Glossary of Terms

Below is a list of just a few of the insurance terms you may come across in your experience with purchasing and holding any type of insurance claim. If you have a question about a term below or need clarification, please contact us.

A

Agent: An individual who sells insurance policies.
Assets: All property available for the payment of debts, esp. of a bankrupt or insolvent firm or person.

B

Benefit Period: The number of days for which benefits are paid to the named insured and his or her dependents.

C

Claim: A request or demand for payment in accordance with an insurance policy, a workers' compensation law, etc.
Co-payment: A flat fee that an individual pays for health-care services rendered> This fee is in addition to what insurance covers.

D

Deductible: Amount of loss the insured is required to pay before the insurance company will make a payment.
Dividend: A distribution to a policyholder of a portion of the premium not needed by the company to pay claims or to meet expenses.

E

Elimination Period: The time which passes after filing a claim before policyholder can collect insurance benefits. Also known as "waiting period."

G

Grace Period: A period of time after a payment becomes due, as of a loan or life-insurance premium, before one is subject to penalties or late charges or before the loan or policy is canceled.

H

Health Maintenance Organization (HMO): A plan for comprehensive health services, prepaid by an individual or by a company for its employees, that provides treatment, preventive care, and hospitalization to each participating member in a central health center.

I

Indemnity: Protection, as by insurance, from liabilities or penalties incurred by one's actions.

L

Liability: Moneys owed; debts.
Loss Ratio: The ratio of incurred losses and loss-adjustment expenses to net premiums earned. This ratio measures the company's underlying profitability, or loss experience, on its total book of business.

N

Net Premium: Amount required to pay the insurance liability on its becoming due without paying any expenses or contingent charges.

O

Occurrence: An event that results in an insured loss.

P

Policy: The written contract or course of action effecting insurance and including all clause, riders, endorsements, and papers attached.
Premium: The price of insurance protection for a specified risk for a specified period of time.

R

Risk Management: Assessing, recognizing, minimizing and preventing accidental loss.

T

Total Loss: A sufficient size loss that it has no value left; the complete destruction of the property.

Some of the above definitions were taken from www.dictionary.com.