Insurance Policy Terms Definition
Our insurance terms glossary is divided alphabetically by insurance terms in a quick reference guide to assist understanding the language commonly used by insurance companies.
Insurance policy terms definition. In exchange for an initial payment known as the premium the insurer promises to pay for loss caused by perils covered under the policy language. It is a form of risk management primarily used to hedge against the risk of a contingent or uncertain loss. Most buyers have little power to negotiate policy terms. An entity which provides insurance is known as an insurer insurance company insurance carrier or underwriter a person or entity who buys insurance is known as an insured or as a policyholder.
Sometimes a causes of loss form is also required. Generally an insurance policy is assembled with a combination of various standard forms including a declarations page coverage form and endorsements. Policy dividend a refund of part of the premium on a participating life insurance policy. Insurance policies are contracts of adhesion meaning contracts drafted by one party only.
Referred to as the ìdec page î. Deductible the amount of loss paid by the policyholder. Insurance policy definition insurance policy in broad terms the entire printed insurance contract. I the act of providing compensation for a loss with the intent to restore an individual or entity to the approximate financial position prior to the loss.
Policy definitions in defining the scope of coverage insurance policies rely on terms and phrases that have very special and often very specific meanings. The insurer writes the policy and offers it to the buyer. A clause in an insurance policy that indicates that the insurer will only cover the least expensive option for treatment repair or remediation. Insurance is a means of protection from financial loss.
Declaration part of a property or liability insurance policy that states the name and address of policyholder property insured its location and description the policy period premiums and supplemental information. Homeowners insurance is subject to the terms limits and conditions of your policy contract. Since these terms and phrases are usually repeated many times in the insurance policy a single definition of the term or phrase is included in the definitions section of the policy. Policy a written contract ratifying the legality of an insurance agreement.
Policy documents contain a number of insurance terms because they typically define the limitations of risk and liability on the insured and any exclusions of coverage. Pet insurance plans veterinary care plan insurance policy providing care for a pet animal e g dog or cat of the insured owner in the event of its illness or accident. Either a specified dollar amount a percentage of the claim amount or a specified.
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