Insurance Dictionary

Abandonment A condition precedent to a constructive total loss of the property insured, and the insurer’s intention to abandon the property should be informed to the insurer before he/she does so. However the insurer is under no obligation to consent to the abandonment.
Absolute Exclusions Exclusions found within certain insurance policy forms, precluding coverage for claims which are remotely however not directly linked to the actual nature of the exclusion.
Acceleration Clause A contract provision allowing a lender to entail the borrower to repay all or part of any outstanding loan if specific requirements are not met.
Acceptance Agreement to an offer that leads towards conclusion of the contract.
Access to Record Clause One of the most significant contract rights that a reinsurer has under a reinsurance agreement. The intent of this clause is to grant the reinsurer the right to inspect the records and books applicable to the reinsured business
Accident An unforeseen event or circumstance without premeditated intent.
Accident Insurance Insurance for unexpected bodily injury.
Accident Only An insurance contract which offers coverage, singly or in combination, for dismemberment, death, disability, or medical care and hospital caused by or required owing to accident or specified kinds of accident.
Accidental Death Insurance and Dismemberment A type of coverage often written in conjunction with group life insurance plans. It essentially offers double indemnity where death is caused by an accident and demarcated dismemberment benefits. It will pay the full principal sum when death occurs or more than one member is lost in an accident. One-half of the principal sum is paid where one member is lost
Accommodation Line Acceptance by a reinsurer, as a special consideration, of a small accommodation line on a facultative offer or a reinsurance treaty. This situation arises where the reinsurer may have shares on several profitable contracts from a firm and the said firm may request the reinsurer for some supporting share on a contract with unsatisfactory results.
Accumulation Period Period of time insured should incur suitable medical expenses equal to the deductible amount to create a benefit period under a crucial medical expense or all-inclusive medical expense policy
Act in Force Clause A clause included in excess of loss treaties related to liability Insurance, where such liability is statutory, to take care of changes in law or act about quantum of compensation during the cover period, by revision of rate and/or underlying loss retention as well as the limit of the excess of loss cover.
Act of God Perils Any event not caused or contributed to by man. Some sudden and irresistible acts of nature which cannot be foreseen or avoided, such as floods or exceptionally high tides, storms, earthquakes, lightning and so on
Actual Cash Value Repayment value for indemnification because of damage or loss of property; usually it is replacement cost minus depreciation
Actual Total Loss Where the insured is permanently deprived of the subject matter insured; the subject matter damaged by an insured peril cease to be a thing it used to be; and In so far as it relates to a cargo or a vessel and the cargo or vessel is declared as missing
Actuarial Report A formal document/presentation prepared for the state regulatory authority and the Board Directors, or its equivalent, the actuary's professional recommendations and conclusions, of communicating and recording the procedures and methods, of ensuring the parties addressed are mindful of the importance of the actuary's findings or opinion and which documents the analysis underlying the opinion.
Actuary Business professional who analyses likelihoods of risk and risk management together with calculation of dividends, premiums and other applicable insurance industry standards.
Ad Valorem It is an additional insurance policy taken out for each transport, which price depends on the value of the insured goods. It makes up for the low legal compensation provided in the event of transport disputes.
Additional Insured Endorsement Policy endorsement used to add coverage for additional insureds by name such as lessors or mortgage holders.
Adjuster An individual who investigates claims and suggests settlement options on the basis of damage estimates and insurance policies held.
Admission Hospital in-patient care for medical condition
Admitted Assets Insurer assets that is valued and included in the balance sheet to ascertain financial capability of the company.
Admitted Company An insurance company authorised to do business in a state(s), domiciled in an alternative state or nation
Advance Premiums Happen when a policy is processed and the premium is paid before the actual date. These are a liability to the company and not included in the unearned premium reserve or written premium.
Adverse Selection The social phenomenon wherein individuals with a greater than average likelihood of loss look for higher insurance coverage than those with less risk
Advisory Organisation A group backed by member companies whose role is to accumulate loss statistics and publish trended loss costs.
Affiliate An entity or person which/who directly/indirectly, through one or more other individuals or entities, controls, is controlled by or is under the common control with the insurer.
Agent A person who services, sells, or negotiates insurance policies on behalf of a company or independently.
Aggregate The maximum amount or total amount of coverage payable for multiple losses or a single loss, during a policy period, or on a single project
Aggregate Cost Payments Method of reimbursement of a health plan with a company which directly offers care, where the health plan is contractually needed to pay the total operating costs of the company minus any income to the entity from other service users; and there are mutual limitless guarantees of solvency between the company and the health plan that put their respective capital and surplus at risk in guaranteeing each other
Aircraft Coverage for aircraft and their contents; aircraft manufacturers or aircraft owners' liability to airports, third parties, and passengers.
ALAE An estimate of the claims settlement related to a specific claim or claims
Alien Company An insurance company established in accordance with the laws of a foreign nation. The company should obey the state regulatory standards to lawfully sell insurance products in that state
Allied Lines Coverages that are usually written with property insurance, example tornado, glass, hail and windstorm; water and sprinkler damage; riot, civil commotion; growing crops; rain; flood; and damage from vehicle, and aircraft etc.
All-Risk Also termed as open peril, this policy covers a wide range of losses and risks not explicitly excluded in the contract of the policy.
Alternative Workers' Compensation Other than standard workers' compensation coverage, excess workers' compensation and employer's liability
Ambulatory Services Health services given to members who are not restricted to a healthcare institution. Ambulatory services are termed as out-patient services.
Annual Statement An annual report necessary to be filed with each state where the insurer conducts or operates business. This report offers a summary of the financial position of the company and important events that had taken place during the reporting year
Annuitant Beneficiary of the annuity payment or an individual during whose life the annuity is payable.
Annuities – Immediate Non-variable The annuity contract which offers fixed payment of the annuity at the end of the 1st period of payment subsequent to purchase. The period can differ; nevertheless the annuity pay outs should start within 13 months
Annuity A contract that provides income for an individual or individuals for a stipulated period of time or during the life of the individual or individuals.
Appraisal An assessment of the value
Approved or Not Disapproved for Surplus Lines Indicates the firm is approved or not disapproved to write surplus or excess lines in this state.
Arbitration A binding dispute resolution method wherein a mediator or negotiator with no interest in the result mediates.
Assessed Value Estimated value for personal or real property as established by a taxing corporation
Asset Probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events.
Asset-Backed Securities Bonds which represent groups of loans of similar types, interest rates and duration. Almost any loan with regular repayments of principal and interest can be securitised, from equipment leases and auto loans to mortgages and credit card receivables.
Asset Risk Risk assigned to the company's assets in the risk-based capital formula.
Assignment Assignment means legal transference. It is a means whereby the beneficial interest, right and title under a life insurance policy get transferred from assignor to assignee
Assignor Assignor is the policyholder who transfers the title. The person who transfers the rights of the life insurance policy to the assignee is called the Assignor.
Assignee The person to whom the rights of the policy are being transferred by the policyholder (assignor) is called the Assignee
Assigned Risk Plan Facilities through which drivers can obtain auto insurance if they are unable to buy it in the voluntary or regular market. Insurers selling automobile insurance in the state are assigned these drivers to insure, based on the amount of insurance they sell in the regular market. 
Assisted Living Care A rider or policy which offers coverage when a policyholder is kept in an assisted living facility and meets the policy necessities for coverage.
Authorised Company A licensed insurer admitted to do business in a specific state
Auto Liability Coverage which protects against financial loss due to legal liability for motor vehicle related injuries or damage to others property caused by accidents ensuing from ownership, maintenance or use of a motor vehicle
Auto Physical Damage Motor vehicle insurance encompassing coverage for vandalism, theft, fire and collision which insures against material damage to the insured's vehicle. Commercial is defined as all motor vehicle policies which comprise vehicles which are utilised in connection with business, commercial establishments, activity, employment, or activities carried on for profit or gain
Automobile Liability Insurance Coverage for property damage or bodily injury incurred through operation or ownership of a vehicle.
Aviation Insurance Commercial airlines hold property insurance on airplanes and liability insurance for negligent acts that result in injury or property damage to passengers or others. Damage is covered on the ground and in the air. The policy limits the geographical area and individual pilots covered.

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