Insurance Terms
A licensed individual or organization authorized to sell and service insurance policies for an insurance company.
Agent
A clause in an insurance policy that allows the insured and the insurer to each appoint an arbitrator if they cannot agree upon an appropriate claim settlement. Once the arbitrators have been selected, they in turn appoint an independent umpire. If the arbitrators disagree, then the umpire decides which claims settlement to support. The final decision is binding.
Arbitration Clause
A circumstance that increases the likelihood or potential severity oj a loss.
Hazard
The portion of an insurance contract that describes what is covered. The insuring agreement usually states the perils insured against, the person(s) and/or property covered, the property locations, and the period of the contract.
Insuring Agreement
The process of recovering the amount of claim damages paid out to a policyholder from the legally liable party.
Subrogation
A licensed individual or organization who sells and services insurance polices on your behalf.
Broker
A situation that occurs in a loss when an old piece of property is replaced by a brand new item. The insured is put in a better financial position than they were before the loss occurred, and consequentially may have to pay the difference in price for the betterment.
Betterment
In a property and casualty contract, the objective is to restore an insured to the same financial position after the loss that the insured had prior to the loss. In the most basic sense, indemnity i: compensation for a loss.
Indemnity
The insurance company who issues insurance and agrees to pay for losses and provide covered benefits.
Insurer
A licensed person or organization that represents the policyholder by contract in property damage claims negotiations with an insurance company.
Public Adjuster
A licensed individual who can act as an agent representing one or more insurers, and also as a broker dealing with one or more insurers representing your interests.
Broker-Agent
Occurs when two or more perils cause a loss. When only one of these perils is covered by the insurance policy, the court generally rules that the entire loss is covered. Many insurance companies have reworded their policies ro clarifY that only a loss attributed ro a covered peril is indeed covered.
Concurrent Causation
An intentionally deceptive act committed to obtain an unfair or unlawful advantage. Fraud usually involves monetary gain.
Fraud
The policyholder(s) entitled to coverage under an insurance policy.
Insured
Cause of loss.
Peril
The person who evaluates the damage caused by a covered loss and determines the amount to be paid under the policy terms.
Claim Adjuster
The portion of an insurance contract that sets forth the rights and duties of the insured and the insurer.
Conditions
The termination date of coverage as indicated on an insurance policy.
Expiration Date
A method of shifting risk from a person, business, or organization to an insurance company in exchange for the payment of premium. The insurance company commits to be responsible for covered losses.
Insurance
A provision that authorizes the insurer to make a loss payment to a person, company, or organization (loss payee) other than the insured. The loss payee must have an insurable interest (such as a lienholder for business personal property or a mortgagee on real property).
Loss Payable Clause
A portion of the policy premium that is paid to an agent by the insurance company as compensation for the agent's work.
Commission
A factual falsification made in such a manner that the insurance company would have refused to insure the risk if the truth had been known at policy issuance. A material misrepresentation gives an insurance company grounds to rescind a contract.
Material Misrepresentation
A short-term agreement that provides temporary insurance coverage until the policy can be issued or delivered.
Binder
Any interest (most commonly ownership) that a person, company, or corporation has in a subject of insurance such as a business, building, or auto, which can be damaged and may cause the person, company, or corporation financial loss or other tangible deprivation. Generally, an insurable interest must be demonstrated when a policy is issued and must exist at the time of loss.
Insurable Interest
A potential situation in any bodily injury claim (including Workers Compensation claims) where a spouse contends that the bodily injury of their partner deprives them of the natural affection (spousal duties), help, and companionship of said spouse.
Loss of Consortium