Insurance Industry Terms & Jargon Defined

We understand that navigating the complex world of insurance can be overwhelming, especially when faced with industry-specific terms and jargon. That’s why we’ve created this page to provide policyholders with a clear and concise overview of all the essential terminology. Unravel the intricacies of claim processes, settlement negotiations, and policy coverage with ease, as we strive to make your insurance journey smoother and more informed.

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  • Accidental Discharge

    (also known as Overflow of Water) This named peril covers water damages resulting from unintentional spillage, leakage, or overflow of water from systems like plumbing, heating, or household appliances.

  • Act of God

    Natural occurrence without human involvement that could not have been prevented (i.e. lightning, tornado, hail, hurricane, etc.)

  • Actual Cash Value (ACV)

    A method of valuing insured property by considering the replacement cost minus depreciation. It gives an up-to-date value of an item based on its current market value, and is calculated by deducting physical depreciation from item's replacement cost.

  • Actual Funds Received (AFR)

    The funds received after taking the cost of replacing the insured’s property with new, similar materials and deducting the depreciation and the insured’s policy deductible.

  • Actuarial Report

    An actuarial report is a comprehensive analysis prepared by actuaries, detailing the financial conditions of an insurance carrier's reserves, future obligations, and other financial aspects. This report aids the insurance carrier in making informed decisions about pricing, underwriting, and maintaining adequate reserves.

  • Actuary

    An actuary is a professional skilled in evaluating and managing financial risks, especially concerning insurance and pension programs. They use mathematics, statistics, and financial theory to study uncertain future events, helping insurance carriers establish appropriate premium rates and ensure financial stability.

  • Additional Coverages

    The section of a property policy providing coverage for Debris Removal, Removal/Preservation of Property, and Fire Department Service Charges.

  • Adjuster

    A person who investigates claims and recommends settlement options based on estimates of damage and insurance policies held. There are several types of adjusters, but all of them are involved in some way in handling the insurance claim negotiation. A carrier’s adjuster works for the insurance carrier and is typically a main point of contact for Premier Claims with the insurance carrier. Our adjusters are team members who advocate on behalf of our clients (the policyholder) to make sure claim payments are fair and all damaged items are covered.

  • Adjuster’s Report

    The estimate of damages created by the insurance company.

  • Advance Premiums

    Advance premiums refer to the premiums collected by an insurance carrier before the policy period begins. These are essentially payments made in advance by policyholders for future coverage.

  • Advisory Organization

    An advisory organization provides services like rate-making, policy form preparation, and data collection to insurance carriers. These entities aid carriers in maintaining compliance and staying informed about industry trends.

  • All-Risk Policy

    A type of insurance coverage that covers all risks except those specifically excluded in the policy. It provides broad protection against unforeseen perils. An All Risk Policy can also be called comprehensive, open perils, extending coverage or special policy, and is the opposite of a named peril policy.

  • Appraisal

    Process built within insurance policies as a form of mediation for dispute resolution. Appraisal is intended to obtain two unbiased parties to come to an agreement on the funds due from the insurance company. The insurance company will name one unbiased appraiser and the insured will name an unbiased one to meet and come to an agreement. If the two appraisers cannot come to an agreement, a third party is named to be an umpire.

  • Arson

    Arson refers to the deliberate act of setting property on fire with malicious intent. In the context of insurance, it's a fraudulent act where a policyholder intentionally causes damage to claim compensation from their insurance carrier.

  • Asset

    An asset refers to any valuable item, property, or financial resource owned by the individual or entity. These can range from tangible items like homes, cars, and personal belongings, to intangible ones such as stocks, bonds, or other financial investments. For insurance purposes, understanding your assets is crucial, as they may need sufficient coverage to protect these assets against potential liabilities or damages.

  • Assignment of Benefit (AOB)

    The transfer of the insurance claim financial benefit from the insured to contractor to receive the full claim amount.

  • Assignment of Claim (AOC)

    The transfer of the insurance claim benefit of rights from prior owner of damaged property to new owner.

  • Assumed Reinsurance

    Assumed reinsurance is when an insurance carrier accepts the risks transferred from another insurance carrier. Essentially, the assuming company takes on specific liabilities and provides reinsurance coverage for them.

  • Authorized Reinsurance

    Authorized reinsurance involves transactions with a reinsurance company that is licensed or authorized in the state where the original insurance was written. It ensures that the reinsurance agreement meets regulatory standards and is legally sound.

  • Bad Faith

    When an insurance carrier unreasonably denies a claim or delays payment. It refers to dishonest actions or a breach of contract by the insurance carrier.

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We understand that insurance policies and claims can be complex, and you might have questions or concerns about the language in your policy or issues related to your claim. Our experienced team of licensed public adjusters and legal experts are just a call or message away. Whether you need clarification on specific policy terms, advice on handling a claim, or assistance with any insurance-related matter, we are here to help. We take pride in empowering policyholders with the knowledge they need to make informed decisions and ensure a smooth claims process. Reach out to us today!


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