A-Share Variable Annuity
A form of variable annuity contract where the contract holder pays sales charges up front rather than eventually having to pay a surrender charge.
Accelerated Death Benefits
A benefit that can be attached to a life insurance policy that enables the policy holder to receive cash advances against the death benefit in the case of being diagnosed with a terminal illness. Many individuals who choose the accelerated death benefit have less than one year to live and use the money for treatments and other costs needed to stay alive.
An unexpected, unforeseen event not under the control of an insured and resulting in a loss.
In most states, customers who have not had an at-fault accident in the previous five years qualify for this program. Accident forgiveness means that some insurance carriers won’t add a surcharge to your premium after your next at-fault accident.
The number of times an accident occurs. Used by actuaries to predict losses and appropriately base premiums.
Accidental Death Benefit (ADB)
A supplementary life insurance policy benefit that provides a death benefit in addition to the policy’s basic death benefit if the insured’s death occurs as the result of an accident.
Coverage for accidental injury, accidental death, and related health expenses. Benefits will pay for preventative services, medical expenses, and catastrophic care, with limits.
Act of God
Natural occurrence beyond human control or influence. Such acts of nature include hurricanes, earthquakes, and floods.
Actual Cash Value
The fair market value of property; technically, replacement cost less depreciation.
An insurance professional skilled in the analysis, evaluation, and management of statistical information. Evaluates insurance firms’ reserves, determines rates and rating methods, and determines other business and financial risks.
Additional Insured or Additional Interest
A person or an organization, other than the named insured or covered person, who is protected under the named insured’s auto policy. If an auto is leased, the leasing company may want to be listed as an Additional Insured as well as a lien holder or loss payee. This protects the leasing company if it’s named in a lawsuit for an accident caused by a policyholder.
Additional Living Expenses
Extra charges covered by homeowners policies over and above the policyholder’s customary living expenses. They begin when the insured requires temporary shelter due to damage by a covered peril that makes the home temporarily uninhabitable.
An individual employed by a property/casualty insurer to evaluate losses and settle policyholder claims. These adjusters differ from public adjusters, who negotiate with insurers on behalf of policyholders, and receive a portion of a claims settlement. Independent adjusters are independent contractors who adjust claims for different insurance companies.
Assets recognized and accepted by state insurance laws in determining the solvency of insurers and reinsurers. To make it easier to assess an insurance company’s financial position, state statutory accounting rules do not permit certain assets to be included on the balance sheet. Only assets that can be easily sold in the event of liquidation or borrowed against, and receivables for which payment can be reasonably anticipated, are included in admitted assets.
An insurance company authorized to do business in the state.
Term used to refer to the other party’s insurance company.
The tendency of those exposed to a higher risk to seek more insurance coverage than those at a lower risk.
Parts or accessories that are not a part of the original factory installed parts.
Agency Management System
A Management Systems is systematic framework designed to manage an organization’s policies, procedures and processes to ensure that the it can fulfill all tasks required to achieve its objectives. Visit Agency Matrix’s website for more information.
An individual who acts as a representative for the company and sells insurance, usually on a commission basis. This individual could be an ‘exclusive’ or ‘non-exclusive’ agent.
The price or cost of repairs agreed to by the Auto Damage adjuster or independent appraiser and the body shop representative.
Alien Insurance Company
An insurance company incorporated under the laws of a foreign country.
Property insurance that is usually bought in conjunction with fire insurance; it includes wind, water damage, and vandalism coverage.
Alternative Dispute Resolution/ADR
Alternative to going to court to settle disputes. Methods include arbitration, where disputing parties agree to be bound to the decision of an independent third party, and mediation, where a third party tries to arrange a settlement between the two sides.
Mechanisms used to fund self-insurance. This includes captives, which are insurers owned by one or more non-insurers to provide owners with coverage. Risk-retention groups, formed by members of similar professions or businesses to obtain liability insurance, are also a form of self-insurance.
A change to the basic policy contract. An amendment alters the policy; an endorsement adds to it.
Annual Annuity Contract Fee
Covers the cost of administering an annuity contract
Summary of an insurer’s or reinsurer’s financial operations for a particular year, including a balance sheet. It is filed with the state insurance department of each jurisdiction in which the company is licensed to conduct business.
The person(s) who receives the income from an annuity contract. Usually the owner of the contract or his or her spouse.
The conversion of the account balance of a deferred annuity contract to income payments.
A life insurance product that pays periodic income benefits for a specific period of time or over the course of the annuitant’s lifetime. There are two basic types of annuities: deferred and immediate: Deferred annuities allow assets to grow tax deferred over time before being converted to payments to the annuitant. Immediate annuities allow payments to begin within about a year of purchase.
Annuity Accumulation Phase or Period
The period during which the owner of a deferred annuity makes payments to build up assets.
Annuity Administrative Charges
Covers the cost of customer services for owners of variable annuities.
In certain types of annuities, a person who receives annuity contract payments if the annuity owner or annuitant dies while payments are still due.
A written agreement between an insurance company and a customer outlining each party’s obligations in an annuity coverage agreement. This document will include the specific details of the contract, such as the structure of the annuity (variable or fixed), any penalties for early withdrawal, spousal provisions such as a survivor clause and rate of spousal coverage, and more.
Annuity Contract Owner
The person or entity that purchases an annuity and has all rights to the contract. Usually, but not always, the annuitant (the person who receives incomes from the contract).
Annuity Death Benefits
The guarantee that if an annuity contract owner dies before annuitization (the switchover from the savings to the payment phase) the beneficiary will receive the value of the annuity that is due.
Annuity Insurance Charges
Covers administrative and mortality and expense risk costs.
Annuity Investment Management Fee
The fee paid for the management of variable annuity invested assets.
The insurance company that issues the annuity.
Legal document providing detailed information about variable annuity contracts. Must be offered to each prospective buyer.
Annuity Purchase Rate
The cost of an annuity based on such factors as the age and gender of the contract owner.
Anti-Lock Braking system (ABS)
A computer-controlled high pressure system that assists the vehicle’s normal braking system. ABS allows all wheels to slow at the same rate, thereby preventing loss of control.
Devices designed either to reduce the chance an auto will be vandalized or stolen, or assist in its recovery. Examples include car alarms, keyless entry, starter disablers, motion detectors, parts of the vehicle etched with the Vehicle Identification Number, and recovery systems.
Laws that prohibit companies from working as a group to set prices, restrict supplies or stop competition in the marketplace. The insurance industry is subject to state antitrust laws but has a limited exemption from federal antitrust laws. This exemption, set out in the McCarran-Ferguson Act, permits insurers to jointly develop common insurance forms and share loss data to help them price policies.
A signed statement by a prospective insured requested insurance. This can be signed electronically.
The dividing of a loss proportionately among two or more insurers that cover the same loss.
Process that determines the value of property, or the extent of damage, usually performed by an impartial expert.
A process of settling a dispute through an impartial party. It is used as an alternative to litigation.
The deliberate setting of a fire.
Bonds that represent pools of loans of similar types, duration and interest rates. Almost any loan with regular repayments of principal and interest can be securitized, from auto loans and equipment leases to credit card receivables and mortgages.
Property owned, in this case by an insurance company, including stocks, bonds, and real estate. Insurance accounting is concerned with solvency and the ability to pay claims. State insurance laws therefore require a conservative valuation of assets, prohibiting insurance companies from listing assets on their balance sheets whose values are uncertain, such as furniture, fixtures, debit balances, and accounts receivable that are more than 90 days past due.
A driver or vehicle owner who cannot qualify for insurance in the regular market. He or she must get coverage through a state assigned risk plan which specifies that each company must accept a proportionate share of these drivers/owners.
Assigned Risk Plans
Facilities through which drivers can obtain auto insurance if they are unable to buy it in the regular or voluntary market. These are the most well-known type of residual auto insurance market, which exist in every state. In an assigned risk plan, all insurers selling auto insurance in the state are assigned these drivers to insure, based on the amount of insurance they sell in the regular market.
Means the same as an insured, policyholder, or someone who has an insurance policy.
The party that is legally liable for the damages in an accident.
Auto Damage Adjuster
The auto damage adjuster is responsible for writing the repair estimate for your vehicle. This adjuster will also answer your questions about the repair process, your rental vehicle, or your total loss settlement.
Auto Damage Division
Division of a claims department that handles auto claims.
Auto Insurance Policy
There are basically six different types of coverages. Some may be required by law. Others are optional. They are:
1. Bodily injury liability, for injuries the policyholder causes to someone else.
2. Medical payments or Personal Injury Protection (PIP) for treatment of injuries to the driver and passengers of the policyholder’s car.
3. Property damage liability, for damage the policyholder causes to someone else’s property.
4. Collision, for damage to the policyholder’s car from a collision.
5. Comprehensive, for damage to the policyholder’s car not involving a collision with another car (including damage from fire, explosions, earthquakes, floods, and riots), and theft.
6. Uninsured motorists coverage, for costs resulting from an accident involving a hit-and-run driver or a driver who does not have insurance.
Auto Insurance Premium
The price an insurance company charges for coverage, based on the frequency and cost of potential accidents, theft and other losses. Prices vary from company to company, as with any product or service.
Premiums also vary depending on the amount and type of coverage purchased; the make and model of the car; and the insured’s driving record, years of driving and the number of miles the car is driven per year. Other factors taken into account include the driver’s age and gender, where the car is most likely to be driven and the times of day – rush hour in an urban neighborhood or leisure-time driving in rural areas, for example. Some insurance companies may also use credit history-related information
Auto Repair/Claim Repairs
Insurance carriers have programs that maximize convenience when you have an auto insurance claim. It allows you to complete your vehicle’s repair process at one location. Rental vehicle arrangements are available on-site through a rental car agency.
The theft of an auto is a type of loss that is covered under comprehensive coverage.
A form of insurance that protects against losses involving autos. Auto insurance provides protection from losses resulting from owning and operating an auto. The insurance covers losses to the insured’s property and losses for which the insured is liable as a result of owning or operating an auto. (See Car Insurance)
Automobile Insurance Plans
The name for “assigned risk” plans. These are plans set up and monitored by the state to help people who are unable to secure auto insurance through standard insurance carriers. See Assigned Risk.
Automobile Insurance Premium Discounts
A discount offered to drivers for such safeguards as air bags, seat belts, good driving record, anti-theft devices, multiple vehicles, training courses, good grades, group membership, employment or degrees, pre-purchasing, low mileage, and renewal or prior insurance.
Commercial airlines hold property insurance on airplanes and liability insurance for negligent acts that result in injury or property damage to passengers or others. Damage is covered on the ground and in the air. The policy limits the geographical area and individual pilots covered.