Insurance final

Actual Cash Value

The limit of indemnification under the Standard Fire Policy and other property contracts; in most cases, it is replacement cost minus depreciation.

Adjuster

one who settles insurance claims; may be a salaried employee or an independent operator.

Automobile Liability Insurance

a form of liability insurance that is specifically designed to indemnify for loss incurred

through legal liability for bodily injury and damage to the property of others caused by accident arising out of ownership or operation of an automobile.

Beneficiary

one for whose benefit a contract is made: the person to whom a policy of insurance is payable.

Casualty Insurance

a classification of insurance coverages used in the monoline era consisting of workers compensation, liability, crime, glass, and boiler coverages, used to distinguish such coverages from “fire” or property coverages.

Claim

notification to an insurance company that payment of an amount is due under the terms of a policy.

Coinsurance

in property and casualty insurance, a clause or provision in an insurance policy requiring a specified amount of insurance based on the value of the property insured; normally, there is a premium reduction for purchasing insurance to some percentage of the value of the property—if the insured fails to comply with the clause, he or she will suffer a penalty in the event of partial loss; in health insurance, a policy provision requiring the insured to share a given percentage of the loss.

Deductible

a provision whereby an insured may be required

to pay part of a loss, 

Exclusions

that which is expressly eliminated from the coverage

of an insurance policy.

Health Insurance

a generic term applying to all types of insurance indemnifying or reimbursing for losses caused by bodily accident or sickness or for expenses of medical treatment necessitated by sickness or accidental bodily injury

Insurance

an economic device whereby the individual substitutes a small certain cost (the premium) for a large uncertain financial loss (the contingency insured against) that would exist if it were not for the insurance contract, an economic device for reducing and eliminating risk through the process of combining a sufficient number of homogeneous exposures into a group in order to make the losses predictable for the group as a whole.

Law of Large Numbers

the theory of probability that is the basis for insurance; the larger the number of exposures

units, the more closely will the actual results obtained approach the probable results expected from an infinite number of exposures.

Medicaid

state programs of public assistance to persons

regardless of age whose income and resources are insufficient

to pay for health care. Title XIX of the federal Social Security

Act provides matching federal funds for financing state Medicaid

programs.

Medicare

hospital and medical expense insurance provided

under the Social Security system.

Medicare Advantage Plan

An HMO, PPO, or private fee-for-service plan that contracts with Medicare to provide Part A and Part B benefits to subscribers; a Medicare Advantage Prescription Drug Plan also includes drug benefits.

Premium

the payment, or one of the periodical payments, a policyholder agrees to make for an insurance policy.

Property Insurance

Rate

the cost of a unit of insurance.

Risk

in the abstract, used to indicate a condition of the real

world in which there is a possibility of loss; also used by insurance

practitioners to indicate the property insured or the peril insured

against.

Term Insurance

insurance payable to a beneficiary at the death of the insured, provided death occurs within a specified period, such as 5 or 10 years, or before a specified age.