Key Concepts in Insurance Policies and Coverage

Free Look period

A period (usually 10-30 days) during which a policyholder can review and cancel a policy for a full refund if dissatisfied.

Insuring agreement

The section of an insurance policy that outlines the covered risks, policy terms, and obligations of the insurer.

Employee dishonesty coverage

It covers a business for losses due to an employee's theft of money, property, or securities.

Adjustable life insurance policy

A flexible policy where the policyholder can adjust premiums, face amount, and coverage length.

Dwelling policy exclusions

It does not cover liability, theft, or personal property unless specifically added.

Certificate of Insurance (COI)

A document that provides proof of insurance coverage.

Supplementary costs in liability insurance

Expenses covered beyond the primary coverage, such as legal fees, bail bonds, and loss of earnings due to court appearances.

Class in insurance rating

A group of businesses with similar risks used for rating purposes.

Classification in insurance

The process of creating general categories for businesses based on their risk exposure.

General aggregate limit in liability insurance

The maximum total coverage amount available under Coverages A, B, and C, excluding the products-completed operations hazard.

Punitive damages

Financial penalties awarded to punish a defendant for reckless or malicious behavior.

Notice of claim provision

A policy requirement that the insured must notify the insurer of a claim within a specified timeframe.

Spouse term insurance rider

A life insurance policy add-on that provides temporary coverage for the insured's spouse.

Countersignature in insurance

The licensed agent's signature required to validate an insurance policy.

Hired auto insurance policy

Coverage for vehicles rented, leased, or borrowed for business purposes.

Coverage A in homeowners policy

The main dwelling, attached structures, and necessary fixtures or materials on the premises.

Coverage B in homeowners policy

Other structures separate from the main dwelling, such as detached garages and sheds, excluding business-use structures or non-tenant rental properties.

Coverage C in homeowners policy

Personal property, including coverage for belongings at home or temporarily stored elsewhere, with exclusions for roomers' property, motorized vehicles, and credit cards.

Coverage D in homeowners policy

Loss of use, including additional living expenses and fair rental value if the insured dwelling becomes uninhabitable.

Reimbursement methods under Coverage D

1) Additional living expense (maintains standard of living) 2) Fair rental value (reimburses lost rental payments).