Insurance Glossary

The content provided in this guide is for informational purposes only and is not intended as legal, financial, or professional advice. Readers are advised to seek the services of qualified professionals to receive personalized advice tailored to their specific situation and needs. By continuing to read this guide, you agree to not hold the author, publisher, or any of their affiliates liable for any decisions made based on the information provided herein.

Welcome to our Insurance Glossary – your ultimate resource for demystifying the language of insurance.

Whether you’re a seasoned professional looking to brush up on industry terminology or a policyholder seeking to understand the finer details of your coverage, this glossary is designed for you.

With easy-to-understand explanations of insurance jargon from A to Z, our comprehensive guide ensures that complex terms like ‘coinsurance’, ‘indemnity’, and ‘underwriting’ become clear and manageable. Navigate through the world of insurance with confidence and make informed decisions with the help of our definitive insurance lexicon.

Let’s get started on your path to insurance literacy!


Actual Cash Value (ACV) – The value of an insured item as it is today, considering depreciation.

Actuary – A professional who analyzes financial risks using mathematics, statistics, and financial theory, particularly in relation to insurance and pensions.

Additional Insured – A person or organization not automatically included as insured under an insurance policy but for whom insured status is arranged, usually by endorsement.

Adjuster – An individual employed by an insurer to evaluate losses and settle policyholder claims.

Admitted Company – An insurance company licensed and authorized to do business in a particular state.

Admitted Assets – Assets recognized and accepted by state insurance laws in determining the solvency of insurers and reinsurers.

Advance Premium – A pre-payment of a premium that is not yet due.

Adverse Selection – The tendency of those in dangerous jobs or high-risk lifestyles to get insured at standard rates, which increases the insurer’s exposure to loss.

Affidavit – A written statement made under oath.

Agency – An organization where insurance agents work.

Agent – An individual authorized by an insurance company to sell insurance products.

Aggregate Limit – The maximum amount an insurer will pay for all accumulated claims within a specified period.

Alien Company – An insurance company formed according to the laws of a foreign country.

All-Risk Policy – An insurance policy that covers all causes of loss except those specifically excluded.

Annuity – A contract that provides a periodic payment of income for a specified period of time, such as for life.

Application – A form used by an insurance company to gather information about a prospective insured.

Appraisal – An evaluation of property to determine its insured value or the amount of a loss.

Arbitration – A process of settling a dispute through an independent party.

Assigned Risk – A risk that underwriters do not wish to insure, but due to state law or other reasons, must be accepted for insurance.

Assumed Liability – Liability that a person or business takes on voluntarily, such as through a hold harmless agreement.

Assurer – Another term for an insurer, the party in an insurance contract promising to pay the losses.

Attained Age – The current age of the insured.

Auto Insurance Policy – A policy that covers an insured’s legal liability for bodily injury and property damage caused by an automobile accident, and also covers damage to the insured’s own vehicle under specified conditions.


Bailee – A person or entity that has temporary possession of someone else’s personal property.

Bailment – The process of placing property into the temporary custody or control of another, usually for benefit, which includes responsibility for its safekeeping.

Basic Causes of Loss Form – A form that specifies the perils or causes of loss covered by the policy.

Beneficiary – The person or entity designated to receive the death benefit from a life insurance policy.

Binder – A temporary insurance contract that provides proof of coverage until a permanent policy is issued.

Bodily Injury (BI) – Physical injury to a person, including sickness, disease, and death.

Boiler and Machinery Insurance – A specialized type of property insurance that covers damage to mechanical or electrical equipment.

Bond – A financial guarantee issued by an insurance company that provides compensation for losses in the event of a failure to perform specified acts.

Breach of Warranty – Failure to fulfill the terms of a policy’s warranty or promise, which can result in the denial of a claim.

Broker – An individual or firm that acts as an intermediary between a buyer and insurance companies; unlike agents, brokers do not have the authority to bind coverage.

Burglary – The theft of property by force or threat of force from a premises.


Cancellation – The termination of an insurance policy before its normal expiration date, either by the insured or the insurer.

Captive Agent – An insurance agent who sells insurance for only one company, as opposed to an independent agent who represents multiple insurers.

Captive Insurance Company – An insurance company that is wholly owned and controlled by its insureds; its primary purpose is to insure the risks of its owners.

Catastrophe – A disaster that is unusually severe and inflicts significant damage over a wide area, often requiring intervention from insurers’ catastrophe funds.

Catastrophe Bond – A high-yield debt instrument designed to raise money for companies in the insurance industry in the event of a catastrophe.

Cede – To transfer (parts of) a risk from one insurer to a reinsurance company.

Ceding Company – An insurance company that transfers risk to a reinsurer.

Certificate of Insurance – A document used to provide information on specific insurance coverages, certifying that a policy has been written.

Claim – A request made by the insured for insurer remittance of payment due to loss incurred and covered under the policy agreement.

Claims Adjuster – A person employed by an insurance carrier to evaluate losses and settle policyholder claims.

Claims-Made Policy – A type of liability policy where coverage is provided for claims reported (made) during the policy period.

Clauses – Provisions added to an insurance contract that either add or restrict coverage in some way.

Coinsurance – A provision under which both the insured and the insurer share the covered losses in a specified ratio, after the deductible is met.

Collision Coverage – Insurance that helps pay to repair or replace the policyholder’s car if it’s damaged in a collision with another vehicle or object.

Combined Ratio – An indication of the profitability of an insurance company, calculated by adding the loss ratio and the expense ratio.

Commercial Lines – Products designed for and bought by businesses to cover their risk exposures.

Commission – The fee that an insurance agent or broker receives for selling and servicing a policy.

Common Carrier Liability – Insurance or liability coverage for transportation companies that offer services to the public.

Community Rating – A method for setting premiums for insurance policies where every policyholder pays the same, based on the average cost of risk within their community.

Comprehensive Coverage – Insurance that covers damage to the policyholder’s car that is not caused by a collision with another vehicle or object.

Conditional Receipt – A receipt given for premium payments accompanying an application for insurance, which provides temporary coverage until the policy can be issued or denied.

Contingent Beneficiary – The party designated to receive the proceeds of a life insurance policy following the death of the insured, provided the primary beneficiary predeceased the insured.

Contingent Liability – Potential liabilities that may be incurred by an insured depending on the outcome of a specific event.

Continuation Coverage – Extended health insurance coverage (under COBRA) offered to individuals who have lost their group health insurance coverage due to certain events.

Contractual Liability – Liability coverage of an insured who has assumed the legal liability of another party by written or oral contract.

Contributory Negligence – A principle of law that, in some jurisdictions, may prevent a claimant from recovering any portion of the damages if found to be even minimally responsible for the accident.

Convertible Term Insurance Policy – A term life insurance policy that offers the policyholder the option to convert their coverage into permanent insurance without a medical examination.

Coordination of Benefits (COB) – A method of integrating benefits payable under more than one health insurance plan so that the insured’s benefits from all sources do not exceed 100% of allowable medical expenses or eliminate overinsurance.

Copayment – A predetermined (flat) fee that an individual pays for health care services, in addition to what the insurance covers.

Credit Insurance – Insurance that repays some or all of a loan when certain things happen to the borrower, like unemployment, disability, or death.

Credit Life Insurance – A type of life insurance policy designed to pay off a borrower’s debt if the borrower dies.

Credit Score – A numerical expression based on a level analysis of a person’s credit information, which represents the creditworthiness of an


Declarations Page – The part of an insurance policy that includes information such as the name and address of the insured, the policy period, amounts of insurance and premiums, and a description of the insured property or risk.

Deductible – A specified amount of money that the insured must pay before an insurance company will pay a claim.

Deferred Annuity – An annuity contract that delays payments of income, installments, or a lump sum until the investor elects to receive them.

Defensive Driving – Techniques that help a driver to anticipate problems and respond ahead of time to avoid accidents.

Defined Benefit Plan – A retirement plan that provides a specified monthly amount upon retirement, often based on salary and years of service.

Defined Contribution Plan – A retirement plan in which the amount of the employer’s annual contribution is specified. Individual accounts are set up for participants and benefits are based on the amounts credited to these accounts.

Demutualization – The conversion of a mutual insurance company, which is owned by its policyholders, into a publicly traded stock company owned by shareholders.

Dependent Life Coverage – Life insurance coverage that is provided to the dependents of an insured party, typically a spouse and children.

Depreciation – Reduction in the value of property due to age, wear and tear, obsolescence, etc.

Direct Loss – Damage to covered real or personal property caused by a peril.

Direct Writer – An insurer whose distribution mechanism is either the direct selling system or the exclusive agency system.

Disability Benefit – A benefit paid to an insured person who is temporarily or permanently disabled and unable to work.

Disability Income (DI) Insurance – Provides for periodic payments to replace income when an insured is unable to work as a result of illness, injury, or condition.

Disappearance Coverage – Coverage for the disappearance of property when the cause of loss cannot be explained or the property cannot be located.

Dividend – A return of part of the premium on a participating insurance policy reflecting the difference between the premium charged and actual experience.

Dollar Threshold – In no-fault auto insurance states, the level of personal injury medical expenses that must be reached before a claimant may sue for pain and suffering.

Domestic Insurer – An insurer doing business in the jurisdiction in which it is incorporated.

Dwelling Coverage – Insurance that protects the insured home against damage to the house itself, or to possessions in the home.

Double Indemnity – A provision in a life insurance policy that provides for an additional benefit equal to the face amount of the policy to be paid if the insured dies as the result of an accident.

Dread Disease Coverage – A type of health insurance coverage that offers a lump-sum payment should the policyholder be diagnosed with one of several specified terminal conditions.

Drive Other Car Endorsement – An endorsement that can be added to an automobile insurance policy that provides coverage to the named insured while driving a car other than the one named in the policy.

Driver Improvement Course – A course that provides drivers with basic driving techniques to help minimize risks and improve driving performance.

Driving Under the Influence (DUI) – Operating a motor vehicle while one’s blood alcohol content is above the legal limit set by statute, which is considered a serious traffic violation.

Dwelling Form – A special form of homeowner’s insurance that only insures the dwelling itself, not the personal property or liability.

Duty to Defend – The insurer’s legal obligation to defend the insured against lawsuits that are covered by the policy.


Earned Premium – The portion of a policy’s premium that has been used to actually buy coverage, or that the insurance company has “earned.” For instance, if a policyholder has paid an annual premium in advance, the insurer has earned a portion of that premium each day of the coverage period.

Earthquake Insurance – A form of property insurance that pays the policyholder in the event of an earthquake that causes damage to the property.

Effective Date – The date on which an insurance policy becomes active and coverage is in effect.

Elimination Period – The time period between an injury and the receipt of benefit payments in a disability insurance policy.

Endorsement – An amendment or rider to a policy adjusting the coverages and taking precedence over the general contract.

Errors and Omissions (E&O) Insurance – Professional liability insurance that protects companies and individuals against claims made by clients for inadequate work or negligent actions.

Excess and Surplus Lines – Insurance that is provided by insurers not licensed in the states where the risk is located and is legally eligible to be written by a non-admitted insurer.

Excess Liability Policy – A policy issued to provide limits in excess of an underlying liability policy.

Exclusion – Certain causes and conditions, listed in the policy, which are not covered.

Exclusive Agent – An insurance agent who is contracted to sell insurance for a single company.

Experience Rating – The process of determining the premium rate for a group risk, at least partially based on that group’s own claim experience.

Expiration Date – The date on which an insurance policy expires and coverage ends.

Exposure – Measure of vulnerability to loss, usually expressed in dollars or units.

Extended Coverage – An extension of the insurance policy beyond the basic coverage.

Extended Replacement Cost Coverage – An additional amount of insurance to cover the cost to replace a damaged or destroyed property, even if it exceeds the policy limit.

Extension of Coverage – A provision under which an insurer continues coverage beyond the original expiration date, as a courtesy to the policyholder, without a formal extension of the contract.

Extra Expense Insurance – A type of insurance that pays for the additional costs in returning a business to normal after a covered loss.

Extrinsic Value – In options trading, the portion of an option’s price that exceeds the intrinsic value, which is influenced by the time left until expiration, volatility, and interest rates, rather than the difference between the option’s strike price and the market price of the underlying asset.


Face Amount – The amount of benefit stated in the life insurance policy to be paid in the event of death or at maturity.

Facultative Reinsurance – A type of reinsurance in which the reinsurer accepts or rejects individual risks presented by an insurance company, rather than agreeing to cover all risks.

Fair Access to Insurance Requirements (FAIR) Plans – Insurance pools that are intended to provide property insurance to individuals who are unable to obtain it through conventional means due to the high risk of their properties.

Fidelity Bond – A bond or insurance policy that reimburses an employer for losses caused by the dishonest acts of its employees.

Fiduciary Liability – Liability of individuals acting in a fiduciary capacity, related to the management of retirement plans or employee benefits.

File-and-Use States – States where insurers must file rates and forms with the state insurance department but can use them prior to receiving regulatory approval.

Financial Guaranty Insurance – A surety bond, insurance policy, or an indemnity contract (when issued by an insurer), and any guarantee similar to the foregoing types, under which loss is payable upon proof of occurrence of financial loss.

Financial Responsibility Law – State laws that require owners or operators of autos to provide evidence that they have the funds to pay for automobile losses for which they might become liable. Insurance is the usual method for providing this evidence to the state.

First-Party Coverage – Insurance coverage for the policyholder’s own property or person. It is not liability coverage for claims against third parties.

Flat Cancellation – The cancellation of an insurance policy as of its effective date, without any premium charge.

Floater Policy – A policy under which valuable items, such as jewelry or cameras, can be insured for additional amounts or as scheduled items to cover the risk of loss by theft or damage.

Flood Insurance – Insurance that compensates for physical property damage resulting from flooding. It is typically excluded under standard homeowners and renters insurance policies, but it can be purchased as a separate policy.

Forced Place Insurance – Insurance taken out by a lender on an uninsured debtor’s behalf, so if the property is damaged, funding is available to repair it.

Foreign Insurer – An insurer doing business in the jurisdiction in which it is incorporated.

Franchise Insurance – A form of insurance where the insurer is only liable for losses that exceed a certain amount, at which point the insurer covers all further losses up to the policy limit.

Fraud – Intentional deception by an individual or entity with the purpose of unjustly or illegally gaining benefit.

Free Look Period – A specified period, typically 10 to 30 days, during which a policyholder can review a new life insurance policy and return it for a full refund if not satisfied.

Fronting – A practice where a primary insurer acts as the insurer of record by issuing a policy, but then passes the entire risk to a reinsurer in exchange for a commission. Often, the fronting insurer is licensed to do business in a state or country where the risk is located, but the reinsurer is not.

Fully Insured Plan – An insurance plan where the employer contracts with another organization to assume financial responsibility for the enrollees’ medical claims and for all incurred administrative costs.


Gap Insurance – A type of auto insurance that covers the difference between the actual cash value of a vehicle and the balance still owed on the financing (car loan, lease, etc.).

General Account – The account where a life insurance company puts all its premiums and from which it withdraws money to pay for all of its obligations and guarantees.

General Agent – An individual appointed by an insurer to administer its business in a given territory. Responsible for building the agency and servicing the insurance needs of all insureds.

General Liability Insurance – Insurance designed to protect business owners and operators from a wide variety of liability exposures. Exposures could include liability for accidents coming from the insured’s premises or operations, products sold by the insured, operations completed by the insured, and contractual liability.

Grace Period – The time – usually 31 days – during which a policy remains in force after the premium is due but not paid.

Graduated Driver Licensing – A system for phasing in on-road driving, allowing beginners to get their initial experience under conditions that involve lower risk and are easier to manage.

Gross Negligence – A conscious and voluntary disregard of the need to use reasonable care, likely to cause foreseeable grave injury or harm to persons, property, or both.

Group Health Insurance – Health insurance issued to employers, associations, trusts, or other groups covering employees or members and their dependents, and providing protection against health care expenses.

Group Insurance – Insurance that is generally purchased by an employer or association on behalf of a group of individuals. It can provide coverage for life, health, and other types of personal insurance.

Group Life Insurance – Life insurance usually without medical examination on a group of people under a master policy. It is typically issued to an employer for the benefit of employees, or to members of an association.

Group Rating – A method of determining the premiums for all policies in a given group of risks as a whole, based on the collective experience of the group.

Guarantee Period – The period during which the level of interest specified in a fixed-rate annuity or life insurance policy is guaranteed.

Guaranteed Insurability – An option that permits the policyholder to buy additional stated amounts of life insurance at certain times in the future, without proving insurability.

Guaranteed Issue Right – The obligation by a health insurer to issue coverage to an applicant regardless of their health status or other factors.

Guaranteed Replacement Cost Coverage – Homeowners policy that pays the full cost of replacing or repairing a damaged or destroyed home, even if it is above the policy limit.

Guaranteed Renewal – A feature in a life insurance policy guaranteeing the policyholder the right to renew coverage at the end of the coverage term without having to undergo another health examination or provide any further health information.

Guaranty Fund – A fund, derived from assessments against solvent insurance companies, to absorb losses of claimants against insolvent insurance companies.

Guardian – A person lawfully invested with the power, and charged with the duty, of taking care of and managing the property and rights of another person who, because of age, understanding, or self-control, is considered incapable of administering his or her own affairs.


Hazard – A circumstance that increases the likelihood or potential severity of a loss. For example, storing combustible materials in a home would be a hazard.

Health Insurance – Insurance that provides protection against the financial losses that result from being sick or injured. It can cover a wide range of services and can pay for medical bills, hospital stays, and sometimes lost wages.

Health Maintenance Organization (HMO) – A type of health insurance plan that typically limits coverage to care from doctors who work for or contract with the HMO. It generally won’t cover out-of-network care except in an emergency.

Health Savings Account (HSA) – A savings account created for individuals who are covered under high-deductible health plans (HDHPs) to save for medical expenses that HDHPs do not cover.

High Deductible Health Plan (HDHP) – Health insurance plans with lower premiums and higher deductibles than traditional health plans.

Homeowners Insurance – A type of property insurance that covers a private residence. It combines various personal insurance protections, such as losses occurring to one’s home, its contents, loss of use, or loss of other personal possessions of the homeowner.

Hull Insurance – Insurance on the hull and machinery of a ship. It covers damage to or loss of the vessel and sometimes mechanical breakdown.

Hurricane Deductible – The amount a homeowner must pay out-of-pocket before insurance will cover the damage caused by a hurricane. It is usually expressed as a percentage of the policy limits.


Indemnity – Compensation for loss or damage. In terms of insurance, it is a principle that ensures that the insured is restored to the same financial position after a loss as before it occurred.

Independent Agent – An insurance agent who sells insurance policies provided by several different insurance companies rather than a single insurance company.

Independent Adjuster – A claims adjuster who provides adjustment services to insurance companies for a fee but is not employed by them.

Inflation Protection – An insurance policy feature where the value of benefits increases by a pre-defined percentage at specific time periods to keep up with inflation.

Initial Premium – The amount required to initiate coverage under a policy.

Inland Marine Insurance – Covers property in transit over land, certain moveable property, property used by the insured in transportation, and instrumentalities of transportation or communication.

Insurable Interest – A stake in the value of an entity or event for which an insurance policy is purchased to mitigate risk of loss.

Insurance Adjuster – A person who investigates and settles insurance claims to determine the extent of the insuring company’s liability.

Insurance Binder – A temporary insurance contract that provides proof of coverage until a permanent policy can be issued.

Insurance Broker – A professional who represents consumers in their search for the best insurance policy for their needs. They work on behalf of their clients and are not insurance company employees.

Insurance Carrier – The insurer; the company who issues the insurance policy and agrees to pay for losses and provide covered benefits.

Insurance Fraud – A deliberate deception perpetrated against or by an insurance company or agent for the purpose of financial gain.

Insurance Pool – A group of insurance companies that pool assets, enabling them to provide an amount of insurance substantially more than can be provided by individual companies to ensure large risks such as nuclear power stations.

Insurance Score – A score calculated from information on an individual’s credit report. Insurance companies use the score to predict the likelihood of filing a claim and the expected cost of those claims.

Insured – The person, group, or property for which an insurance policy is issued.

Insurer – An entity which provides insurance coverage through the issuance of insurance policies.

Integrated Benefits – Insurance that combines coverage for medical, life, disability, and other coverages, often with a single premium and a single administration system.

Interest Sensitive Life Insurance – A type of whole life insurance in which the death benefit and the cash value fluctuate according to the investment performance of a specific portfolio of assets. Premiums are fixed, and it is also known as adjustable life insurance.

Intermediary – A person, or company, who acts as a middleman between the insured and the insurer, usually in the form of an agent or broker.

Investment Income – Income generated by an insurer’s investment portfolio, including interest, dividends, and capital gains.

Irrevocable Beneficiary – A beneficiary designation in a life insurance policy or a trust that cannot be changed without the beneficiary’s consent.

Issue Age Policy – A policy in which the premium is based on the age of the insured at the time the policy is issued or purchased.


Joint and Survivor Annuity – An annuity contract that continues to payout so long as at least one, of two or more, annuitants is alive.

Joint Life Policy – A life insurance policy that is designed to insure two or more lives, and it pays a benefit upon the death of the first or the last person, depending on the terms of the policy.

Joint Underwriting Association (JUA) – An insurer that provides insurance to people who are unable to obtain insurance in the regular market. It is created by state law or by an informal association of insurers and is composed of insurance companies that pool their resources to provide coverage.

Judgment Rating – The method of determining rates based on analysis and judgment, considering individual risk characteristics and using experience and intuition.

Juvenile Insurance – Life insurance on the life of a minor. It often includes a provision under which the quantity of coverage increases automatically when the child reaches certain ages.

Jettison – In marine insurance, this term refers to the act of throwing cargo or equipment (jetsam) overboard when a ship is in danger of sinking in order to save the vessel.

Joint Venture – A joint venture involves two or more entities joining together in a particular project or business venture for a limited time. Special insurance can be necessary to cover the risks associated with such a venture.

Jewelers Block – A type of business insurance designed specifically for jewelers, covering the loss of jewelry within certain limits.


Key Person (Key Man) Insurance – A life or disability insurance policy taken out by a business to compensate that business for financial losses that would arise from the death or extended incapacity of an important member of the business, specified in the policy.

Kidnap & Ransom Insurance – A specialty crime coverage that insures against loss by the surrender of property as a result of a threat of harm to the insured, an employee of the insured, or a relative of the insured.

Kinetic Risk – The risk of loss arising from the motion of objects, which includes the movement of vehicles, machinery, and other physical objects that could cause injury or damage.

Knock-For-Knock Agreement – An arrangement between two or more insurance companies whereby, when both companies’ policyholders incur losses in the same event (such as a car accident), each insurer pays the losses incurred by its own policyholder, regardless of who was at fault.

Knowledge of Loss Provision – A provision found in many property policies which states that if the insured or the insured’s broker knew of a loss before the policy was written, the insurer may deny coverage for that loss.

Known Loss Rule – A rule that states an insurance company will not cover a loss if the insured was aware of a potential loss before the policy was purchased.


Lapse – The termination of an insurance policy due to non-payment of premiums. This can occur if the policyholder does not pay the due premium within the grace period.

Lapsed Policy – A policy that has been terminated for non-payment of premiums. The insurance company is no longer obligated to pay claims under a lapsed policy.

Law of Large Numbers – A principle that states that the larger the number of exposure units, the more closely the actual loss experience will approach the expected loss experience.

Legal Expense Insurance – Insurance that covers policyholders for the cost of legal action brought by or against the policyholder.

Legal Liability – Liability under the law that occurs when a person is responsible for injuries or damage to another party or property.

Liability – Any legally enforceable obligation or responsibility for the injury or damage suffered by another entity.

Liability Insurance – Insurance that provides protection from claims arising from injuries or damage to other people or property.

Liability Limits – The maximum amount an insurance company agrees to pay in the case of a liability claim.

Life Annuity – An annuity that makes payments to the annuitant for their lifetime.

Life Expectancy – The average number of years an individual is expected to live based on demographic factors.

Life Insurance – Insurance that pays out a sum of money either on the death of the insured person or after a set period.

Life Settlement – The sale of a life insurance policy by the policyholder to a third party for more than its cash surrender value, but less than its net death benefit.

Liquidity – The ability of an individual or entity to quickly convert assets into cash without substantial loss in value.

Living Benefits – The benefits of a life insurance policy that the policyholder can use while they are still alive, such as cash surrender value or loans on the policy.

Lloyd’s – Often referred to as Lloyd’s of London, it is a marketplace where insurance buyers and sellers come together to do business.

Long-Term Care (LTC) Insurance – Insurance designed to cover long-term services and supports, including personal and custodial care in a variety of settings such as your home, a community organization, or other facilities.

Loss – The injury or damage sustained by the insured in consequence of the happening of one or more of the accidents or misfortunes against which the insurer, in consideration of the premium, has undertaken to indemnify the insured.

Loss Adjustment Expenses – The costs of investigating and settling insurance claims, including the costs of defending a lawsuit in court.

Loss of Use – Insurance coverage that provides compensation for rental expenses associated with having an insured property repaired or replaced.

Loss Payable Clause – A provision added to an insurance policy that authorizes the insurer to pay the loss to a party other than the insured, such as a bank with a financial interest in the property.

Loss Ratio – The ratio of incurred losses and loss-adjustment expenses to earned premiums.

Loss Reserve – The estimated liability, or provision in an insurer’s financial statement, indicating the amount the insurer expects to pay for losses incurred but not yet reported or reported claims that haven’t been paid.

Loss Run – A report listing the claims history of an individual or business.

Loyalty Discounts – Price breaks that insurance companies offer to customers who have been with them for a number of years or who have multiple policies with the company.


Malpractice Insurance – A type of liability insurance that covers professionals against claims of negligence and misconduct.

Marine Insurance – Insurance that covers the loss or damage of ships, cargo, terminals, and any transport or property by which cargo is transferred, acquired, or held between points of origin and final destination.

Market Value – The current value of your home, including the price of land, which is not necessarily what it would cost to rebuild your home.

Material Fact – Any fact that would influence the insurance company’s decision to provide coverage or the terms and rate of the insurance policy.

Material Misrepresentation – A misstatement of a significant fact on an insurance application that, if known by the insurance company, may have altered the terms or conditions of the insurance coverage, or even the decision to extend coverage.

Maturity Date – The date on which the principal amount of a note, draft, acceptance bond, or other debt instrument becomes due and payable.

Medical Payments Coverage – Part of an auto insurance policy that pays for medical expenses and sometimes funeral expenses resulting from an accident, regardless of fault.

Medicare – A federal health insurance program for people who are 65 or older and certain younger people with disabilities.

Medicare Supplement Insurance – Private insurance policies that can be purchased to “supplement” the Medicare program and cover services that Medicare does not.

Minimum Premium – The lowest amount of money that an insurance company will accept to write a policy.

Misrepresentation – A false or misleading statement that, if intentional and material, can allow the insurer to void the insurance contract.

Moral Hazard – A situation in which a party is more likely to take risks because the costs that could result will not be borne by the party taking the risk.

Mortgage Insurance – A type of life insurance designed to pay off the balance of the mortgage if the borrower dies.

Mortgagee – The lender in a mortgage agreement.

Mortgagor – The borrower in a mortgage agreement.

Motor Truck Cargo Insurance – Provides insurance on the freight or commodity hauled by a for-hire trucker. It covers liability for cargo that is lost or damaged due to causes such as fire, collision, or striking of a load.

Multi-Car Discount – A discount offered by insurance companies for insuring more than one vehicle with the same provider.

Multi-Peril Policy – An insurance policy that offers protection against multiple perils or hazards. It may include a combination of different types of insurance coverages.

Mutual Insurance Company – An insurance company owned by its policyholders, who share in the profits and losses of the company.

MIB Group, Inc. (formerly Medical Information Bureau) – A membership corporation owned by the insurance companies that compiles medical information on applicants for life and health insurance.

Mysterious Disappearance – A coverage term that refers to the disappearance of property without knowledge as to the location, time, or how the property was lost.


Named Peril – A peril specifically mentioned as covered in an insurance policy.

Named Insured – The individual(s) whose name appears on the policy’s declaration page.

National Association of Insurance Commissioners (NAIC) – A U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia, and five U.S. territories.

Negligence – Failure to exercise the care that a reasonably prudent person would exercise under similar circumstances.

Net Premium – The portion of the premium rate which is designed to cover benefits of the policy, not including company operational expenses.

Net Loss – The amount of loss sustained by an insurer after deducting all applicable reinsurance, salvage, and subrogation recoveries.

No-Fault Insurance – A type of auto insurance coverage that allows a policyholder to recover financial losses from their own insurance company, regardless of fault.

Non-Admitted Insurer – An insurance company that is not licensed to operate within a given state.

Non-Cancellable Policy – An insurance policy that the insurer cannot cancel during the policy term except for non-payment of premiums.

Non-Renewal – A decision by an insurer not to renew a policy at the end of its policy term.

Nonstandard Auto (High-Risk Auto or Substandard Auto Insurance) – Insurance for motorists who have poor driving records or have been canceled or refused insurance.

Notary Bond – A bond that ensures a notary will perform their duties according to the laws and ethical standards.

Notice of Loss – A written notice required by insurance companies immediately after an accident or other loss. Part of the standard provisions defining a policyholder’s responsibilities after a loss.

Nuclear Energy Liability Insurance – Coverage for bodily injury and property damage liability resulting from the nuclear energy material (whether or not radioactive) on the insured business’s premises or in transit.


Occurrence – An event or repeated exposure to conditions which unexpectedly causes injury or damage during the policy period.

Occurrence Policy – A policy covering claims that arise out of incidents that occur during the policy period, regardless of when the claims are made.

Ocean Marine Insurance – Insurance designed to provide protection for goods while in transit over the sea; it includes coverage for perils of the sea, war, and pirates.

Open Peril – A type of coverage that insures against any risk of loss that is not specifically excluded.

Operating Expense Ratio – A measure of an insurance company’s operational efficiency, calculated by dividing the company’s operating expenses by its net premiums written.

Ordinance or Law Coverage – Insurance coverage that pays for increased costs due to building codes or zoning laws when repairing or replacing a damaged building.

Original Equipment Manufacturer (OEM) Parts – Parts produced by the manufacturer of the car or the manufacturer’s authorized supplier, rather than by a third-party company.

Out-of-Pocket Maximum – A predetermined limited amount of money that an individual must pay directly before an insurance company will pay 100% for an individual’s healthcare expenses.

Overinsurance – When a property’s insurance coverage exceeds its value, meaning the insurance payout would be more than the property’s actual worth.

Owner-Occupied – Refers to a property that is the owner’s primary residence.

Owners’ Equity – In the context of an insurance company, it refers to the shareholders’ interest reflected in the difference between assets and liabilities.

Omnibus Clause – A provision in an automobile policy that extends coverage to other drivers operating the vehicle with the insured’s permission.

Overhead Expense Disability Insurance – A policy that reimburses a business for overhead expenses in case the owner experiences a disability.

Own Occupation Disability Insurance – A type of disability insurance that covers individuals who become disabled and are unable to perform the majority of the occupational duties that they have been trained to perform.


Package Policy – A single insurance policy that combines several coverages previously sold separately. Example: homeowners insurance.

Peril – A specific risk or cause of loss covered by an insurance policy, such as a fire, windstorm, flood, or theft.

Permanent Life Insurance – Life insurance that provides coverage throughout the insured’s lifetime and also provides a savings element.

Personal Articles Floater – A policy or an endorsement that provides coverage on a world-wide basis for possessions that move from location to location.

Personal Injury Protection (PIP) – An extension of car insurance available in some U.S. states that covers medical expenses and, in some cases, lost wages and other damages.

Personal Lines – Insurance for individuals and families, such as private-passenger auto and homeowners insurance.

Personal Property – Property that is not attached to a building (e.g., furniture, appliances, clothing).

Policy – A contract of insurance, describing the terms, coverages, premiums, and deductibles.

Policyholder – The person or entity listed on the policy declarations page who owns an insurance policy.

Policy Limit – The maximum amount a policy will pay, either overall or under a particular coverage.

Policy Period – The duration of time a policy is in effect, from the start or effective date to the expiration date.

Policy Territory – The geographic area covered by an insurance policy.

Policyholder Surplus – The difference between an insurance company’s assets and its liabilities; essentially the company’s net worth.

Pollution Insurance – Policies that cover costs related to pollution, including cleanup and personal injury.

Pre-Existing Condition – A medical condition that existed before an individual’s health insurance went into effect.

Preferred Provider Organization (PPO) – A managed care organization of medical doctors, hospitals, and other health care providers who have contracted with an insurer to provide health care at reduced rates.

Premium – The amount of money an insurer charges to provide the coverage described in the policy.

Premium Financing – The lending of funds to a person or company to cover the cost of an insurance premium.

Premium Loan – A loan from an insurance company to a policyholder for the amount of premium due.

Primary Beneficiary – The person or entity designated to receive the proceeds of a life insurance policy following the death of the insured.

Primary Coverage – Insurance coverage that pays first in the event of a covered loss.

Primary Market – The market in which new securities are offered to the public for the first time.

Primary Policy – The insurance policy that provides the first layer of protection for the insured.

Principal – The amount of money due to be paid under the terms of a policy.

Probable Maximum Loss (PML) – The maximum loss that an insurer would expect under normal conditions.

Product Liability – The legal liability of manufacturers, wholesalers, and retailers to consumers for injuries or damages that are caused by the goods they produce and sell.

Professional Liability Insurance – Provides protection for professionals, such as doctors and lawyers, against liability incurred as a result of errors and omissions in performing their professional services.

Profit Sharing – A plan that gives employees a share in the profits of the company.

Proof of Loss – A formal statement made by a policy owner to an insurer regarding a loss. It is intended to provide the insurer with detailed information regarding the formal claim of loss.

Property Damage – Physical injury to, destruction of, or loss of use of tangible property.

Property Insurance – Insurance that covers the financial loss to the policyholder resulting from damages to their property.

Prospective Rating – The process of establishing a premium on large commercial accounts that allows the insurer to adjust the premium based on the insured’s loss experience during the policy term.

Protection and Indemnity (P&I) Insurance – A broad type of marine legal liability insurance.

Proximate Cause – The event closely related in time and that which directly produces an event and without which the event would not have occurred.

Public Adjuster – A person hired by the insured to negotiate an insurance claim on their behalf with the insurance company.

Public Liability Insurance – Insurance that covers the insured against claims for loss or damage for which the insured may be liable to the public, and which were not intentionally caused.


Qualifying Event – An event that triggers a special enrollment period for an individual or family to purchase health insurance outside the regular open enrollment period, such as marriage, birth, or loss of other coverage.

Qualified Annuity – An annuity that is funded with pre-tax dollars, typically as part of a retirement plan.

Qualified Endorsement – An endorsement that changes the provisions of the policy to restrict or limit coverage.

Quote – An estimate of premium for prospective insurance coverage provided by an insurer or agent.

Quota Share Reinsurance – A reinsurance agreement in which the insurer and reinsurer share premiums and losses according to a fixed percentage.

Quotation Expired – A notification that the price provided for a particular insurance coverage is no longer valid after a certain date or event.

Quotation Period – The time period during which a quote is valid and can be accepted by the prospective buyer.


Rate – The pricing factor upon which the insurance buyer’s premium is based.

Rating Agencies – Companies that assess the financial strength and creditworthiness of insurance companies, e.g., A.M. Best, Moody’s, Standard & Poor’s.

Rebate – A partial refund of a premium or agent’s commission, often illegal in the insurance industry.

Reinsurance – Insurance bought by an insurance company from another insurer to partially protect against the risk of a large loss.

Reinsurance Ceded – The unit of insurance passed from the primary insurer to the reinsurer.

Reinsurance Recoverable – The amount of money that an insurance company expects to recover from a reinsurance company to cover part of the losses it has paid to policyholders.

Reinsurance Treaty – An agreement between a ceding insurer and a reinsurer that defines the terms of the reinsurance arrangement.

Renewable Term Insurance – Term life insurance that can be renewed at the end of the term at the option of the policyholder without providing evidence of insurability.

Renewal – Continuation of coverage for an additional period after expiration of a policy.

Replacement Cost – The cost to replace damaged personal property without deducting for depreciation.

Reporting Form – A policy that provides coverage on property for which values change frequently and requires periodic reports of the values at risk.

Rescission – The termination of an insurance contract by the insurer or insured through the cancellation process.

Reserve – An amount set aside for future insurance claims, known or unknown at a given date.

Retention – The amount of risk retained by an insurance company that is not reinsured.

Retrocession – The portion of risk that a reinsurance company cedes or amounts of insurance the company chooses not to retain.

Rider – An amendment to an insurance policy that modifies the conditions of the policy by expanding or restricting its benefits or excluding certain conditions from coverage.

Risk – The possibility of loss or injury.

Risk Assessment – The evaluation of the likelihood and potential financial impact of risks.

Risk Management – The practice of identifying, analyzing, and controlling risk.

Risk Retention Groups – Mutual groups owned by their members who usually have similar or related business interests, formed to insure members’ risks.

Robbery – The taking of property by force or fear from the care and custody of a person.

Rollover – The process of moving a retirement account from one qualified plan or custodian to another without incurring tax penalties.


Salvage – The amount of money or property retained by an insurance company from the sale of damaged property after a loss.

Schedule – A list of individual items or groups of items that are covered under one policy or a list of specific benefits, charges, units, or other terms and conditions of an insurance contract.

Scheduled Property – Property listed on a schedule attached to a policy with specific values placed upon it.

Second-to-Die Insurance – A life insurance policy that pays out upon the death of the second insured person, typically used by married couples to plan for estate taxes or charitable giving.

Section 125 Plan – A cafeteria plan which allows employees to pay certain qualified expenses, such as health insurance premiums, on a pre-tax basis, thereby reducing their total taxable income and increasing their spendable/take-home income.

Securitization of Insurance Risk – A method for insurance companies to access capital and hedge risks by converting policies into securities that can be sold in financial markets.

Self-Insured Retention (SIR) – The amount of risk retained by a policyholder before the insurance coverage kicks in.

Separate Account – An investment option that is legally segregated from the insurance company’s general account, often found in variable life and variable annuity products.

Short-Rate Cancellation – A cancellation by the insured that refunds the unearned premium minus an administrative charge.

Single-Premium Whole Life Policy – A whole life insurance policy that is fully paid-up by paying one lump sum premium at the outset.

Soft Market – A competitive market phase with lower premiums and looser underwriting standards.

Special Damages – Compensation for measurable monetary losses, such as medical bills and lost wages, also known as economic damages.

Specified Disease Insurance – Insurance that provides benefits for the diagnosis and treatment of a specifically named disease or diseases, such as cancer.

Specified Peril – A hazard that is specifically listed as covered in an insurance policy.

Split Limit – Any insurance coverage with separately stated limits for different types of claims.

Standard of Care – The degree of care and diligence expected of a reasonable person under the same or similar circumstances.

Standard Risk – A person who, according to a company’s underwriting standards, is entitled to insurance protection without special restrictions or extra rating.

Statute of Limitations – The period of time in which legal action must be brought for an alleged damage or injury.

Statutory Accounting Principles (SAP) – The accounting principles required by statute, which must be followed by an insurance company when submitting financial reports to state insurance departments.

Steering – The practice of directing claimants to or away from specific repair shops, doctors, or lawyers, possibly with illegal or unethical intentions.

Stop-Loss Insurance – A policy designed to limit claim coverage losses to a specific amount. This type of coverage is particularly relevant to self-funded health plans.

Sublimit – A limitation in an insurance policy on the amount of coverage available to cover a particular type of loss.

Subrogation – The process by which an insurance company, after paying a loss, seeks to recover the amount of the loss from another party who is legally liable.

Surety Bond – A contract in which one party guarantees to another that a third party will perform a contract or fulfill an obligation.

Surplus – The difference between the assets and liabilities of an insurance company.

Surplus Lines – Insurance sold by insurers not licensed in the states where the risk is located, typically used for high risk that cannot be insured in the regular market.

Surrender Charge – A fee charged to a policyholder when a life insurance policy or annuity is surrendered for its cash value.

Surrender Period – A set amount of time during which a policyholder is unable to withdraw funds from an annuity without facing a penalty for early withdrawal.

Survivorship Life – A life insurance policy that insures two lives and pays a death benefit upon the death of the second insured individual, often used for estate planning.


Term Insurance – Life insurance that provides coverage for a specified period and does not build up cash value.

Term Life Insurance – A life insurance policy that provides a stated benefit upon the holder’s death, provided that the death occurs within a certain specified time period, after which the policy expires without value.

Territorial Rating – A method of determining insurance rates based on the location where a vehicle is primarily used or garaged.

Third-Party Administrator (TPA) – An organization that processes insurance claims or certain aspects of employee benefit plans for a separate entity.

Third-Party Coverage – Liability coverage for damage done to a third party.

Third-Party Owner – A policy owner who is not the insured (covered person).

Total Disability – A condition in which an individual is unable to work at any job due to a disability.

Total Loss – A loss of sufficient size so that it can be said there is nothing left of value. In auto insurance, a car is often declared a total loss when repair costs exceed its value.

Tort – A civil wrong that causes someone else to suffer loss or harm, resulting in legal liability for the person who commits the tortious act.

Travel Insurance – Insurance to cover problems associated with traveling, generally including trip cancellation, lost luggage, medical emergencies, and other losses incurred while traveling.

Treaty Reinsurance – A form of reinsurance in which the reinsurer agrees to accept all of a certain type of risk from the ceding insurance company.

Twisting – The act of persuading a policyholder to drop an existing insurance policy and take a new policy, typically to the detriment of the policyholder.

Term Conversion Credit – A provision in some term life insurance policies that allows the policyholder to convert to permanent insurance without a medical exam and receive a credit for some or all of their term insurance premiums.

Third-Party Claim – A claim filed by an individual against a policyholder of another company, not with their own insurer.

Title Insurance – Insurance that protects the owner of property or the lender of money for the purchase of property against loss arising out of disputes over ownership of the property.

Total Permanent Disability (TPD) – A condition in which an individual is unable to ever work again in their profession due to a disability.

Tranche – A portion of something, typically a loan or investment, that is divided into tranches with varying levels of risk, reward, and maturity.

Trend Analysis – An analytical technique used to predict future movements in insurance premiums based on historical data.

Trustee – An individual person or member of a board given control or powers of administration of property in trust with a legal obligation to administer it solely for the purposes specified.

Truth in Lending Act (TILA) – A U.S. federal law designed to promote the informed use of consumer credit by requiring disclosures about its terms and cost.

Term Rider – An attachment to a policy that provides additional term life coverage on the insured or another person.


Underinsurance – The situation where policyholders do not have enough insurance coverage to fully cover potential losses.

Underlying Interest – The asset, liability, or other interest underlying a derivative security or insurance coverage.

Underwriter – The person who reviews and evaluates an application for insurance and decides if the applicant should be accepted and at what premium rate.

Underwriting – The process by which insurers assess the risk of insuring a home, car, driver, or individual for the purpose of deciding whether to provide insurance and at what cost.

Underwriting Profit – The money an insurance company has left over after paying all claims and expenses.

Unearned Premium – The portion of a premium that has been paid in advance and for which protection has not yet been provided.

Uninsurable Risk – A condition or situation that poses such a dangerous exposure to loss that an insurer will not cover it.

Uninsured Motorist Coverage – A provision in a car insurance policy that provides protection when an accident is caused by a driver who does not have liability insurance.

Uninsured Motorist Property Damage (UMPD) – Coverage that reimburses for property damage caused by an uninsured driver.

Universal Life Insurance – A flexible premium life insurance policy under which the policyholder may change the death benefit from time to time and vary the amount or timing of premium payments.

Unreported Claims – Claims that have occurred but have not yet been reported to the insurance company.

Usual, Customary and Reasonable (UCR) Charges – The amount paid for a medical service in a geographic area based on what providers in the area usually charge for the same or similar medical service.

Utilization Review – An assessment of the appropriateness and economic necessity of health care services and procedures.

Umbrella Policy – Extra liability insurance coverage that goes beyond the limits of the insured’s homeowners, auto, or watercraft insurance.

Underlying Coverage – The insurance coverage that provides primary protection and under which an umbrella or excess coverage policy provides additional coverage.

Unoccupancy – A situation in which a property is not occupied or lived in, but furniture and other belongings may still be present.

Utmost Good Faith – A basic principle of insurance that requires both parties to an insurance contract to deal in good faith, making a full declaration of all material facts in the insurance proposal.

Underwriting Association – A collective of insurers or reinsurers that pool resources to underwrite insurance for a particular hazard.

Underwriting Expense Ratio – A measure of an insurance company’s operating costs in relation to its underwriting income.

Underwriting Guidelines – The criteria used by insurance companies to evaluate the risk of insuring a particular person or property.


Valuation – The process of determining the worth of an insured item or property, or the amount of a loss.

Valued Policy – An insurance policy that pays a stated amount in the event of a total loss of the property insured, without regard to the actual value of the property at the time of the loss.

Variable Annuity – An annuity plan that provides a variable rate of return based on the market performance of the investment options chosen by the policyholder.

Variable Life Insurance – A form of life insurance where the benefits are linked to the performance of the investment funds chosen by the policyholder.

Variable Universal Life Insurance (VUL) – A type of life insurance that combines features of variable and universal life insurance; it provides the investment flexibility of a variable policy and the premium and death benefit flexibility of a universal policy.

Vicarious Liability – The assignment of liability to one person for the negligent actions of another, even though the first person was not directly responsible for the injury.

Void – A policy contract that is deemed invalid from its inception because it lacks one or more of the essential elements of a valid contract.

Voluntary Compensation Endorsement – An endorsement providing coverage in a workers’ compensation policy that extends benefits to workers who may not be legally entitled to workers’ compensation benefits.

Voluntary Market – Refers to the regular market where an insured can voluntarily purchase insurance at a standard or preferred rate.

Volume Discount – A discount on the insurance premium based on the volume of business that an insured may provide to an insurer.

Voyage Policy – A type of marine insurance policy that covers goods over a particular voyage or trip.

Valuable Papers Insurance – Coverage that pays the cost to research, replace or restore the lost information on valuable papers such as wills, trusts, corporate charters, etc.

Variable Rate Mortgage (VRM) – A type of home loan in which the interest rate is not fixed but can vary with market conditions.

Vandalism – The intentional and malicious destruction of or damage to the property of another, which is a peril typically covered under property insurance policies.

Vanishing Deductible – An optional car insurance feature that reduces the collision deductible for each year a driver remains accident-free.

Viatical Settlement – Selling a life insurance policy to a third party for less than its net worth but more than its cash surrender value. Typically, the seller is terminally ill and in need of immediate cash.

Vision Insurance – A health benefit that at least partially covers vision care, like eye exams and glasses.


Waiver – An endorsement to an insurance policy that excludes certain illnesses or disabilities that would otherwise be covered by the policy.

Waiver of Premium – A provision in some insurance policies that enables an insurance policy to remain in force without the payment of premiums after the occurrence of a specified event, such as a critical illness or disability of the policyholder.

Waiver of Subrogation – A clause in which an insured waives the right of their insurance carrier to seek compensation for losses from a negligent third party.

Warranty – A statement or stipulation in an insurance contract that certain conditions will be met.

Water Damage Legal Liability – Insurance coverage that protects property owners against claims of legal liability for damage to another’s property from water leakage or overflow.

Weather Insurance – A type of insurance that provides coverage for financial losses caused by adverse weather conditions.

Whole Life Insurance – A type of life insurance policy that remains in force for the insured’s whole life and typically builds up a cash value.

Windstorm Insurance – Insurance covering damage to a property caused by windstorms.

Workers’ Compensation – A form of insurance that provides compensation medical care for employees who are injured in the course of employment, in exchange for mandatory relinquishment of the employee’s right to sue their employer for the tort of negligence.

Workers’ Compensation Insurance – Insurance that covers an employer’s obligations under workers’ compensation laws, which typically require employers to pay for injuries to employees that occur on the job.

Write – To underwrite or issue an insurance policy, thereby assuming responsibility for the risk.

Written Premium – The total amount of premium charged for all policies written by an insurance company during a specific period of time.

Wrap-Up Insurance – A liability policy that serves as all-encompassing insurance which protects all contractors and subcontractors working on a large project.

Waiting Period – The time between the beginning of a disability and the start of disability insurance benefits.

Warehouse-to-Warehouse – A clause in marine insurance which provides that the insurer is liable for loss or damage to goods at any time between the start of transit and delivery.

Wear and Tear Exclusion – A provision in an insurance contract that excludes coverage for damage caused by normal wear and tear.

Wedding Insurance – A type of special event insurance that covers losses associated with a wedding.

Wholesale Insurance – Insurance coverage for retailers, wholesalers, and distributors.

Whole Account – An insurance term used to describe coverage that protects all of an insured’s interests in a particular area, rather than just specific parts.

Without Prejudice – A legal term meaning ‘without detriment to any existing right or claim’. In insurance claims, it refers to an agreement to proceed with a claim without affecting the rights or claims of the involved parties.


X-Dates – This term refers to the expiration dates of policies. In insurance, keeping track of “x-dates” is important for both insurers and policyholders. Insurers need to know when policies are due to expire so they can send out renewal notices. Policyholders should be aware of their policy’s x-date to ensure they renew their coverage on time, to explore other insurance options before the policy lapses, or to ensure they are not without coverage if they choose not to renew.


Yearly Renewable Term (YRT) – A type of term life insurance policy that is renewable each year without the need for the insured to provide evidence of insurability.

Yearly Price Update – In some types of insurance, particularly property, this refers to the annual adjustment of premium to reflect changes in costs or values.

Yield – The return on an investment or the amount of profit, stated as a percentage of the amount invested.

Yield to Maturity (YTM) – The rate of return anticipated on a bond if it is held until the maturity date, which is considered when pricing life insurance policies.

Yacht Insurance – A specialized form of marine insurance designed to provide coverage for private pleasure boats and yachts.


Zero Depreciation Cover – Also known as “bumper to bumper” cover, it’s an add-on in car insurance policies where the insurer covers the full cost of replacing damaged parts without deducting for depreciation.

Zoning – Zoning laws can affect the use of property and may be a consideration in underwriting property insurance.

Zurich, Declaration of – An international agreement that outlines uniform rules and standards for marine cargo insurance.

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