Actual Cash Value
The current monetary value of property, calculated by determining its replacement cost and subtracting depreciation resulting from wear, tear, and obsolescence.
Actuary
An expert who applies probability and statistical methods to solve insurance-related issues, such as calculating premiums, assessing reserves, and predicting financial outcomes over short and long-term periods.
Additional Insured
An individual or entity, other than the primary policyholder, who receives coverage under an insurance policy for certain losses.
Agent
A representative of an insurance company responsible for negotiating, maintaining, or executing insurance policies on behalf of the insurer.
Aggregate
The total maximum amount an insurance company will pay for claims during a specified policy period.
All Risk Insurance
A type of insurance policy that provides coverage for any loss or damage unless specific perils are excluded by the terms of the policy.
Allied Lines
Insurance products related to property coverage, which may include protections against events like earthquakes, sprinkler damage, or business interruption.
Application
A document used by an individual or business seeking insurance, detailing their operations and requesting specific types and amounts of coverage.
Appraisal
An assessment of the quantity, quality, or value of something, often used in the context of evaluating property or loss for insurance purposes.
Arbitration
A process where a neutral third party, chosen by both the insurer and the policyholder, reviews a dispute regarding loss amounts and issues a binding decision.
Attractive Nuisance
A hazardous object, condition, or location that is particularly appealing to children, for which property owners may be held liable if they do not take reasonable steps to prevent injury.
Audit
An evaluation of a policyholder’s records to determine the actual exposures and adjust the premium accordingly.
Aviation Insurance
Coverage that protects against losses resulting from accidents involving domestic commercial aircraft.
Benefits
The amount of money provided by an insurance policy to cover specific losses as defined in the terms of the contract.
Binder
A temporary agreement providing insurance coverage while the formal policy is being prepared.
Blanket Coverage
A single insurance limit that applies to multiple properties, locations, or items within a policy.
Bodily Injury Liability
Coverage for legal responsibility arising from injury, illness, or disease caused to others, excluding employees, under a liability policy.
Broker
An individual who arranges insurance policies but typically does not directly represent the insurance company; instead, they place coverage based on the client’s preferences.
Burglary
The unlawful entry into another’s premises with the intent to commit a felony, often requiring visible signs of forced entry as defined by specific insurance policies.
Carrier
The insurance company that issues and underwrites the insurance coverage.
Casualty Insurance
Insurance that protects against liabilities or losses caused by accidents, excluding certain risks typically covered by other forms of insurance like fire or marine policies.
Catastrophe
A major, unexpected disaster causing significant financial losses.
Certificate of Insurance
A document that serves as evidence of insurance coverage, usually provided to third parties.
Chartered Property and Casualty Underwriter (C.P.C.U.)
A professional designation awarded to individuals who complete specific coursework and exams in property and casualty insurance.
Claim
A formal request for payment made under an insurance policy, based on a covered loss or event.
Claim Severity
The average monetary cost of individual insurance claims.
Classification
A system used to categorize risks based on factors like business type or location, which helps determine insurance premiums.
Coinsurance
An arrangement in which the insured agrees to cover a certain percentage of the property’s total value in exchange for a reduced premium.
Commercial Lines
Insurance policies designed for businesses, covering property, liability, and other business-related risks.
Commercial Multiple-Line Policy
An insurance package offering broad coverage that includes both property and liability protection for businesses.
Comparative Negligence
A legal doctrine that allocates fault between parties in a negligence case and reduces the plaintiff’s recovery by their percentage of responsibility.
Competitive State Fund
A state-run insurance program that competes with private insurers.
Compulsory Auto Liability Insurance
State laws requiring drivers to carry a minimum amount of liability insurance for injuries or property damage caused by automobile accidents.
Concealment
The act of withholding significant information from an insurer either when negotiating a policy or making a claim.
Consequential Loss
A financial loss indirectly caused by damage to property, such as loss of rental income following damage to a building.
Contract
A legally binding agreement between two or more parties that outlines obligations and duties in exchange for consideration.
Contributory Negligence
A situation where an injured party’s own lack of care contributed to the accident, potentially limiting their ability to recover damages.
Coverage
The protection offered by an insurance policy for specific risks or losses.
Declarations
The section of an insurance policy that outlines key details, such as the insured property, coverage limits, and premiums.
Deductible
The portion of a loss the policyholder is required to pay before the insurer begins to cover the remaining costs.
Depreciation
The reduction in the value of an asset over time due to factors like aging, wear, and tear.
Direct Writer
An insurance company that sells policies directly through its employees or exclusive agents, rather than through independent brokers.
Dividend
A return of part of the premium or profit to policyholders in a mutual insurance company, or a distribution of profits to stockholders in a stock insurance company.
Earned Premium
The portion of an insurance premium that corresponds to the protection provided by the insurer during a specific period.
Employer’s Liability Insurance
Insurance that covers employers against claims for injuries or diseases sustained by employees while working, not covered by workers’ compensation insurance.
Endorsement
A modification added to an insurance policy to change or add specific terms or conditions.
Exclusion
A clause in an insurance policy that specifies risks or losses that are not covered.
Exposure
The potential for loss, often quantified by factors like payroll, location, or the nature of the insured business.
