Insurance Policy Glossary

  • Carrier: An insurance company that underwrites and provides an insurance policy. The carrier assumes the risk and pays claims that have been underwritten.

  • Casualty: Insurance coverage for loss or liability in the event that an unforeseen catastrophe takes place or a legal claim has been filed against the policy owner.

  • Fraud: An act that is committed by the holder of an insurance policy with the intent to collect money from the insurer that is not entitled.

  • Coverage: The types of risk and dollar amounts that have been transferred to an insurance agency. For example, a business may have $1,000,000 of coverage on a general liability policy that covers financial loss from lawsuits brought against the company by customers or employees.

  • Face Amount: The amount to be paid on an insurance policy’s maturity date. In the case of life insurance, the face amount is the sum paid upon the insured’s death.

  • Risk: The situation in which the probability of a disaster (such as flooding) is known to a degree but not how, when, or where it will happen.

  • Exclusion: Any situation, circumstance, or condition that is listed in an insurance policy as not being covered. For example, some insurance policies list flooding or vandalism as risks that are not covered by the policy.

  • Limit: The maximum benefit of an insurance policy that can be paid out over a lifetime.

  • Liability: A claim against the assets or legal obligations of an individual or group of individuals for damages or injuries.

  • Loss: The damage or injury suffered by an insured party due to a peril or accident.

  • Premium: The amount paid by the insured for an insurance policy, either via a lump sum or periodic payments.

  • Rider: An extra clause or form attached to an insurance policy that adds to, removes from, or otherwise changes the provisions in the policy.
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