Wieben Insurance Services

Insurance Glossary.....

The information in this glossary is intended to be general in nature and should not be construed as specific recommendations, nor as a substitute for the advice of a professional insurance broker who is familiar with a client's particular exposures or circumstances.

We have endeavored however, to provide information that is as reliable as possible, and request that you contact our professionals at Wieben Insurance Services for the correct application in your particular situation.

California Insurance Guarantee Association (CIGA):

The California Insurance Guarantee Association (CIGA) operates under Sections §1063-1063.77 of the California Insurance Code. CIGA provides a mechanism for the payment of covered insurance claims for property, casualty, and workers' compensation of insolvent insurance companies.

Cancellation:

The termination of an insurance policy usually before its expiration.

Capital:

Equity of shareholders of a stock insurance company. The company's capital and surplus are measured by the difference between its assets minus its liabilities. This value protects the interests of the company's policy owners in the event it develops financial problems; the policyowners' benefits are thus protected by the insurance company's capital. Shareholders' interest is second to that of policy owners.

Captive Agent:

Representative of a single insurer or fleet of insurers who is obliged to submit business only to that company, or at the very minimum, give that company first refusal rights on a sale. In exchange, that insurer usually provides its captive agents with an allowance for office expenses as well as an extensive list of employee benefits such as pensions, life insurance, health insurance, and credit unions.

Care, Custody or Control:

An exclusion of liability insurance which eliminates coverage for damage to property in the insured's care, custody or control.

Carrier:

The insurance company which provides coverage.

Case Management:

A system of coordinating medical services to treat a patient, improve care and reduce cost. A case manager coordinates health care delivery for patients.

Cash Benefits:

The Money that is paid to the policy holder upon settlement of a covered claim.

Cash Value:

The equity amount or "savings" accumulation in a whole life insurance policy.

Casualty:

Liability or loss resulting from an accident.

Casualty Insurance:

Insurance that covers loss caused by injuries to persons and the legal liability imposed on the insured for injury or for damage to property of others.

Catastrophe:

A severe loss causing sizable financial loss.

Causes of Loss Forms:

The commercial property forms that define the covered causes of loss for which coverage is provided. Commonly, there are 3 Cause of Loss Forms: Basic, Broad and Special.

Certificate of Insurance:

A document providing evidence that insurance has been purchased.

Claim:

A request by a policyholder or a claimant for payment under a policy of insurance.

Claim Expense:

Expenses of settling or investigating a claim.

Claimant:

The person presenting a claim.

Claims Reserve:

An amount of money set aside to meet claims reported but not paid.

Class:

A group of businesses who have common or similar exposures and are grouped together for rating purposes.

Classification:

The arranging or establishing of business groups or categories for rating purposes.

Coinsurance Provision:

An insurance provision for property coverages in which the policyholder must carry an amount of insurance that is at least equal to a set percentage of the value of the property in order to receive full payment of a loss.

Collapse:

Collapse of a building and collapse of personal property within a building due to specified causes (such as weight of snow, ice or rain). Does not include collapse due to design error or due to faulty workmanship or materials if the collapse occurs after construction is complete.

Collision Insurance:

Provides for payment to a covered automobile resulting from the striking of another object by a moving vehicle.

Commercial General Liability Policy (CGL):

A coverage which protects business organizations against liability claims for bodily injury and property damage. Those claims may be the result of events at your place of business, from your business operations, the products or services you make or do, communications or advertisements your business broadcasts.

Commercial Lines:

Refers to insurance for businesses, professionals and commercial establishments.

Commission:

Fee paid to an agent or insurance salesperson as a percentage of the policy premium. The percentage varies widely depending on coverage, the insurer and the marketing methods.

Common Carrier:

A business or agency that is available to the public for transportation of persons, goods or messages. Common carriers include trucking companies, bus lines and airlines.

Competitive State Funds:

State-owned and operated facilities that write Workers' Compensation Insurance solely for that state.

Completed Operations:

A General Liability coverage for the work of the insured that has been completed away from the business premises.

Comprehensive Auto Coverage:

Covers an automobile for loss or damage for all causes except for those specifically excluded.

Comprehensive Insurance:

Auto insurance coverage providing protection in the event of physical damage (other than collision) or theft of the insured car. For example, fire damage or a cracked windshield would be covered under the comprehensive section.

Compulsory Insurance:

Insurance that is required by law.

Concealment:

Failure to disclose facts which may void an insurance policy.

Concurrent Periods:

In hospital income protection, when a patient is confined to a hospital due to more than one injury and/or illness at the same time, benefits are paid as if the total disability resulted from only one cause.

Conditional Receipt:

Given to policy owners when they pay a premium at the time of the application. These receipts bind the insurance company, provided your policy is approved, but are subject to any other conditions stated on the receipt.

Conditions:

Things agreed upon in an insurance policy that state the rights and the requirements of the insured and the insurer.

Consequential Loss:

An indirect loss such as the reduction in value of property that is the result of a direct damage loss.

Constructive Total Loss:

Term used when damage to property is more than the value of the property.

Contestable Clause:

A provision in an insurance policy setting forth the conditions or time period under which the insurance company may contest or void the policy. After this time has lapsed, typically two years, the policy cannot be contested. Example: Suicide.

Contingent Beneficiary:

Person or persons designated to receive the value of an insurance policy in case the original beneficiary is not alive.

Contract:

An agreement between two or more parties with characteristics of mutual assent, competent parties, a valid consideration and legal subject.

Convertible Term:

A policy that may be changed to another form by contractual provision and without evidence of insurability. Most term policies are convertible into permanent insurance.

Copayment:

A predetermined, flat fee an individual pays for health-care services, in addition to what insurance covers. For example, some HMOs require a $10 copayment for each office visit, regardless of the type or level of services provided during the visit. Copayments are not usually specified by percentages.

Countersignature:

The signature of a licensed agent or representative on a policy that is required to validate the policy.

Cost-of-Living Adjustment (COLA):

Automatic adjustment applied to Social Security retirement payments when the consumer price index increases at a rate of at least 3%, the first quarter of one year to the first quarter of the next year.

Coverage:

Coverage is just another term for Insurance. It can be used to mean either the dollar amounts of insurance purchased ($500,000 of liability coverage), or the type of loss covered (coverage for theft).

Coverage Area:

The geographic region covered by travel insurance.

Creditable Coverage:

Term means that benefits provided by other drug plans are at least as good as those provided by the new Medicare Part D program. This may be important to people eligible for Medicare Part D but who do not sign up at their first opportunity because if the other plans provide creditable coverage, plan members can later convert to Medicare Part D without paying higher premiums than those in effect during their open enrollment period.

Cross-Purchase Plan:

An agreement that provides that upon a business owner's death, surviving owners will purchase the deceased's interest, often with funds from life insurance.

Cumulative Injury:

A type of injury which occurs from the repetition of tasks over an extended length of time.