Actual Cash Value (ACV)                 "Actual Cash Value" is the replacement cost of property damaged or destroyed at the time of loss, with deduction for depreciation. Actual cash value cannot exceed the applicable limit of liability shown in the declarations of the policy, nor the amount it would cost to repair or replace such property with material of like kind and quality within a reasonable amount of time after a loss.

 

Adjuster                                              The person who handles the settlement of claims on behalf of an insurance company, either as an employee of the company or an independent engaged by contract. Also called a claims representative.

 

Agent                                                  The representative of an insurance company responsible for selling and servicing policies. Can be an employee representing only one company (sometimes called a "captive agent" or a "direct writer" or an "independent agent" who, through contractual agreements, may represent several different companies without being an employee of any of them.

 

Applicant                                             A person who signs and submits a written application for insurance coverage.

 

Arson                                                  The willful, unlawful burning of property. If it is proved the policyholder was responsible for the arson, the insurance company will not pay for the loss.

 

Auto Medical Payments                    Optional automobile coverage that pays for medical expenses incurred by the insured driver or his or her passengers, without regard to who is responsible for the accident

 

Automobile Insurance                        Contractual protection against losses resulting from the ownership and use of an automobile. Coverages common in auto policies include FIRE, THEFT, COMPREHENSIVE, COLLISION, PROPERTY DAMAGE and BODILY INJURY LIABILITY and UNINSURED MOTORIST.

 

Benefit                                                The money to be paid by an insurance company under the terms of the insurance policy.

 

Beneficiary                                        The person(s) named in the policy to receive the life insurance proceeds upon the death of the insured.

 

Binder                                                 A legal agreement between an insurance buyer and an insurance company or its agent. it provides temporary insurance coverage until a policy is either issued or refused.

 

Blanket Policy                                    A policy that covers a group of people ( such employees of the same company) or several properties of exposures (kinds of possible losses) under a single contract.

 

Bodily Injury                                                                            Injury to the body of a person as specifically defined in an insurance policy. Bodily injury liability is the legal responsibility for medical and related cost that may result from injury to the life or health of another person.

 

Cancellation                                       The termination of an insurance policy either by the insured party or the insurance company, before its normal expiration date. A cancelable policy includes a provisions the the contract can be terminated by either party upon notice to the other. By contrast, a non-cancelable policy cannot be canceled by the insurance company during its specified term. (unless non-payment of premium)

 

Carrier                                               A trade term for an insurance company.

 

Cash (Surrender) Value                    The amount that is available in cash for loans and that may be available for withdrawals. Accessing Cash Surrender Value may reduce the death benefit and may increase the risk of lapse.

 

Claim                                                  A demand for payment by a policyholder to an insurance company, or by an injured party to the policyholder, for recovery of a loss.

 

Clause                                                 A section of a policy which deals with a particular subject, such as coinsurance clause.

 

Collision Coverage                            Insurance against a loss resulting from damage to the covered auto through collision with another object or upset of the auto.

 

Comprehensive Coverage                 Covers damage to the auto not resulting from collision. For example: an auto is parked near a building being painted and becomes splattered with paint. Most claims paid under this coverage are for fire, theft and windshield breakage.

 

Conditions                                          The part of an insurance policy that spells out the responsibilities of the policyholder and the insurance company.

Convertible Term Insurance            Term insurance which can be exchanged (converted), at the option of the policyowner and without evidence of insurability, for a permanent insurance policy.

 

Coverage                                            The guarantee to pay if specific losses occur, according to the terms of the insurance policy.

 

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