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The business that provides protection to individuals and organizations against the threat of sudden and accidental loss.
Insurance typically is broken down between property-casualty and life-health. From there it can also be broken down into insurance sold commercially and insurance that is sold to individuals or personal.
All definitions are taken from Barron's Dictionary of Insurance Terms by Harvey Rubin, Barron's Educational Series, Hauppauge, New York 2000.
All Risks Coverage - insurance that covers each and every loss except for those specifically excluded. If the insurance company does not specifically exclude a particular loss it is automatically covered. This is the broadest type of property policy that can be purchased.
Automobile Liability Insurance - coverage if an insured is legally liable for bodily injury or property damage caused by an automobile. Experts advise against driving an automobile without automobile liability insurance as a matter of common sense, and because state laws require such a policy as evidence of financial responsibility.
Business Insurance - coverage designed to protect against loss exposures of business firms, as opposed to those of individuals.
Collision Insurance - in automobile insurance, coverage providing protection in the event of physical damage to the insured's own automobile resulting from collision with another inanimate object.
Commercial Health Insurance - coverage that provides two types of benefits, disability income, and medical expenses. Sold by insurance companies whose motive is the profit motive.
Comprehensive Insurance - coverage in automobile insurance providing protection in the event of physical damage (other than collision) or theft of the insured car.
Deductible - the amount of loss that insured pays in a claim.
Group Health Insurance - coverage underwritten on members of a natural group, such as employees of a particular business, union, association, or employer group. Each member is entitled to benefits for hospital room and board, surgeon and physician fees, and miscellaneous medical expenses.
Health Maintenance Organization - prepaid group health insurance plan that entitles members to services of participating physicians, hospitals, and clinics. Emphasis is on preventive medicine. Members of the HMO pay a flat periodic fee for these medical services.
Homeowners Insurance - package policy that combines coverage of the insured's property being destroyed or damaged by various perils, and coverage for liability exposure of the insured. Homeowners policies cover both individuals as well as property.
Indemnity - compensation for a loss.
Liability Insurance - coverage for all sums that the insured becomes legally obligated to pay because of bodily injury or property damage, and sometimes other wrongs to which an insurance policy applies.
Life Insurance - protection against the death of an individual in the form of payment to a beneficiary usually a family member, a business, or institution.
Named Peril Policy - insurance contract under which covered perils are listed. If an unlisted peril strikes no benefits are paid.
Premium - rate that an insured is charged, reflecting his or her expectation of loss or risk. The insurance company will assume the risks of the insured in exchange for the premium payment.
Reinsurance - form of insurance that insurance companies buy for their own protection, "a sharing of insurance." An insurer reduces its possible maximum loss on either an individual risk or a large number of risks by giving a portion of its liability to another insurance company.
Rider - endorsement to an insurance policy that modifies clauses and provisions of the policy, including or excluding coverage.
Risk - uncertainty of a financial loss; term used to designate an insured or peril insured against.
Risk Management - procedure to minimize the adverse effects of a possible financial loss by identifying potential sources of loss ; measuring the financial consequences of a loss occurring; And using controls to minimize actual losses or their financial consequences.
Social Insurance - compulsory employee benefit plan under which participants are entitled to a series of benefits as a matter of right.
Underwriting - process of examining, accepting, or rejecting insurance risks, and classifying those accepted, in order to charge the proper premium for each. The purpose of underwriting is to spread the risk among a pool of insured in a manner that is equitable for the insured and profitable for the insurer.
Previously maintained by
Pittsburg State University
Arapahoe Community College
University of Minnesota - Twin Cities
University of North Carolina - Greensboro
Originally created by
Joseph E. Straw,
University of Akron
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