Insurance

It is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.

It is an arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium.

Insurer/Carriers

a person or company that underwrites an insurance risk; the party in an insurance contract undertaking to pay compensation.

Insured

a person, property or organization covered by insurance.

Insurance Policy

Is the contract between the insurer and the insured (policyholder), which determines the claims the insurer is legally required to pay.

A contract detailing an insurance policy and outlining what risks are insured, what premiums are to be paid by the policyholder, what deductibles prevail, and all details associated with a policy

Policyholder

Entity that owns an insurance policy and has the right to exercise all privileges under the contract of insurance, except where restricted by the rights of an assignee (see assignment). A policyholder may or may not be the insured, or the sole or one of the beneficiaries of the policy also called policy owner.

Premiums

An insurance premium is the amount of money that an individual or business must pay for an insurance policy. The insurance premium is income for the insurance company, once it is earned, and also represents a liability in that the insurer must provide coverage for claims being made against the policy.

Insurance Claim

An insurance claim is a formal request to an insurance company for coverage or compensation for a covered loss or policy event. The insurance company validates the claim and, once approved, issues payment to the insured or an approved interested party on behalf of the insured.

Insurance Broker

Is an individual/specialist in insurance and risk management. Brokers act on behalf of their clients and

provide advice in the interests of their clients. Sometimes an insurance broker will act as agent of an insurer.

Insurance Brokerage

The business of giving people independent advice about what insurance is available from different companies and of arranging insurance for them, or a company that provides this service.

Lead – This is someone that we are talking to and trying to help by determining their needs and presenting proposal quote. This is pre-sales and we have not sold them anything.

Carriers - Companies we are contracted to write business with.

Lead - (Pre-Sales) Client (Sold Policy)

Client – This is someone who purchased a policy with us already. They are the active policyholders.

Quote – This is the preliminary coverages and amount of money that each carrier offers. This is prior to the policy being issued.

Upload/Issue – These are terms meaning to transition the client from a lead to a client.

Policy – This is post sale. Once money is taken and the policy is “uploaded/issued” then the quote is officially a policy. The term policy indicates that money had exchanged hands and contract has been signed.

Binder – The document that is sent when a policy is uploaded. This is the initial document verifying that coverage is in place. We normally send a Binder to another professional that requires it for their file. (Example: Mortgage Broker/Lender requires a binder to let them know that the home insurance has been uploaded and meets their underwriting requirements).

Underwriting – This is a group of detailed oriented people who look after the policies to make sure that the rules that the carrier’s put in place are followed.

Carriers – The companies that our agency is contracted to place business with and we they pay out for any claims and process all payments. We are just the sales/service entity and they are the financial entity that takes care of the clients.

Lienholder – Normally a client will have a loan on a home or a vehicle. The bank that loans the money is called the lienholder. They have to be noted on the insurance policy so that if something happens to the home or vehicle that has the loan that they will be paid by the insurance company before the client is. This makes sure they get their money back from their loan.

HOI Request – This is the “Home Owners Insurance” request is sent to us from a loan officer and has all the necessary information to upload/issue the policy so that we can then issue the binder to the lienholder with all the necessary information to make sure that the loan clears underwriting and the client can purchase the new home.

EOI – This is the “Evidence of Insurance” it is what we call the binder that we send to a loan officer when someone is purchasing a home. This EOI typically has the payment information on it so that the lienholder on the home can pay the financials or premium.

Lender – The lender is also called a loan officer when a home is purchased. This is the person who works for the company that the client is financing the home through. The lender will put all the paperwork together, make sure everything is done accurately and work with underwriting to make sure the company will release the money to purchase the home.

Policy Period – The period of coverage that the insurance carrier will offer coverage for if the policy is paid. This is normally a full calendar year.

Effective Date – The date that the policy begins/commence.

Expiration Date – Sometimes known as the renewal date or expiration date, the policy expires and will need to be renewed or continued to offer coverage. Commonly, the insurance carrier will offer a renewal premium that can change. The renewal or expiration date is when that premium is offered and if accepted, then the policy will continue.

Policy Number – This is a specific number to identify the policy by when we call the carrier and need to service the policy.

Mortgage Clause – Is how the lender needs to be represented on the Insurance Binder or EOI to meet their legal needs.

Self-Pay – The insured/client pays their bill for the insurance out of their own bank account.

Mortgagee Pay – The lender/mortgagee pays the insurance bill every year and the client pays the mortgagee back through monthly payments.

Deductible – The base money that must be paid by the client/insured before coverage begins

DEFINITION OF TERMS - HOME INSURANCE

Dwelling Value

This is the value of the property/home.

Replacement Cost

The value/cost the of the house the insurance will pay is the said property is completely damaged and needs to be completely reconstruct from its original status.

Guaranteed Replacement Cost

An insurance policy that pays for the entire cost of replacing or repairing property, even if it is beyond the policy limit. It does not account for depreciation, whereas a cash-value policy would.

Actual Cash Value

This is the value of the property less the depreciated amount of the said property or house.

Personal Property

This is the items that can be move and is not part of the fixed house (e.g. appliances, furniture and jewelries, etc.)

Loss of Use

This is the value that needs to be provided to the insured to cover all expenses they may incur due to relocation for their property has been damaged until it has been rebuilt.

Liability

Liability covers other people if they have damage due to the fault of our insured.

Other Structures

The other items on the property are paid out under the other structures.

DEFINITION OF TERMS - AUTO INSURANCE

VIN

Vehicle Identification Number. This is a unique number issued to each vehicle for tracking purposes.

Liability

This is what we call the section of coverage that only covers the other people/vehicle in which the insured might hit. It consists of three sets of numbers. Bodily Injury per person/Bodily injury per incident/Property Damage so, it would look like 50/100/50. All Amounts are in thousands of dollars.

Bodily Injury

This is the limits for bodily injury for the other people in the car that the insured hits. This is the first two sections of the liability section of the coverage on an auto policy. In the example above of liability where we are saying 50/100/50, the bodily injury limits are 50,000 bodily injury per person/100,000 bodily injury per incident/(third section is the next section of Property Damage)

Property Damage

This is the amount that the policy will pay for the property on the policy or the property of the other person that the insured hits. In the example above, the 50,000 bodily injury per person/100,000 bodily injury for all persons in the accident/50,000 property damage.

Personal Injury Protection

This is medical for the people in the insured’s vehicle if they are in an accident. It covers all people in the accident as well as loss of wages at their job if they can’t work because of the accidents.

Comprehensive Deductible

This is the maximum out of pocket for the insured to fix/ replace a vehicle if there is damage to a vehicle for anything other than a collision.

Collision Deductible

This is the maximum out of pocket for the insured to fix/replace a vehicle in the event of a collision with another car or with another object.

Rental

This is the amount per day that the insurance company will pay if the insured’s car is being fixed and they need a rental car.

Towing

This is the maximum per day that the insurance company will pay if the insured’s vehicle has to be towed to a shop due to an accident.