Glossary
A comprehensive glossary of insurance terms is beyond the scope and purpose of the present document - however, certain key terms are listed here:
- Actuary
- An individual who determines the statistical probability of the incidence and cost of loss
- Annuity
- Payments made in installments over time, most commonly in settlement of a life insurance policy
- Aggregate
- Indicates that amounts paid over time: they are considered parts of a sum rather than independently
- Cancellation
- Voiding a contract immediately, regardless of the terms of the contract. This differs from refusing to renew a policy.
- Claim
- A demand from an insured (or other individual) for payment according to the terms of a policy
- Claimant
- A person making a claim. They may be a policyholder, and insured, or a third party.
- CQV
- The individual whose death results in a life insurance settlement. This may not be the policyholder. This term is to be preferred, as it is more specific and is considered more polite than certain alternatives.
- Coverage
- The language of a policy that describes the terms of indemnity against a specific loss.
- Coverage Limits
- An amount sated in the policy as the most the insurer will be required to pay for loss.
- Event
- Refers to the occurrence that educed a loss (a fire, an accident a theft, etc.) as differentiated from the item
- Indemnity
- Restitution for a loss. This term is generic, as it may include replacement or repair in lieu of a cash settlement.
- Insurance
- Used in a general sense to refer to anything related to the business: the policy, the coverage provided, the payments received, the parties, etc. Make a habit of avoiding its use unless your intention is to be vague or general.
- Insured
- A person (or legal entity) whose loss is covered by the terms of a policy. This may be the policyholder, a named insured, or a person who is identified other than by name.
- Insurer
- The company that provides coverage by the terms of a policy and is responsible for indemnity in the event of a loss
- Liability
- Remuneration sought by one person from another, justified by damage suffered through fault (action or negligence) of the other party. The acid test is whether an insured may be sued for damages by another party.
- Loss
- An incident that caused a decrease in value. This is a generic term that subsumes both the cause and object.
- Named Insured
- An individual explicitly named in the policy as covered by its terms. They are not party to the contract agreement, and may not be bound by it.
- Payment
- A transaction involving money. The term is generic and may include payments from any party, to any party, for any reason. Avoid using it as a synonym for a settlement.
- Policy
- A contract (usually a writ) that describes the terms of an arrangement between insurer and insured.
- Policyholder
- The person who signed the policy, and is bound by the agreement.
- Premium
- The amount of money paid by the insured to obtain coverage from an insurer.
- Rate
- Generally a synonym for premium, but it often refers to the ratio of premium-to-coverage when comparing insurer's prices. Use only when making comparisons between policies or insurers.
- Settlement
- Actions taken by an insurer (money paid, services arranged, etc.) in satisfaction of a claim. This is the preferred term unless the nature of the settlement is known.
- Subrogation
- An insurer pays the insured for a loss, then attempts to collect from other parties (in particular, other insurance companies)
- Terms
- The specific, documented conditions of the insurance policy agreement
- Underwrite
- An agreement to shield another party against risk by agreeing to provide indemnification against a loss