Insurance Glossary

Premium: The amount of money paid by the insured to the insurance company for coverage.

Policy: A written contract between the insurer and the insured that outlines the terms and conditions of the insurance coverage.

Insured: The person or entity that is protected by the insurance policy.

Insurer: The company or organization that provides insurance coverage.

Deductible: The amount of money that the insured must pay out-of-pocket before the insurance coverage kicks in.

Coverage: The scope and extent of protection provided by the insurance policy.

Claim: A formal request made by the insured to the insurance company to receive compensation for a covered loss or event.

Underwriting: The process of evaluating an applicant’s risk profile to determine insurability and premium pricing.

Liability: Legal responsibility or obligation for an action or event that causes harm or damage.

Co-pay: A fixed amount paid by the insured for covered services, usually in healthcare insurance.

Exclusion: Specific events or perils that are not covered by the insurance policy.

Indemnity: The principle that an insurance policy should compensate the insured for the actual financial loss suffered, up to the policy limits.

Peril: The specific cause of damage or loss that triggers insurance coverage.

Actuary: A professional who analyzes risk and calculates insurance premiums and reserves.

Floater: An insurance policy that covers movable property, such as jewelry or art, against loss or damage wherever it is located.

Policyholder: The person who owns the insurance policy and is responsible for paying premiums.

Endorsement: A written amendment or addition to an insurance policy that modifies the coverage or terms.

Actual Cash Value (ACV): The current market value of an insured item, taking into account depreciation.

Replacement Cost: The amount it would cost to replace or repair an insured item without deducting depreciation.

Subrogation: The process by which an insurance company may seek reimbursement from responsible third parties for a claim it has paid.

Note: This is not an exhaustive list, but it covers some of the most common insurance terms encountered by individuals and businesses.