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The Complete Dictionary of Insurance Terms Explained Simply

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The Complete Dictionary of Insurance Terms Explained Simply

by Melissa Samaroo

4.5 out of 5

Language	:	English
File size	:	790 KB
Text-to-Speech	:	Enabled
Screen Reader	:	Supported
Enhanced typesetting	:	Enabled
Word Wise	:	Enabled
Print length	:	338 pages

Navigating the world of insurance can be a daunting task, especially when faced with a plethora of unfamiliar terms and jargon. To help you overcome this challenge, we have compiled a comprehensive dictionary of essential insurance terms, providing clear and concise explanations that will empower you to understand your policies and make informed decisions.

A

Actuary: A professional who uses mathematical and statistical techniques to assess risk and determine insurance premiums.
Adjustable rate mortgage (ARM): A type of mortgage with an interest rate that can fluctuate based on market conditions.
Agent: A representative of an insurance company who sells and services insurance policies.
Annuity: A contract that provides regular payments to an individual for a specified period or for the rest of their life.

B

Beneficiary: The person or entity who receives the proceeds of an insurance policy.
Binder: A temporary agreement that provides coverage until a formal policy is issued.
Broker: An independent agent who represents multiple insurance companies and helps clients find the best coverage for their needs.

C

Casualty insurance: Insurance that covers losses or damages caused by accidents, such as car crashes or property damage.
Claim: A request for payment from an insurance company under a policy.
Coinsurance: A provision in an insurance policy that requires the policyholder to pay a percentage of the loss.
Collision coverage: Insurance that covers damages to your own vehicle in a car accident.
Comprehensive coverage: Insurance that covers damages to your vehicle from events other than collisions, such as theft, vandalism, or natural disasters.
Consequential loss: A loss that indirectly results from a covered event, such as loss of income due to property damage.
Contingency insurance: Insurance that covers unforeseen events or expenses.
Coverage: The specific risks or losses that an insurance policy protects against.
Deductible: The amount of money that the policyholder must pay out-of-pocket before insurance coverage kicks in.
Disability insurance: Insurance that provides income replacement if you are unable to work due to illness or injury.
Dividend: A payment made to policyholders by mutual insurance companies.

E

Endorsement: A modification or addition to an insurance policy.
Excess insurance: Insurance that provides coverage above the limits of a primary policy.
Exclusion: A specific event or risk that is not covered by an insurance policy.

F

Face amount: The maximum amount payable under an insurance policy.
Federal flood insurance: Insurance provided by the government for flood damage.
Fidelity bond: Insurance that protects businesses against financial losses caused by employee theft or fraud.
Fire insurance: Insurance that covers losses or damages caused by fire.
Flood insurance: Insurance that covers losses or damages caused by flooding.

G

Grace period: A short period after a premium payment due date during which coverage remains in effect.
Group insurance: Insurance that is provided to a group of people, such as employees of a company.

H

Hazard: A potential event or condition that could cause a loss.
Health insurance: Insurance that covers medical expenses.
Homeowners insurance: Insurance that covers losses or damages to your home and personal belongings.

I

Indemnity: The principle that an insurance company will restore the policyholder to their financial position before the loss occurred.
Individual insurance: Insurance that is purchased by an individual, as opposed to a group.
Insurance policy: A contract between an insurance company and a policyholder that outlines the terms of the coverage.
Insurer: An insurance company that issues insurance policies.

L

Liability insurance: Insurance that covers financial losses caused by your actions or negligence.
Life insurance: Insurance that provides a death benefit to beneficiaries.
Loss: The financial or physical damage that is covered by an insurance policy.
Loss adjustment: The process of determining the amount of an insurance claim.

M

Malpractice insurance: Insurance that protects professionals, such as doctors and lawyers, against liability for errors or negligence.
Medical payments coverage: Insurance that covers medical expenses for you and others involved in an accident, regardless of who is at fault.
Mortgage insurance: Insurance that protects the lender in the event that a borrower defaults on their mortgage.
Mutual insurance company: An insurance company that is owned by its policyholders.

P

Peril: An event or condition that could cause a loss, such as fire, theft, or storm damage.
Personal property insurance: Insurance that covers your personal belongings, such as clothing, furniture, and electronics.
Premium: The amount of money that you pay to an insurance company for coverage.
Primary insurance: Insurance that provides coverage for the first layer of losses.
Proceeds: The amount of money that is paid out by an insurance company after a claim has been approved.

R

Reinsurance: Insurance that an insurance company purchases to protect itself against large or catastrophic losses.
Rider: An optional addition to an insurance policy that provides additional coverage.
Risk: The potential for financial loss or damage.
Risk management: The process of identifying, assessing, and mitigating risks.