Glossary of Insurance Terms

By Compuquotes Team on March 27th, 2008
General Insurance

Here is a brief and basic list of terms that could be used during your visit or phone call to the insurance agency or office.

Actuary: A professional that analyzes, evaluates and manages statistical data in order to determine rates and rating methods and determine the risks associated with policies.

Adjuster: A professional employed by the insurance company to evaluate the losses of their policy holders and settle claims.

Agent: Someone who sells insurance--either an independent agent who represents many insurance companies or an exclusive agent who only represents one insurance company.

Appraisal: A survey that determines the insurable value of a property or the amount of a loss on a property or vehicle.

Arbitration: The insured and the insurance company agree to settle a claim by using a decision made by a third party.

Arson: The setting of a fire on purpose.

Binder: Authorization of temporary insurance coverage before the actual policy is written.

Broker: A person between the customer and the insurance company. Brokers usually sell commercial insurance or life insurance.

Collision insurance: An auto insurance policy that covers damage to the policy holder's vehicle that was sustained in a motor vehicle collision.

Comprehensive insurance: An auto insurance policy that covers damage to the policy holder's vehicle that was not sustained in a motor vehicle collision, such as fire, theft, vandalism, acts of God or impacts with an animal.

Compulsory insurance: The minimum amount of insurance that is required by your local law. You must have auto insurance if you are driving a vehicle in the US and Canada.

Deductible: The amount that is paid by the policy holder in the event of a claim on insurance.

Fraud: Lying or concealing truth to obtain payment from an insurance claim that would normally not be paid, or, misrepresentation or lying by the insurance company managers, agents, brokers or employees for financial gain.

Homeowners insurance: An insurance policy to cover the house, other structures and contents inside the house. There are varying levels of home owners insurance.

Liability insurance: Insurance policy that pays for bodily injury or property damage caused by another person.

Limits: The maximum amount of insurance that can be paid to the policy holder or other party for a covered loss.

Loss of use: Insurance that will cover your living expenses or the cost of a rental car if you lose the use of your home or vehicle.

No-fault insurance: A policy that pays for each driver's injuries regardless of who caused the collision. This varies from area to area.

Premium: The amount of money that you are charged for your insurance.

Property/Casualty insurance: Insurance that covers the loss of the policy holder's property and pays for their legal liability for damages caused to people and their property.

Total loss/Totaled: The condition of property or vehicle when the cost to repair the damage exceeds the value of the property or vehicle.

Void: A contract in your insurance policy that outlines when the policy becomes free of its legal effect.

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