in the report from the reporting agency.
FAIR Plan: Program established by law that makes property insurance available and affordable to insured who might otherwise be uninsurable because of "environmental hazards." Stands for fair access to insurance requirements.
Farmowners-Ranchowners Package Policy: Personal lines policy modeled after the Homeowners policy; provides coverage for farm dwellings, farm buildings, household and farm personal property, and liability for personal and farming activities.
Financial Responsibility Laws: State laws that require owners or operators of autos to provide evidence that they have the funds to pay for automobile losses for which they might become liable. Insurance is the usual method for providing this evidence to the state.
First Named Insured: The first person listed in the policy Declarations as an insured. The first named insured may have a higher level of duty or rights under the policy.
Flood Insurance: Insurance designed to reimburse property owners for loss due to flood or flood related erosion. Administered through the Federal Insurance Administration, but marketed through private insurers.
Fraud: A false statement intended to deceive the insurer and induce it to part with something of value or surrender a legal right. May void the policy.
Gross Negligence: Total disregard for the safety of others.
Hazard: Something that increases the chance of loss.
Health Insurance: A line of insurance that protects the insured against financial loss due to medical bills.
HO-15 Endorsement: See Special Personal Property Coverage Endorsement.
Home Day Care Coverage Endorsement: Endorsement used with the Homeowners policy to provide coverage for home day care businesses.
Homeowners Policy: A personal multi-line policy incorporating both Property and Liability coverages. There are six different forms that provide varying degrees of coverage.
Indemnity: A principle of insurance that provides that when a loss occurs, the insured should be restored to the approximate financial condition he or she occupied before the loss occurred, no better or no worse.
Independent Adjuster: Claim adjuster who works independently instead of for a particular insurer.
Independent Agent: Agent who represents many insurance companies, rather than a single company. Also called a nonexclusive agent.
Inflation Guard Endorsement: See Automatic Increase In Insurance Endorsement.
Inherent Vice: A condition or defect that exists within property from the beginning; a tendency of the property itself. Insurance policies usually exclude inherent vice.
Inland Marine Insurance: A form of insurance originally designed as an extension of Ocean Marine coverage to insure transportation of goods over land. Today it covers a variety of portable property, in addition to goods in transit. Sometimes this type of policy is added to a homeowners policy to cover jewelry or valuable items that may go over the limits of the contents coverage included in the policy.
Insurable Interest: Any actual, lawful and substantial economic interest in the safety or preservation of the subject of the insurance from loss or destruction or pecuniary damage or impairment. An insurable interest must exist when a claim is paid. This is why you can't insure someone else's car.
Insurance: A contract or device for transferring risk from a person, business or organization to an insurance company that agrees, in exchange for a premium, to pay for losses through an accumulation of premiums.
Insurance Commissioner: Head official of a state insurance department. May be elected or appointed. May also be called the Insurance Director or Insurance Superintendent.
Insurance Department: State department charged with controlling insurance matters within the state.
Jewelry Floater: An insurance contract that covers jewelry or other expensive items wherever they are located. See Personal Articles Floater.
Liability Insurance: Type of insurance that covers an individual or business for financial losses that arise out of the insured's responsibilities to others imposed by law or contract.
Life Insurance: Insurance that pays a stipulated sum to a designated beneficiary upon the death of the insured. Protects the insured's beneficiary against the financial consequences of the insured's premature death.
Limits of Liability: The maximum amount of insurance the insurance company will pay for a particular loss, or for losses sustained during a period of time. Also called policy limit, limit of insurance and limits of coverage.
Loss Payable Condition: See Mortgage Condition.
Market Value: Method used to pay property insurance losses based on the property's market value, or what it is currently worth at the time the loss occurs.
Material Fact: A fact that, had it been known at the time policy application was made, would have caused an insurance company to decline coverage or issue entirely different coverage.
Miscellaneous Type Vehicle Endorsement: An endorsement added to the Personal Auto policy to provide coverage for vehicles that are usually excluded by the policy, such as motorcycles, motor homes, golf carts, mopeds, and other recreational vehicles.
Misrepresentation: Statement of something that is known to be false.
Mobile Home Insurance: Package policy that provides property and liability insurance for owners of mobile homes.
Mortgage Condition: Condition found in property insurance policies that specifies the rights and duties of the mortgagee under the policy. Also called the Loss Payable Condition.
Mortgagee Rights: Rights granted to a mortgagee under a property contract issued to a mortgagor by virtue of the mortgagee's financial interest in the property.
Mutual Company: Insurance company owned by its policyholders. Policyholders share in profits made by the company through dividends or reductions in future premiums.
Mysterious Disappearance: Vanishing of property with no known explanation.
Named Non-owner Endorsement: An endorsement added to the Personal Auto policy to provide coverage for a named individual who does not own an auto while the insured is operating autos owned by others.
No-Fault Insurance: A form of automobile insurance mandated by law in many states where an insurance company reimburses its insured for auto losses, regardless of fault, and without resorting to subrogation.
Nonexclusive Agent: See Independent Agent
Nonrenewal: Insurance company's decision not to continue coverage for another policy period after the current policy period expires.
Occurrence: In liability policies, generally defined as an accident, including continuous or repeated exposure to the same general harmful conditions.
Open Peril Policy: Insurance that protects the insured from losses caused by any peril that is not specifically excluded by the policy. Also called all risk and special coverage.
Ordinance Or Law Coverage Endorsement: Endorsement used with Dwelling and Homeowners policies and the Commercial Property coverage part to provide coverage for demolition costs and increased construction costs required or regulated by law or ordinance.
Other Than Collision Coverage (OTC): See Comprehensive Coverage
Outboard Motor and Boat Insurance: Various Inland Marine floaters used to provide physical damage coverage for boats and equipment owned by individuals.
Pair Or Set Condition: Condition found in property insurance contracts that states that when part of a set is damaged or destroyed, the insured will not be reimbursed for the entire set. Policies provide various methods for determining the amount of reimbursement. The most common application of this condition involves earrings. If one is lost, what is the value of the earring that is left?
Peril: The cause of loss.
Personal Articles Floater: Personal Inland Marine Insurance that covers nine optional classes of personal property: jewelry, furs, cameras, musical instruments, silverware, golf equipment, fine arts, stamp collections, and coin collections.
Personal Auto Policy: Auto policy that provides broad coverage for both owned and non-owned autos used, maintained or operated by the insured and his or her family members.
Personal Effects Policy: Personal Inland Marine insurance that provides coverage for individuals and families who want to insure their personal belongings, such as baggage, while traveling or vacationing.
Personal Injury: Coverage for offenses such as libel, slander and invasion of privacy. May be included in Personal Liability coverages by endorsement.
Personal Injury Endorsement: Homeowners policy endorsement that modifies the definition of bodily injury to include personal injury.
Personal Liability: Liability exposure that arises from an individual's personal activities, such as driving a car or owning a home.
Personal Lines: Insurance coverages that protect individuals and their families.
Personal Property Floater: Personal Inland Marine floater that covers an individual's unscheduled personal property.
Personal Property Replacement Cost Endorsement: Endorsement used with the Homeowners policy to provide reimbursement for losses to personal property on a replacement cost basis.
Personal Yacht Insurance: A form of Ocean Marine insurance available to individuals who own boats. Provides both Hull and Protection And Indemnity insurance.
Policy: An insurance contract.
Policy Period: The date and time specified in the Declarations for when coverage begins and expires.
Private Passenger Autos: Category of autos that includes ordinary private passenger autos, station wagons and jeeps; pickups, panel trucks or delivery vans that are not individually owned; and utility trailers designed to be pulled by private passenger autos.
Property Damage (PD): Type of loss covered under many liability contracts. Includes the insured's liability for damage to the property of others or loss of use of another's property.
Pro Rata Cancellation: Cancellation of an insurance policy by the insurance company. Return premium is calculated on a pro rata basis, meaning the insurance company retains only earned premium.
Quotation: A summary of coverages and premiums proposed by an agent to a prospective client.
Rate: The basic charge an insurance company sets for various types of insurance.
Rebating: Giving or offering some benefit other than those specified in the policy to induce a customer to buy insurance. Rebating is illegal in most states.
Repair Cost: The cost to repair a damaged or destroyed item of property. May be the basis of reimbursement when repair cost is less than actual cash value.
Replacement Cost: The cost to replace a damaged or destroyed item of property. May be the basis of reimbursement for loss to buildings or, by endorsement, to personal property.
Retention Limit: In an Umbrella Liability policy, the amount the insured must pay for a loss that is not covered by an underlying policy before the Umbrella will begin to cover the loss.
Salvage: Damaged property that can be retrieved, reconditioned and sold to reduce an insured loss.
Scheduled Coverage: Property specifically listed and covered for a specific amount. Also called specific insurance.
Scheduled Personal Property Endorsement: An endorsement available with the Homeowners policy that provides scheduled coverage for nine optional classes of property against risks of direct loss that are not otherwise excluded. See also Personal Articles Floater.
Short Rate Cancellation: Cancellation of an insurance policy by the insured. Return premium is calculated on a short rate basis, meaning the insurance company keeps a portion of the unearned premium to cover expenses.
Single Limits: In liability policies, one limit that applies to both BI and PD. May also be called a combined single limit.
Special Coverage: See Open Perils.
Special Personal Property Coverage Endorsement: Homeowners endorsement used with the HO-3 form to provide open peril coverage on personal property. Also called the HO-15 endorsement.
Specific Insurance: See Scheduled Coverage.
Specified Peril Policy: See Named Peril Policy.
Split Limits: Limits of liability that stipulate separate limits for BI and PD.
Stated Value Policy: Insurance contract written to insure an item of property for a specific amount of insurance. Used to insure hard-to-value items, such as artwork.
Subrogation: The transfer to the insurance company of the insured's right to collect for damages.
Towing and Labor Costs Endorsement: Personal Auto endorsement that covers towing and the costs of labor performed at the site the car was disabled.
Umbrella Liability Policy: Type of policy that provides broad coverage for an insured's liability over and above liability covered by an underlying contract.
Underinsured Motorists Coverage: A coverage that reimburses the insured for the difference between the actual damages sustained by the insured for bodily injury and the amount of liability insurance that meets the state's minimum financial requirements carried by the driver who was at fault.
Underwriting: Insurance company function that involves researching and evaluating insurance applicants to decide which ones are acceptable to the company as insureds.
Unfair Discrimination: Offering one insured a lower or higher rate than another insured in identical circumstances, or accepting a bribe to provide insurance or lower the premium. Unfair discrimination is illegal.
Uninsured Motorists Coverage: Automobile coverage designed to provide protection for the insured if he or she is involved in an accident in which an uninsured motorist is at fault. Uninsured motorists include those who do not carry insurance, motorists whose insurance does not meet the state's minimum financial responsibility laws and drivers whose insurance company is insolvent.
Unoccupancy: The absence of people from a building. Property coverage is often restricted if there are long periods of unoccupancy.
Vacancy: The absence of both people and personal property from a building. Property coverage is often restricted when there are long periods of vacancy.
Vandalism and Malicious Mischief (V&MM): Coverage provided in many property insurance policies that protects property against damage caused by vandals.
Water Back Up And Sump Overflow Endorsement: Endorsement used with the Dwelling and Homeowners policies that covers loss to covered property caused by water backup through sewers and drains or from sump overflow. Most Homeowners policies don't cover this without this added coverage.
Watercraft Endorsement: An endorsement to the Homeowners policy that provides coverage for watercraft that is excluded under the Homeowners policy.
Watercraft Package Policy: A multi-peril package policy that protects an individual for property and liability losses arising out of the ownership, maintenance or use of watercraft.