Glossary

Auto Insurance

Accident Forgiveness: A feature that provides forgiveness for one accident over a specified period to help protect the insured from a premium increase due to an accident.
Actual Cash Value (AVC): The value of your damaged or stolen property, based on the current cost to replace it, minus the depreciation value of said property.
Bodily Injury Liability (BI): Protects the insured for injuries or death to another party that they are legally liable for resulting from an auto accident; covers the loss incurred and provides coverage for legal defense in the event of a lawsuit; Per Person/ Per Occurrence.
Cancellation: Refers to the termination of an insurance policy before the policy’s expiration due to the insured’s request, non-payment of premium, misrepresentation, or additional underwriting reasons.
Collision: Provides coverage for the insured’s vehicle if it collides with another vehicle, flips over, or collides with another object (excluding animals) at either replacement cost (New Car Replacement optional) or actual cash value and is subject to a deductible; carriers normally require Comprehensive (other than Collision) to purchase and covers equipment that is permanently attached to your vehicle.
Comprehensive (Other than Collision): Provides coverage for damage to the insured’s vehicle from fire, theft, windstorm, vandalism, flood, falling object, or colliding with an animal and is subject to a deductible; referred to as an act of God.
Declarations Page: Also known as, “Dec Page”, is a document that outlines everything regarding the named insured’s policy such as who is insured, what is insured, specific information regarding coverages, and the policy terms and conditions.
Endorsement or Rider: An agreement attached to an insurance policy that adds or subtracts insurance coverage.
Five-Year Accident-Free Good Driver Discount: A discount applied to an auto insurance policy when the named insured has been claims-free and maintained a clean driving record for up to 5 years.
Forced Placement: If a vehicle is financed or leased, the lender or lessor will require physical damage protection for the vehicle (Comprehensive and Collision). If you do not insure the car, the lender may buy the insurance and add the cost to the vehicle loan. However, this protects the lender if the vehicle is damaged and does not protect yourself.
Guaranteed Asset Protection (GAP) Coverage: Pays the difference between an insurance company’s payment for a totaled vehicle and the balance of a vehicle loan which is usually purchased when an individual is buying a new vehicle.
Insured: The person, entity, and/or property covered by an insurance policy.
Loan/Lease Gap Insurance: Pays the difference between the actual cash value of the insured’s vehicle and the unpaid balance of the insured’s loan or lease if the vehicle is totaled due to a covered loss; usually available through the finance or leasing company at the time of vehicle purchase.
Medical Payments: Provides coverage for reasonable and necessary medical expenses and funeral expenses incurred because of bodily injury from an auto accident, not covered by PIP for the insured or passenger(s) and can be used to cover health insurance deductible(s) or co-pay.
Named Driver Exclusion: A provision or endorsement on your policy that excludes drivers by name from coverage.
Named Operator (Non-Owner’s) Policy: An insurance policy designed for individuals who need liability coverage, but do not own a car. It provides coverage when the named insured rents or borrows another party’s vehicle. Typically, individuals who need this type of policy are those who are required by their employer to satisfy an SR-22 or FR-44.
Negligence: When an incident or accident is caused by the named insured due to their own carelessness or fault.
New Car Replacement: Covers the cost of a new vehicle of the same make and model, minus the applicable deductibles, if the insured’s vehicle is totaled in a covered loss.
No-Fault Insurance: Refers to Personal Injury Protection (PIP), which covers the insured and relatives for hospital and medical expenses resulting from an accident, income losses, and funeral expenses (Death Benefits), regardless of who’s at fault.
Non-Renewal: Refers to the insurance carrier ceasing to provide coverage to the named insured once the policy has expired, either due to the insurance carrier ceasing to do business in the state, limiting business, excess claims, misrepresentation, or other underwriting reasons.
Optional Basic Economic Loss (OBEL): Consists of medical expenses, work loss, other expenses, and, when death occurs, a death benefit as herein provided. Except for such death benefits, the basic economic loss shall not include any loss sustained on account of death; only be used after PIP benefits are exhausted.
Property Damage Liability (PDL): Pays for the damages to another party’s property incurred in an auto accident caused by the insured or another party (with permission) operating the insured’s vehicle; commonly used to repair another’s party’s vehicle or damage to street signs, mailboxes, buildings, or other property owned by another party.
Personal Injury Protection (PIP): Covers the insured and relatives for hospital and medical expenses resulting from an accident, income losses, and funeral expenses (Death Benefits), regardless of who’s at fault.
Rental Reimbursement (Extended Transportation Expenses): Provides coverage for the cost of renting a replacement vehicle in the event of a covered loss up to a specified limit of the insured’s policy; the carrier may pay for the rental vehicle in advance or require receipts for reimbursement; optional coverage that usually requires Comprehensive and/ or Collision coverage to be purchased.
Subrogation: The legal right of insurance companies to pursue another person’s insurance company after the other person caused a loss to their policyholder. This is usually done to get back any money the insurance company paid for a claim.
Telematics: Monitoring technology either in the form of a plug-in device or mobile app that monitors the insured’s driving habits such as mileage, speed, braking, total driving time, as well as where and when you drive to help determine the insured’s insurance premium. Typically provides a participation discount and based on the insured’s performance, could either increase or decrease their rate.
Towing and Labor (Road Service): Provides coverage for emergency road service and towing up to the limits of the insured’s policy. Usually covers if the insured’s vehicle has a flat tire, runs out of gas, or has a mechanical problem up to the limits of the policy.
Uninsured/ Underinsured Motorist (UM/ UIM): Provides coverage to the insured or passengers who sustained injuries from an auto accident by an uninsured or underinsured motorist; allows the insured to collect additional amounts from their carrier; provides additional benefits for medical expenses, lost wages, pain and suffering, and other expenses; Hit-and Run accidents; Per Person/Per Occurrence.
Uninsured Motorist Bodily Injury – Pays for the insured or passenger(s) for medical bills, lost wages, and pain suffering.
Uninsured Motorist Property Damage – Pays for the repair to the insured’s vehicle or other property damaged during the accident; may be subject to a deductible.
Uninsured Motorists Stacked Coverage – Allows the insured to combine and create a higher limit of coverage for UM based on the number of vehicles on the policy and is subject to higher premiums.
Uninsured Motorists Non-Stacked Coverage – Opposite of Stacked Coverage and limits UM coverage to a single limit regardless of the number of vehicles on the policy.

Home Insurance

Homeowners Insurance Premium: The amount of money paid by the policyholder to the insurance company to maintain coverage.
Dwelling Coverage: Protection for the structure of the home, including the roof, walls, and foundation.
Personal Property Coverage: Insurance that covers the policyholder’s personal belongings, both inside and outside the home.
Liability Insurance: Coverage that pays for legal expenses and damages when someone is injured on the policyholder’s property.
Medical Payments Coverage: Insurance that pays for medical expenses for someone injured on the policyholder’s property, regardless of fault.
Additional Living Expenses (ALE) Coverage: Reimbursement for expenses the policyholder incurs when temporarily unable to live in their home due to a covered loss.
Scheduled Personal Property: An optional endorsement for insuring high-value items like jewelry, art, or collectibles.
Loss of Use Coverage: A component of homeowners insurance that covers living expenses when the home is uninhabitable due to a covered loss.
Actual Cash Value (ACV): The value of property, accounting for depreciation, at the time of the loss.
Replacement Cost: The amount required to replace or repair property at current market prices without depreciation.
Exclusion: Specific events or circumstances not covered by a homeowners insurance policy.
Endorsement/Rider: An optional addition to a homeowners insurance policy that provides additional coverage or modifies existing terms.
Claim: A request made by the policyholder to the insurance company for compensation or benefits following a covered incident.
Policy Limits: The maximum amount that a homeowners insurance policy will pay for a covered claim.
Home Inventory: A detailed list of a policyholder’s personal belongings, used to estimate the value of personal property for coverage purposes.
Named Perils: A homeowners insurance policy that covers only specific perils explicitly listed in the policy.
Underinsured Coverage: Coverage that protects the policyholder when the at-fault party in an accident doesn’t have enough insurance.
Appraisal: An assessment of the value of the insured property, often used for high-value homes.
Independent Insurance Agent: A licensed insurance professional who represents multiple insurance companies and can help customers find the right policy.
Loss Adjuster: A representative of the insurance company responsible for evaluating and settling homeowners insurance claims.
Flood Insurance: A separate policy or endorsement to cover damage from flooding, typically not included in standard homeowners insurance.

Umbrella/Excess Liability Insurance

Umbrella Insurance Policy: An extra layer of liability coverage that extends beyond the limits of an underlying policy, such as auto or homeowners insurance.
Liability Insurance: Coverage that pays for damages or injuries for which the policyholder is legally responsible.
Policy Limit: The maximum amount an umbrella insurance policy will pay out for a covered claim.
Underlying Policy: The primary insurance policy, such as auto or homeowners insurance, on which the umbrella policy builds.
Excess Liability Coverage: Another term for umbrella insurance, emphasizing that it provides additional coverage over and above the underlying policy.
Aggregate Limit: The maximum amount an umbrella policy will pay for all covered claims within a policy period.
Per Occurrence Limit: The maximum amount an umbrella policy will pay for a single covered claim.
Advertising Injury: Coverage for claims related to advertising, such as copyright infringement or libel.
Named Insured: The primary policyholder, typically the person or entity that purchases the umbrella policy.
Excluded Activities: Specific activities or situations not covered by the umbrella policy.
Underlying Insurance Requirements: The minimum coverage limits and types required on the underlying policies to be eligible for umbrella insurance.
Defense Costs: Legal fees, court costs, and other expenses related to defending a covered claim.
Incident Report: A document filed with the insurance company to notify them of a potential claim or incident.
Loss Control: Measures or strategies to prevent or reduce potential risks and claims.

Commercial Insurance

Additional Insured: Is an endorsement which extends liability insurance coverage from the named insured’s policy to include either a person, group, organization or location. This endorsement protects the additional insured under the named insured’s policy in the event of a liability claim from a third-party.
Any Auto Coverage: Is an endorsement which extends liability coverage to hired, non-owned, scheduled autos and vehicles that are purchased during the policy period.
Business Owner Policy (BOP): Combines general liability insurance with commercial property insurance into one package and helps protect your business from property damage, business interruption, and liability resulting from bodily injury, property damage, personal injury or advertising injury.
Certificate of Insurance (COI): Also known as “Certificate of Liability”, a COI is a document from an insurer which provides a summary of liability coverages for a business to show that a named insured has business insurance in place.
Commercial Auto Insurance: A business insurance policy that applies to autos owned by or used in the course of the named insured’s business which applies physical damage, liability and other coverages in the event of accidents involving these scheduled or non-owned auto. These auto’s included vehicles that are owned, leased, borrowed, or rented.
Commercial Property Insurance: Provides coverage for physical assets and property owned by a business. This can include buildings, equipment, inventory, furniture, and other assets. The purpose of commercial property insurance is to protect businesses from financial losses that may result from damage or loss of these assets due to various events, such as fires, storms, theft, or vandalism.
Cyber Liability Insurance: Cyber liability insurance provides business liability coverage for cyber attacks, data breach, and damages involving personally identifiable information (PII) such as their name, social security number, date of birth, credit card numbers, account numbers, driver’s number, etc.
Excess Liability Insurance: As the name suggests, excess liability insurance provides additional coverage limits in excess of a business’s underlying liability policy, such as a general liability insurance or commercial auto insurance. It offers additional policy protection by offering higher liability limits if a claim exceeds the limit of the underlying liability policy.
General Liability: General liability insurance is a type of insurance coverage that provides protection against a variety of claims, including bodily injury, property damage, personal injury, and other related risks. It is a foundational coverage for many businesses, offering financial protection in case the business is sued for negligence or other covered events.
Hired Auto Coverage: Is an endorsement which extends liability coverage when the named insured or employees operate either a rented, lease, or borrowed car in conjunction with the business.
Inland Marine: Provides coverage to both owned and rented equipment that is used by the named insured or employees in conjunction with job and provides protection in the event of theft, damage, and loss for equipment while it is in transit or away from the business’s premises.
Loss Runs: Are reports that provide a detailed history of insurance claims filed by the business which includes information such as the date of the accident or incident, nature of the claim, and the amounts paid out by the insurance company for each claim. Loss runs are used by insurance companies to assess the risk associated with insuring a business and is used to determine eligibility and premium.
Non-Owned Auto Coverage: Is an endorsement which extends liability coverage when employees of the named insured’s business use their own vehicles in conjunction with the business.
Professional Liability Insurance (E&O Insurance): Also known as “Errors and Omissions Insurance”, protects your business in the event of a lawsuit due to negligence or mistakes by the named insured or employees while performing a professional service.
Waiver of Subrogation: Is an endorsement which relinquishes the insurer’s right of recovery from a negligent third party as a result of a paying claim on the named insured’s behalf.
Workers’ Compensation: Workers’ compensation insurance is another type of insurance that focuses specifically on providing benefits to employees who are injured or become ill as a result of their work. The goal is to protect both the employer and the employee by covering medical expenses, rehabilitation costs, and a portion of the employee’s lost wages.