Research Center


Insurance Glossary


Date: 2018-01-08

Insurance can be confusing. As an effort in transparency and custom coverage, Orrino Capital compiled a short glossary for you to reference in case you come across a term that you just can't quite define. Just another way the customer comes first.

 

A

ACTUAL CASH VALUE (ACV)

The value of any property that is lost or damaged at the time of the loss, in contrast to Replacement Cost

 

ADDITIONAL INSURED

Any person or party besides the policyholder who is added to a policy at the request of the policyholder. Once added they will also be covered under the policy.

 

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.

 

AGREED VALUE POLICY

Coverage that will pay the full insured amount of the vehicle or other property in case of a covered total loss, in contrast to stated amount.

 

ANTIQUE AUTOMOBILE

A private passenger automobile that is 25 years old or older and has been restored, maintained or preserved by antique automobile hobbyists. Antique, vintage and classic automobiles can be covered with classic car insurance.

 

AT-FAULT

The party that is legally liable for the damages in an accident.

 

B

BINDER

A temporary agreement declaring that the policy is in effect. Used in certain cases to protect a policyholder when it is not possible to issue or endorse the policy immediately.

 

BODILY INJURY LIABILITY COVERAGE

Pays damages for bodily injury or death resulting from an accident for which you are at fault and in most cases provides you with a legal defense. This coverage is subject to the terms, limits and conditions of your policy contract.

 

C

CANCELLATION

Termination of an insurance contract before the end of the policy period, by the insured or insurer.

 

CATASTROPHE

A disaster affecting a specific geographic area. Catastrophes often cause injury or even death; most result in extensive property damage. Hurricanes, floods, tornadoes, and even large hailstorms are typical examples of catastrophes.

 

CLASSIC AUTOMOBILE

A rare or historic private passenger automobile that is 10 years old or older (age may vary by state) and has been restored, maintained or preserved by classic automobile hobbyists. These types of cars are covered by classic car insurance.

 

CLASSIC CAR INSURANCE

A type of automobile insurance designed to provide specialized coverage for classic and antique vehicles that meet certain qualifications.

 

COMPREHENSIVE COVERAGE

Coverage for damage to your vehicle not caused by collision or upset (subject to deductible). Examples may include theft, vandalism, weather events and contact with animals.

 

CLAIM

Any request or demand for payment under the terms of the insurance policy

 

COLLISION COVERAGE

Pays for damage to an insured vehicle when it hits or is hit by another car or object, or if the car overturns. This coverage is subject to the terms, limits and conditions of your policy contract.

 

COVERAGE

Protection and benefits provided in an insurance contract.

 

CUSTOMIZED VEHICLE

A vehicle that has been altered or has equipment or accessories not typically found in a personal vehicle

 

D

DECLARATIONS

The part of your policy that includes your name and address; the property that is being insured, its location and description; the policy period; the amount of insurance coverage and the applicable premiums

 

DEDUCTIBLE

The portion of a claim you pay out of pocket. Choosing a higher deductible will lower your insurance premiums.

 

DEPRECIATION

The decrease in value of any property due to wear, tear, and/or time. Generally, depreciation is not an insurable loss

 

E

EXCLUSION

A provision in an insurance policy that excludes and/or limits certain coverages.

 

G

GAP INSURANCE

An automobile insurance option that comes into play when your vehicle is stolen or totaled. Gap insurance covers the gap or difference, if any, between your car's actual cash value and what you still owe on it

 

H

HOMEOWNERS INSURANCE

Protects homeowners from losses to their homes, personal property, and some types of damage or injury to others for which the homeowner is liable. Homeowners insurance is subject to the terms, limits and conditions of your policy contract.

 

HURRICANE DEDUCTIBLE

Depending on the state of residence, if a policy includes coverage for wind and hail, a separate deductible for insuring damages caused by a hurricane or named storm may be required. Special terms, conditions and deductibles may apply in certain states.

 

I

INDEMNIFICATION

The act of providing compensation for a loss with the intent to restore an individual or entity to the approximate financial position prior to the loss

 

INSURANCE

Coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril

 

L

LIABILITY INSURANCE

Insurance that provides protection from claims arising from injuries or damage to other people or property.

 

LIMITS OF LIABILITY

The amount specified in your policy up to which the insurance company will protect you

 

LOSS

Any measurable dollar cost of damage and/or injury suffered by a person.

 

M

MOTOR VEHICLE REPORT (MVR)

A report from the agency that issues your driver's license, listing accidents and violations that appear on your driving record. This report is used to verify information provided by insurance applicants and policyholders.

 

N

NAMED INSURED

The person or entity listed on the policy declarations page.

 

NEGLIGENCE

The failure to exercise the care that is expected of a reasonable person in similar circumstances.

 

NON-RENEWAL

When an insurer decides not to renew a policy at the end of its policy period

 

P

PERSONAL INJURY PROTECTION

May pay for your medical treatment, lost wages, or other accident-related expenses regardless of who caused the accident. This coverage is subject to the terms, limits and conditions of your policy contract and is not available in all states

 

PERSONAL PROPERTY

Property that is not land or connected to land (real estate), such as furniture or jewelry.

 

POLICY

A contract between you and the insurance company.

 

POLICY CHANGE

Any change made to your insurance policy during the period that the policy is in force

 

POLICYHOLDER

The person or entity listed on the policy declarations page

 

PRE-ACCIDENT CONDITION

The state of the vehicle before the accident, including damage not related to the accident, mileage, options, and other factors

 

PREMIUM

The price of the insurance policy that the insured pays in exchange for insurance coverage

 

PROOF OF LOSS

A statement made regarding the extent of the claim; it may be requested in accordance with the conditions of the policy

 

PROPERTY DAMAGE LIABILITY COVERAGE

Pays for damage to someone else's property resulting from an accident for which you are at fault and in most cases provides you with a legal defense. This coverage is subject to the terms, limits and conditions of your policy contract.

 

Q

QUOTE

A statement of the premium that will be charged for insurance coverages based on specific information provided by the person requesting the quote including drivers, vehicles, and driving record

 

R

RATE

Often used as a synonym for premium but actually refers to the base rating units that are used to determine the final premium.

 

RENEWAL DATE

The date that your insurance policy expires and the date that your renewed policy will begin.

 

RIDER

In life and health insurance, the term 'rider' is often used to refer to an endorsement to an insurance policy

 

RISK

The chance of suffering a loss.

 

S

SUPPLEMENT/SUPPLEMENTAL ESTIMATE

Used to cover damage not included in the original estimate

 

T

THIRD PARTY CLAIM

Claims for injury or damage to property of a third party alleged to have been caused by the insured.

 

TOTAL LOSS

Property that has sustained damage so extensive that repairing it is not reasonable. A vehicle is considered a total loss if it cannot be repaired safely, if repairing the vehicle is not economically practical, or if state regulations require us to consider it a total loss

 

U

UMBRELLA INSURANCE

Provides high limits of additional liability coverage above any liability policy (homeowners, auto, general liability). In addition, it provides coverage that may be excluded by other liability policies

 

UNDERWRITING

The process an insurer goes through to determine whether or not it will provide coverage for an applicant

 

W

WARRANTY

A written guarantee of the integrity of a product and of the manufacturer's responsibility for the repair or replacement of defective parts

 

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