A

Additional Coverages
Extra coverage that can be purchased to provide protection above and beyond that provided in the original or standard policy (i.e., purchasing a higher amount of coverage against the theft of jewelry). When such additional coverage is purchased, it becomes an Endorsement or Rider to the original policy.

Adjuster
An insurance company representative who seeks to determine the extent of the company’s liability for loss when a claim is submitted.

Agency
An insurance sales office that is directed by a general agent, manager, Trusted ChoiceSM agent, independent agent or company manager.

Agent
A person licensed by a state insurance department who solicits, negotiates or effects insurance contracts on behalf of one or more insurers.

Auto Insurance
A type of insurance that protects the policyholder against losses involving automobiles. Different coverages can be purchased depending on the needs and wants of the insured.

B

Beneficiary
A person named by the insured to receive the benefits or proceeds from an insurance policy.

Business Insurance
See Commercial Lines .

C

Captive Agent
An agent who sells insurance for only one company, as opposed to an independent agent who represents several companies.

Claim
A demand made by the insured, or the insured’s beneficiary, for payment of benefits provided by an insurance policy.

Collision Insurance
An optional auto insurance coverage that pays for damage to the policyholder’s car caused by its collision with another vehicle or object.

Commercial Lines
Insurance coverages designed for and purchased by businesses, professionals and commercial establishments, as opposed to personal lines insurance which is designed for and bought by individuals.

Comprehensive Coverage
See Other-than-Collision Coverage.

Conditions
Provisions of an insurance policy that state the rights and duties of the insured or the insurer. Typical conditions have to do with such things as the insured’s duties in the event of loss, cancellation provisions and the right of the insurer to inspect the property.

Condominium Unit Owners Insurance
Though similar to personal property and liability coverage to homeowners insurance, structurally, the condo unit owners policy is from the “walls in” and does not cover the building itself.

Coverage
The scope of protection under an insurance contract.

D

Deductible
The amount of an insured loss paid by the policyholder. For example, if you select a deductible of $250 for your auto insurance policy, you agree to pay the first $250 of damages to your car if you are in an accident.

Depreciation
A decrease in the value of property over a period of time resulting from use, obsolescence or wear and tear.

Disability Insurance
A type of heath insurance that pays a monthly income to the policyholder when he or she is unable to work because of an illness or accident.

E

Employee Benefits
Benefits offered employees at their place of work covering medical expenses, disability, retirement and death. These benefits are usually insurance coverages and are paid in whole or in part by the employer.

Endorsement
An attachment to an insurance policy that amends and alters the coverage provided in the policy. Also called a Rider.

Exclusions
Specific situations, conditions or circumstances that are listed in the insurance policy as not being covered.

F

Floater
Property insurance for items that are moved from location to location, covering losses wherever they occur. It is typically bought to cover jewelry, furs and other items whose full value may not be covered in standard homeowners policies.

H

Health Insurance
A general term for insurance against loss by sickness or bodily injury. This usually includes coverage for medical expenses such as doctor visits and hospital stays and can cover normal and preventive care such as check-ups, prenatal care and wellbaby care.

Homeowners Insurance
A “package” policy providing coverage against property and liability perils facing homeowners.

I

Independent Agent
An agent who represents more than one insurer, often eight or more different companies. Also see Trusted ChoiceSM agent.

Insurance
A formal device for reducing the chance of loss by transferring the risks of several individual entities to insurance companies.

Insurance Fraud
Intentional lying or concealment by policyholders to obtain payment of an insurance claim that otherwise would not be paid.

Insured
The party covered by an insurance arrangement, to which an insurer agrees to indemnify for losses, provide benefits or render services.

L

Liability
Individual responsible for causing, through negligence, injury to another person or damage to another person’s property. Also called Personal Liability .

Liability Insurance
Insurance that pays and renders services on behalf of a policyholder who is unintentionally, but legally responsible for bodily injury or property damage that is caused to another person and covered in the policy.

Life Insurance
A policy that guarantees the payment of a stated amount of monetary benefits upon the death of the insured to a designated beneficiary, typically a family member or business.

M

Medicaid
A joint federal-state public assistance program for people whose income and resources are insufficient to pay for health care. Because it is administered by the states, benefits and eligibility vary from state to state.

Medical Payments Insurance
A form of coverage, optional in various liability policies such as auto insurance that provides for the payment of medical and similar expenses regardless of liability.

Medicare
A federal program for persons age 65 or older that pays part of the cost associated with hospitalization, surgery, doctor visits, home health care and skilled nursing care.

O

Other-than-Collision Coverage
Personal auto insurance policies use this term for physical damage coverages for losses by fire, theft, vandalism, falling objects and various other perils. Commercial policies refer to this coverage as “comprehensive.”

P

Package Policy
A single insurance policy that combines several coverages available separately. For example, homeowners insurance is a package policy, combining property, liability and theft coverages.

Peril
A property insurance term referring to the possible cause of loss such as a fire or windstorm. Personal Liability See Liability.

Personal Property
All tangible property not classified as real property.

Policy
A written contract for insurance between an insurance company and the policyholder.

Premium
The amount of money an insurance company charges, based on a given rate, to provide the coverage described in the policy, or, simply stated, the price of insurance protection for a specified risk for a specified period of time, typically one year.

Property Coverages
Insurance that covers damage to or loss of the policyholder’s property.

Property-Casualty Insurance
Property insurance covers damage to or loss of the policyholder’s property. The terms “casualty” and “liability” insurance are often used interchangeably. Both cover the policyholder’s legal liability for damages caused to other persons and/or their property.

R

Rate
The cost of a unit of insurance as determined by insurance companies and state regulators. The rate serves as the basis for the premium.

Real Property
Land and most things attached to the land such as buildings and vegetation.

Regulation
Insurance is a state-regulated business. State insurance laws are administered by insurance departments, whose job includes approval of rates and policy forms, licensing of insurance companies and insurance agents, investigation of company practices, review of annual financial statements, periodic examination of books, and liquidation of insolvent insurers.

Renters Insurance
A form of homeowners insurance offering coverage for personal property and liability, but excluding real property.

Rider
See Endorsement.

Risk
This word has two meanings for insurers: (1) the chance of loss, such as from a peril; and (2) the person or entity that is insured by a policy.

S

Social Security
The programs provided under the U.S. Social Security Act of 1935 plus its amendments and additions. These programs encompass retirement, disability and annuity to dependents and survivors.

Social Security Tax
A tax paid by workers and employers on wages earned. The taxes support the benefits program under the Social Security system.

T

Trusted ChoiceSM Agent
A Trusted ChoiceSM agent represents multiple insurance companies, so they offer you a variety of coverage choices and can customize a plan to meet your specialized needs. Most importantly, a Trusted ChoiceSM agent isn’t an employee of an insurance company, so you have someone who works for you.

U

Underwriter
A company representative who reviews applications for insurance coverage to ensure they are acceptable and appropriately priced.

Unemployment Insurance
Insurance against loss of income due to unemployment. This type of insurance is funded by payroll taxes and subject to the control of both state and federal governments.

Uninsured Motorists (UM) Coverage
A coverage in an automobile insurance policy under which the insurer will pay damages to the insured for which another motorist is liable if that motorist is unable to pay because he or she is uninsured. This coverage usually applies to bodily injury damages only. Injuries to the insured caused by a hit-and-run driver are also covered.

W

Workers Compensation
A policy, conforming to state law, which pays benefits to an employee (or an employee’s family) if the employee suffers a job-related injury (including death), or occupational disease.