This is
a list of terms found in the department's brochures. It is not
meant to be all inclusive, but should help with your understanding
of the documents.
A
| B | C | D
| E | F | G
| H | I-J-K | L
| M-N-O| P-Q | R
| S-T | U-V-W-Y-Z
An amount equivalent to the fair market value of the stolen
or damaged property immediately preceding the loss. For real
property, this amount can be based on a determination of the
fair market value of the property before and after the loss.
For vehicles, this amount can be determined by local area private
party sales and dealer quotations for comparable vehicles.
An insurance company authorized to do business in California.
A licensed person or organization authorized to sell insurance
by or on behalf of an insurance company.
Coverage for the insured in the event that the insured's negligent
acts and/or omissions result in losses in connection with the
use, ownership, or maintenance of aircraft.
Coverage on the risks associated with driving or owning an automobile.
It can include collision, liability, comprehensive, medical,
and uninsured motorist coverages.
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A temporary or preliminary agreement which provides coverage
until a policy can be written or delivered.
Any physical injury to a person. The purpose of liability
insurance is to cover bodily injury to a third party resulting
from the negligent or unintentional acts of an insured.
Covers losses resulting from the malfunction of boilers and
machinery. This coverage is usually excluded from property
insurance creating the need for this separate product.
A licensed person or organization paid by you to look for insurance
on your behalf.
Coverage against loss as a result of forced entry into premises.
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The termination of insurance coverage during the policy
period. Flat cancellation is the cancellation of a policy as
of its effective date, without any premium charge.
Notice to an insurer that under the terms of a policy, a loss
maybe covered.
The first or third party. That is any person who asserts right
of recovery.
Reimburses you for damage to YOUR automobile sustained
in a collision with another car or with any other object, movable
or fixed, (for example, you accidentally backed into another
object while pulling out from a parking stall and causing damage
to the bumper and fender of your covered automobile).
This coverage waves your collision deductible if you are hit
by an negligent uninsured motorist. COMMON
CARRIER LIABILITY Coverage for transportation firms that
must carry any customer's goods so long as the customer is willing
to pay. Examples include trucking companies, bus lines,
and airlines.
Provides coverage for any direct and accidental loss of, or
damage to, YOUR covered automobile and its normal equipment,
to include but not limited to fire, theft or malicious mischief.
Coverage on an "all risks" basis for glass breakage, subject
to exclusions of war and fire.
Insurance issued to a creditor (lender) to cover the life of
a debtor (borrower) for an outstanding loan.
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The company refuses to accept the request for insurance coverage.
The amount of the loss which the insured is responsible to pay
before benefits from the insurance company are payable. You
may choose a higher deductible to lower your premium.
A decrease in value due to age, wear and tear, etc.
Health insurance that provides income payments to the insured
wage earner when income is interrupted or terminated because
of illness, sickness, or accident.
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Amendment to the policy used to add or delete coverage. Also
referred to as a "rider."
Certain causes and conditions, listed in the policy, which are
not covered.
The date on which the policy ends.
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the insured dies. It does not include other amounts that may
be paid from insurance purchased with dividends or any policy
riders.
A surety bond, insurance policy or, when issued by
an insurer, an indemnity contract and any guaranty similar to
the foregoing types, under which loss is payable upon proof
of occurence of financial loss to an insured claimant, obligee,
or indemnitee.
Coverage for loss of or damage to a building and/or contents
due to fire.
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To be eligible for the Good Drivers Discount all operators of
the insured vehicles must have been licensed for three or more
year, have no more than a one (1) point charge on their driving
record and has not been determined "at fault" in an accident
resulting in bodily injury or death to any person.
A period (usually 31 days) after the premium due date, during
which an overdue premium may be paid without penalty. The policy
remains in force throughout this period.
An option that permits the policy holder to buy additional stated
amounts of life insurance at stated times in the future without
evidence of insurability.
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A policy that will pay specifies sums for medical expenses or
treatments. Health policies can offer many options and vary
in their approaches to coverage.
An elective combination of coverages for the risks of owning
a home. Can include losses due to fire, burglary, vandalism,
earthquake, and other perils.
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A policy provision in which the company agrees not to contest
the validity of the contract after it has been in force for
a certain period of time, usually two years.
The policyholder - the person(s) protected in case of a loss
or claim.
The insurance company.
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Prepaid legal insurance coverage plan sold on a group basis.
This coverage will pay for BODILY INJURY and/or PROPERTY DAMAGE
to the OTHER party for which you become legally responsible
of an
automobile accident.
Coverage for all sums that the insured becomes legally obligated
to pay because of bodily injury or proprty damage, and sometimes
other wrongs, to which an insurance policy applies.
A policy that will pay a specified sum to beneficiaries upon
the death of the insured.
Maximum amount a policy will pay either overall or under a particular
coverage.
The amount which can be borrowed at a specified rate
of interest from the issuing company by the policyholder, using
the value of the policy as collateral. In the event the policyholder
dies with the debt partially or fully unpaid, then the amount
borrowed plus any interest is deducted from the amount payable.
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Coverage for goods in transit and the vehicles of transportation
on waterways, land, and air.
The policyholder / applicant makes a false statement of any
material (important) fact on his/her application. For instance,
the policyholder provides false information regarding the location
where the vehicle is garaged.
Will pay reasonable expenses incurred for necessary medical
and /or funeral services because of bodily injury caused by
accident and sustained by YOU OR ANY OTHER PERSON WHILE OCCUPYING
A COVERED AUTOMOBILE.
Includes insurance against loss from damage done, directly or
indirectly by lightning, windstorm, tornado, earthquake or insurance
under an open policy indemnifying the producer of any motion
picture, television, theatrical, sport, or similar production,
event, or exhibition against loss by reason of the interruption,
postponement, or cancellation of such production, event, or
exhibition due to death, accidental injury, or sickness preventing
performers, directors, or other principals from commencing or
continuing their respective performance or duties; and any insurance
not included in any other classes and which is a proper subject
of insurance (California Insurance Code §120).
An incorrect estimate of the insurance premium.
Life insurance that pays the balance of a mortgage if the mortgagor
(insured) dies.
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The cause of a possible loss. For example, fire, theft, or hail.
The written contract of insurance.
The maximum amount a policy will pay, either overall or under
a particular coverage.
The amount of money an insurance company charges for insurance
coverage.
A a policyholder contracts with a lender to pay the insurance
premium on his/her behalf. The policyholder agrees to repay
the lender for the cost of the premium, plus interest and fees.
When the policy is terminated midterm by the insurance company,
the earned premium is calculated only for the period coverage
was provided. For example: an annual policy with premium of
$1,000 is cancelled after 40 days of coverage at the company's
election. The earned premium would be calculated as follows:
40/365 days X $1,000=.110 X $1,000=$110.
Damage to another person's property. The purpose of liability
insurance is to cover property damage to a third party resulting
from the negligent or intentional acts of an insured.
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An estimate of the cost of insurance, based on information supplied
to the insurance company by the applicant.
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The cost to repair or replace an insured item. Some insurance
only pays the actual cash or market value of the item at the
time of the loss, not what it would cost to fix or replace it.
If you have personal property replacement cost coverage, your
insurance will pay the full cost to repair an item or buy a
new one once the repairs or purchases have been made.
The full cost to repair or replace the damaged property with
no deduction for depreciation, subject to policy limits and
contract provisions.
The restoring of a lapsed policy to full force and effect. The
reinstatement may be effective after the cancellation date,
creating a lapse of coverage. Some companies require evidence
of insurability and payment of past due premiums plus interest.
Usually known as an endorsement, a rider is an amendment to
the policy used to add or delete coverage.
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When the policy is terminated prior to the expiration date at
the policyholder's request. Earned premium charged would be
more than the pro-rata earned premium. Generally, the return
premium would be approximately 90 percent of the pro-rata return
premium. However, the company may also establish its own short-rate
schedule.
A licensed employee of a fire and casualty agent or broker who
may act for the agent or broker in some circumstances.
Coverage for property damage caused by untimely discharge from
an automatic sprinkler system.
An extra charge applied by the insurer. For automobile insurance,
a surcharge is usually for accidents or moving violations.
To terminate or cancel a life insurance policy before the maturity
date. In the case of a cash value policy, the policyholder may
exercise one of the nonforfeiture options at the time of surrender.
Includes insurance against loss through damage or legal liability
for damage, to property caused by the use of teams or vehicles
other than ships, boats, or railroad rolling stock, whether
by accident or collision or by explosion of engine, tank, boiler,
pipe, or tire of the vehicle, and insurance against the theft
of the whole or part of such vehicle (California Insurance Code
§115).
Coverage for losses if a land title is not free and clear of
defects that were unknown when the title insurance was written.
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The process of selecting applicants for insurance and classifying
them according to their degrees of insurability so that the
appropriate premium rates may be charged. The process includes
rejection of unacceptable risks.
Will pay you and your passengers for BODILY INJURY cause by
a negligent uninsured motorist, a hit-and-run driver, or by
a driver whose insurer is insolvent.
Will pay for damages to your automobile, set up to a limit,
when caused by a negligent unisured motorist.
A period of time set forth in a policy which must pass
before some or all coverages begin.
Coverage providing four types of benefits (medical care, death,
disability, and rehabilitation) for employee job-related injuries
or diseases as a matter of right (without regard to fault).
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A person in custody whose release may be secured by posting
bail.
- A person or concern having possession of property committed
in trust from the owner.
- A guarantee that the contractor will enter into
a contract, if it is awarded to him, and furnish such contract
bond (sometimes called "performance bond") as is required by
terms thereof.
- All bonds and undertakings required of litigants
to enable them to pursue certain remedies of the courts.
- The date on which an insurance policy or bond
goes into effect, and from which protection is furnished.
- An obligation of the insurance company against
financial loss caused by the dishonest acts of employees.
- A bond required in civil and criminal court actions.
- A fidelity bond providing coverage for
persons listed or scheduled on the bond.
- Broadly, anyone in whose favor an obligation runs. Frequently
used in surety bonds, this refers to the person, firm or corporation
protected by the bond.
- Commonly called "principal," one bound by an obligation. Under
a bond, strictly speaking, both the principal and the surety
are obligers.
- Authority given one person or corporation
to act for and obligate another, to the extent laid down in
the instrument creating the power.
- A person or organization whose obligation are guaranteed by
a bond.
- An arrangement whereby one party becomes answerable to a third
party for the acts of a second party. Customarily an insurance
company, the party in a suretyship arrangement who holds himself
responsible to one person for the acts of another.
- A bond which the surety agrees to answer
to the obligee for the non-performance of the principal (also
known as the obligor).
- Stated in its simplest terms, suretyship embraces all forms
of obligation to pay debts or answer for the default of another.
