| A | B |
|---|
| Actual Cash Value | The value of an asset minus depreciation, also called book value |
| Adhesion contract | A standard form contract in which parties must adhere to the contract exactly as written. |
| Beneficiary | Party (individual or business) who receives proceeds from a life insurance claim |
| Binder | An oral or written statement verifying insurance coverage before the regular policy is issued by the insurance company |
| Bodily Injury Liability | Protects the insured person lawsuits arising from injuries to people in other cars, passengers riding with the insured person, and pedestrians, but does not cover the insured person |
| Cash value | The amount of money saved in a whole life policy that the policyholder can take by either borrowing against or cashing in the policy |
| Claims | Requests for payment from the insurance company to cover the financial losses |
| Collision insurance | Protects the car owner against damage from a collision with another object or the car turning over, but does not cover injuries to people |
| Comprehensive auto insurance | Protects the insured vehicle against almost all damage except the collision or the car turning over. |
| Deductible | The amount of money the policyholder must pay before the insurance company will pay a claim |
| Insurable Interest | A financial interest in property or a person’s life that permits someone to buy insurance to protect against the financial loss to that property or death of the person insured |
| Insurance Company | Businesses that provide planned protection against economic loss |
| Insurance fraud | False claims made to an insurance company |
| Insurance | The planned protection provided by sharing economic losses among large numbers of people |
| Insured (Policyholder) | The person for whom the risk is assumed. (the insurance customer) |
| Insurer | The insurance company that provides planned protection against economic losses |
| Earthquake insurance | A special coverage transferring risk of earthquake damages |
| Endowment life | A life insurance policy where a lump sum payment at the beginning of the policy guarantees coverage for a specified number of years |
| Exclusions | Limitations to policy coverage |
| Face amount | The policy limit of a life insurance policy |
| Fidelity and Surety Bonds | Insures against a financial loss due to dishonesty |
| Financial Responsibility Law | Requires the responsible driver to pay for any property damage or bodily injury caused in an accident with either compulsory insurance or with savings held for that purpose. |
| Fire insurance | Covers loss resulting directly or closely from an unfriendly fire. |
| Flood Insurance | A special coverage transferring risk of flood damage |
| Homeowners insurance | Protects against most types of property losses and liabilities related to home ownership |
| Indemnify | To make good or compensate the loss to the suffering party |
| Inland Marine | Covers against loss or damage to property being transported by any means other than sea (rail, truck and airplane) |
| Insurable Interest | A financial interest in property or a person’s life that permits someone to buy insurance to protect against the financial loss to that property or death of the person insured |
| Insurance Company | Businesses that provide planned protection against economic loss |
| Life insurance | Pays a beneficiary a set amount upon the event of the insured person’s death |
| Marine insurance | Covers the loss of or damage to vessels, cargo and other property exposed to the perils of the sea |
| Medical Payments | Covers policyholders and family members against injuries related to vehicle |
| Policy | A contract issued by the insurance company for coverage of the policyholder |
| Premium | The amount of money the policyholder must pay for insurance coverage |
| Proceeds | The money paid to a survivor from a life insurance contract |
| Property Damage Liability | Protects the insured person against damage by his/her car to another person’s property |
| Property insurance | Covers the loss of physical property from perils such as fire, theft, windstorm |
| Renter’s insurance | Coverage for tenant’s personal property and premise liability |
| Risk retention | Self-insurance against a loss. Example deductible, waiting period, copayment |
| Risk | The possibility of a financial loss |
| Risk management | The process of managing one’s exposure to risk |
| Term life | An inexpensive life insurance policy, only pays a death benefit if the insured dies during the policy term, and is a pure insurance policy that includes no cash value |
| Underwriter | An insurance professional who determines whether the insurer will accept the risk and the cost of the policy using risk factors and statistical data |
| Uninsured and Underinsured Motorist Protection | Protects policyholder against drivers without insurance or without enough insurance to cover the loss suffered |
| Variable life | A life insurance policy where the insured determines how to invest the dollars that accumulate in cash value |
| Whole life insurance | A life insurance policy where the premium remains constant and builds a cash value invested by the insurer; a more expensive policy than term |
