About Insurance Terms
Please note that while these terms are generally used as described below, in the insurance industry, any given company may define these terms differently, in which case that company’s contract would control.
Actual Cash Value: The value of property based on the cost of repairing or replacing it with property of the same kind and quality. Typically, actual cash value equals the current replacement cost minus depreciation (age, condition, length of time in use, and obsolescence).

Agent: In insurance, the person authorized to represent the insurer in negotiating, servicing, or effecting insurance policies.

Annuity: A contract that provides for a series of periodic payments to be made or received at regular intervals.

Applicant: The party applying for an insurance policy.

Application: A printed form developed by an insurer that includes questions about the prospective insured and the desired insurance coverage and limits.

Assigned Risk: A risk insured through a pool of insurers and assigned to a specific insurer. These risks are generally considered undesirable by underwriters, but due to state law or otherwise, they must be insured.

Auto Collision Coverage: Optional auto insurance which pays for damage to your car caused by collision with another car or object, or by rolling the car over. Frequently required if you have a car loan.

Auto Comprehensive Physical Damage Coverage: Optional auto insurance which pays for damage to your auto caused by things other than collision or rolling the car over, such as fire, theft, vandalism, flood or hail. Frequently required if you have a car loan.

Automatic Premium Loan: A provision in some life insurance policies that authorizes a policy loan using the cash value accumulated by the insurance policy to pay for past due premiums at the end of the grace period. This prevents a lapse of coverage

Beneficiary: Any person, persons, or other entity designated to receive the policy benefits upon the death of the policyholder.

Binding Receipt: A premium receipt acknowledging temporary insurance coverage immediately until the insurance company rejects the application or approves it and issues a policy.

Cash Value (cash surrender value): The cash amount payable to a life insurance policy owner in the event of termination or cancellation of the policy before its maturity or the insured event.

Claim: A person’s request for payment from an insurer for a loss covered by the insurance policy.

Conditions: The part of your insurance policy that states the obligations of the person insured and those of the insurance company.

Contingent Beneficiary: In a life insurance policy, the person designated to receive the policy benefits if the primary beneficiary dies before the insured.

Contract: A legally enforceable agreement between two or more parties.

Conversion Privilege: The right to convert or change insurance coverage from an individual term insurance policy to an individual whole life insurance policy.

Convertible Term Life Insurance: A type of term life insurance that offers the policy owner the option to exchange the term policy for a form of permanent insurance. [top]

Deductibles: The portion of the loss that the policyholder agrees to pay out of pocket, before the insurance company pays the amount they are obligated to cover. For example, if the covered claim is $1000 and your deductible is $250, you pay $250 and your company will pay $750. Deductibles help to keep insurance rates reasonable. Raising the amount of the deductible lowers the cost of insurance.

Depreciation: Reduction in the value of property due to age and use.

Endorsement: Attachment or addendum to an insurance policy; an endorsement changes the contract’s original terms.

Extended Term Life Insurance: A nonforfeiture benefit under which the net cash value of the policy is used to purchase term insurance for the amount of coverage available under the original policy. [top]

Face Amount: The amount stated in the life insurance policy as the death benefit.

Grace Period: The specified length of time, after a Life or Health premium payment is due in which the insured may make the payment and keep the policy in force. (Usually 30 days.)

Group Health Insurance: An insurance plan designed for a group, such as employees of a single employer. Insurance is provided to them under a single policy.

Incontestable Clause: A life insurance policy wording that provides a time limit (e.g. two years) on the insurer’s right to dispute a policy’s validity based on material misstatements in the application.

Insurable Interest: Any interest a person has in property that is the subject of insurance, so that damage to this property would cause the insured a financial loss.

Insurance Company: An organization that has been chartered by a governmental entity to transact the business of insurance.

Insured: The person whose insurable interest is protected under an insurance policy.

Insurer: See Insurance Company.

Irrevocable Beneficiary: A named beneficiary whose rights to life insurance policy proceeds cannot be cancelled or changed by the policy owner unless the beneficiary consents. [top]

Lapse: Termination of a policy due to nonpayment of premiums.

Liability: A legal obligation to compensate a person harmed by one’s acts or omissions.

Liability Coverage: Insurance that provides compensation for a harm or wrong to a third party for which an insured is legally obligated to pay.

Life Insurance: Insurance that pays a specified sum of money to designated beneficiaries if the insured person dies during the policy term.

Loss: A claim either paid or payable due to the insurer’s policy obligations.

Medical Payments Coverage: Medical and funeral expense coverage for bodily injuries sustained from or while occupying an insured vehicle, regardless of the insured’s negligence.

Negligence: Failure to use a generally acceptable level of care and caution.

No-fault Insurance: A system of compensation enacted by law in many states under which indemnification is made by the insured’s own insurance company regardless of who is at fault. Details of this system vary significantly from state to state. [top]

Paid-up Policy: An in-force life insurance policy for which no further premium payments are required.

Peril: The cause of loss or damage.

Permanent Insurance: A general term for ordinary life and whole life insurance policies that remain in effect as long as their premiums are paid.

Personal Property Insurance: Protects against the loss of, or damage to property other than real property (real estate) caused by specific perils.

Policy: The written forms that make up the insurance contract between an insured and insurer. A policy includes the terms and conditions of the coverage, the perils insured or excluded, etc.

Policy Declarations: The part of the insurance contract that lists basic underwriting information, including the insured’s name, address and description of insured locations as well as policy limits.

Policy Limits: The maximum amount an insured may collect or for which an insured is protected, under the terms of the policy.

Policy Loan: A loan from a life insurer to the owner of a policy that has a cash value.

Policyholder: The person who buys insurance.

Policy owner: An individual with an ownership interest in an insurance policy.

Policy Period: The amount of time an insurance contract or policy lasts.

Pre-existing Condition: A physical illness or disability that existed before the health or life insurance policy effective date and generally, which was not disclosed on the application.

Premium: The price for insurance coverage as described in the insurance policy for a specific period of time.

Primary Beneficiary: The person designated as the first to receive the proceeds of a life insurance policy upon the death of the insured.

Proof of Loss: A sworn statement that usually must be furnished by the insured to an insurer before any loss under a policy may be paid.

Protection Amount: The face amount of a life insurance policy, or amount of money that will be paid to a beneficiary upon the death of an insured. This amount will be reduced by the amount of any outstanding policy loan.

Reimbursement: The payment of an amount of money by an insurance policy for a covered loss.

Reinstatement: The process by which a life insurance company puts back in force a policy that has lapsed or has been canceled for nonpayment of premium.

Renewable Term Life Insurance: A renewable life policy permits the owner of the policy to automatically renew the policy beyond its original term by acceptance of a premium for a new policy term without evidence of insurability.

Revocable Beneficiary: A life insurance policy whose designation as beneficiary can be revoked or changed by the policy owner at any time prior to the insured’s death.

Riders: An addition to an insurance policy that becomes a part of the contract.

Risk: The possibility or chance of loss or injury.

Settlement: An agreement between a claimant or beneficiary to an insurance policy and the insurance company regarding the amount and method of a claim or benefit payment.

Term Insurance: Life insurance under which the benefit is payable only if the insured dies during a specified period. If the insured survives beyond that period, coverage ceases. This type of policy does not build up any cash or nonforfeiture values.

Theft Limit (or Inside Policy Limits): The highest amount an insurance company will pay on certain items of personal property. For instance, some policies have a $5,000 limit for computers. If an item would cost more than the limit to replace.

Underwriting: The process of reviewing applications for coverage. Applications that are accepted are then classified by the underwriter according to the type and degree of risk.

Uninsured Motorist Coverage: Coverage that pays for covered damage for bodily injury that an uninsured motorist is legally liable but unable to pay.

Special Programs

Assisted Living / Elder Care Industry

The Elder Care market is especially volatile, which makes it important to have an agent who has knowledge about this market and is willing to do the research needed to properly place this type of business.

Our agency has years of experience working with Assisted Living Facilities, Rest Homes, Nursing Homes, Home Health Care Agencies and Adult Day Care Facilities. We understand the inherent differences between these classes of business, and work with our clients to find a policy that is both appropriate and affordable.

Contact us for additional information on this program.

Advanced Technology Program

The rapid growth of high tech companies has changed the way the insurance world is writing coverage. As this industry continues to thrive and grow, the need for sophisticated insurance solutions is becoming more apparent and essential to the future success of the businesses within the technology field.

The advanced technology sector has developing insurance needs that are different and more complex than the average business. The internet has not only changed the way we do business, it has also changed our exposure to potential insurance losses. How much money would you lose if a hacker were to render your web site inaccessible to information seeking and order placing customers? How would you pay for a lawsuit claiming that your product did not perform the way the end user expected? Would you have coverage for an overseas employee whom you have hired to target the emerging markets for you? Traditional insurance policies do not cover these types of exposures, which could end up costing you a lot of money and potentially your business.

We have the ability to provide a flexible and creative program that will offer the solutions needed to not only meet your complex needs, but also to grow with you. Furthermore, the rates are both competitive and custom designed; a combination that allows your business to get a rate that understands your operations and precisely reflects your merits.

Below is a partial list of the technology classes we can help:

Application Service Providers
Electronic Component Parts & Equipment
Computer and Office Equipment
Instruments & Related Products (incl Defense and Industrial Electronics)
Communication Services (incl Internet Services)
Software & Other Computer Related Services
Contact Us for more information about this product.

Manufacturer Program
Our programs for manufacturers are designed to secure solid insurance protection, while providing competitive pricing with a convenient product that is easy to understand. Our programs have a broad range of eligible classes, and are designed to recognize and reward better-run manufacturers.

Below is a partial listing of the manufacturing classes we can help:

Metal Manufacturers
Food Processors
Plastics & Rubber Manufacturers
Contact Us for more information about this product.

Wholesale Program
Wholesale companies have unique needs that are specific to the operations of a sales and distribution business. Our wholesale program provides you the security of knowing these needs are being addressed, while at the same time offering competitive pricing. Both durable and non-durable goods are eligible, and we have a wide variety of classes that are eligible for this program.

Below is a partial listing of the wholesale classes we can help:

Photographic Equipment & Supplies
Office Equipment & Supplies
Restaurant & Hotel Equipment or Fixtures
Ophthalmic Goods
Appliances & Home Furnishings
Electrical Equipment or Electronics
Hardware and Tools
Barber or Beauty Shop Supplies
Janitorial Supplies
Home Furnishings
Beer & Ale, Wine & Distilled Alcoholic Distributors
Books, Periodicals & Newspapers
Fresh Fruits & Vegetables
Contact Us for more information about this product.

Office Program
Owning and operating an office-based business provides a unique set of challenges. Often times, proprietors are continuously being pulled in varying directions and the time to worry about your insurance protection simply does not exist. Our program is designed to provide our customers with a quick process, so they can divert their attention back to the office. We offer a comprehensive product with competitive pricing and the knowledge that ease of doing business is essential.

Below is a partial listing of the office classes we can help:

Publishers  Book & Magazine
Mortgage Brokers
Financial Planners
Real Estate Agents
Advertising Agencies
Commercial Artists & Graphic Designers
Accountants, Engineers or Lawyers
Credit Unions
Dentists & Doctors
Direct Mail Companies
Contact Us for more information about this product.

Service Businesses Program
Businesses providing processing and/or servicing operations have a separate and unique set of insurance concerns. When the customer is always rightyou need to make sure that you are with an insurance company that agrees. Our program gives you the protection your business needs along with the coverages that are necessary to protect against claims based on your professional services.

Below is a partial listing of the service business classes we can help:

Barber & Beauty Shops
Copying and Duplicating Centers
Dental Labs
Funeral Homes
Kennels, Pet Groomers
Travel Agencies
Tailors, Dressmakers & Clothing Alterations
Photographic Studios
Shoe Repair Shops
Court Reporting Services
Electronic Data Processing Operations
Interior Designers
Office Machine Repair
Contact Us for more information about this product.

Retail Shops Program

Understanding how retail businesses work is essential to obtaining the proper type of insurance. There are exposures unique to retail shops, and many coverages that become necessary due to the high level of daily traffic retail businesses experience. You need a policy that will meet your needs throughout the year, while working within your budget.

Below is a partial listing of the retail business classes we can help:

Paint, Wallpaper, and Wall covering Store
Jewelry Stores (including Jewelers Block)
Book Stores
Toy & Hobby Shops
Health Foods
Gift Shops
Clock Stores
Luggage & Leather Goods
Packaging and Mailing Centers
Painting, Picture or Frame Stores