A Quick Glossary of Insurance

The purpose of this information is to demystify some of the terms used in the insurance world, be it for home, auto or life. These terms are used often in different policies across different insurance companies and will help you control the outcome of any particular issue or claim.

Agent 

An agent is someone who is authorized by and on the behalf of an insurance company that issues insurance policies for general public. Agents are licensed according to the laws of the state in which they like to do business. The agent offers different insurance policies for different reasons as requested by customers and is the point of contact for claims, issues and questions.

Admitted Insurer 

An admitted insurer is an individual or company allowed to do business in the insurance field within a specific state. If that insurer is operating without being admitted, then those policies are said to be issued by a “non-admitted” insurer. And those policies are not protected by that state’s insurance guaranty fund.

Appraisal

This term often appears in the loss settlement part of the insurance policies. It is the contractual arbitration provision that is aimed at resolving loss or disputes between insurer, insured or any third party. This usually happens when property is damaged.

Bodily Injury 

This comes under the liability coverage of an insurance policy. It is one of the categories of injury to which full coverage applies. When a person is injured physically, the insurance policy covers for the person’s medical, transportation and other bills related to injuries. Whether or not emotional distress or other loss beyond physical injuries is covered depends on what is specified under this clause.

Cancellation

The termination of coverage specified in the insurance policy, by either the insurance subsidiary or the insured. Many states have their own rules on when and how a policy can be terminated. Most insurers do not allow terminating a policy midterm. However, circumstances and conditions may change and termination may sometimes become inevitable. When this happens, the insurer may impose a certain amount of penalty on the insured.

Comprehensive

Apart from the basic coverage, there are certain items that need coverage, that fall under comprehensive coverage. Some insurers may limit what is covered under comprehensive coverage. Unless excluded, almost all physical loss due to unexpected incidents are covered.

Declarations

This is the portion of the policy that identifies the policy to the insured. This page shows who the insurer is, brief details of what is covered and how much the insurer will pay in times of loss. It also includes other information like the indirect items that are covered as well as the address and contact information of the insured.

First Party Insurance and Underwriting  

Insurance in which the insurer is obligated to make payment to the insured and not to someone who is not a part of the contract. Here, the covered items to be eligible for payment should be owned and operated directly by the insured. Underwriting is a process in which the insurer evaluates the coverage and risk to calculate premium to be charged to the insured.

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