"The agents were helpful and pleasant when I called asking for help/info."

Customer since 2002

The Hess Agency
2019-08-30T22:55:01-06:00

Customer since 2002

"The agents were helpful and pleasant when I called asking for help/info."
"Let’s just say I have no reason to change for the last 28 years."

Clair L., customer since 1991

The Hess Agency
2019-08-30T23:01:08-06:00

Clair L., customer since 1991

"Let’s just say I have no reason to change for the last 28 years."
"As a realtor, I recommend the Hess Agency to my clients as the coverage is great, rates are low & the staff is very friendly and knowledgeable!"

Nathan S., customer since 2011

The Hess Agency
2019-09-13T07:11:23-06:00

Nathan S., customer since 2011

"As a realtor, I recommend the Hess Agency to my clients as the coverage is great, rates are low & the staff is very friendly and knowledgeable!"
I have been doing business with the Hess Agency for over 30 years and have received exceptional service and quality insurance at the best prices. Business, Home & Auto.

Kenneth S., customer since 2004

The Hess Agency
2019-12-18T14:45:37-06:00

Kenneth S., customer since 2004

I have been doing business with the Hess Agency for over 30 years and have received exceptional service and quality insurance at the best prices. Business, Home & Auto.
"The Hess Agency has been my company since 1983, they're always friendly and courteous when I call, nothing but excellent service from them."

Cheryl K., customer since 1983

The Hess Agency
2019-08-30T22:58:24-06:00

Cheryl K., customer since 1983

"The Hess Agency has been my company since 1983, they're always friendly and courteous when I call, nothing but excellent service from them."
Enjoy working with Lisa True. She is very prompt in answering our questions or concerns via phone or e-mail.

John D., customer since 2014

The Hess Agency
2019-12-18T14:48:27-06:00

John D., customer since 2014

Enjoy working with Lisa True. She is very prompt in answering our questions or concerns via phone or e-mail.
"Super welcoming and friendly!"

Customer since 2018

The Hess Agency
2019-08-30T22:56:28-06:00

Customer since 2018

"Super welcoming and friendly!"
You were so helpful when I had my accident. You covered all my expenses concerning the accident. I was so thankful that I had good coverage and such thoughtful agents to work with. Mentally it was a relief.

Customer since 2008

The Hess Agency
2019-12-18T14:46:53-06:00

Customer since 2008

You were so helpful when I had my accident. You covered all my expenses concerning the accident. I was so thankful that I had good coverage and such thoughtful agents to work with. Mentally it was a relief.
"Steve Faus is very knowledgeable in the Insurance Business, like seeing an old friend, who I totally trust in his advice"

Richard A., customer since 2014

The Hess Agency
2019-08-30T22:56:51-06:00

Richard A., customer since 2014

"Steve Faus is very knowledgeable in the Insurance Business, like seeing an old friend, who I totally trust in his advice"
Jenna Strayer has always been responsive to my questions and needs.

Kenneth H., customer since 2016

The Hess Agency
2019-12-18T14:47:40-06:00

Kenneth H., customer since 2016

Jenna Strayer has always been responsive to my questions and needs.
"Great service, great insurance for all ages from 20 yrs to 60 yrs still great."

Curvin R., customer since 1995

The Hess Agency
2019-08-30T22:58:46-06:00

Curvin R., customer since 1995

"Great service, great insurance for all ages from 20 yrs to 60 yrs still great."
"Hess provides excellent customer service."

Barry F., customer since 2004

The Hess Agency
2019-08-30T22:55:24-06:00

Barry F., customer since 2004

"Hess provides excellent customer service."
"Trevor did a wonderful job of handling our needs with both Auto and Home. He explained everything very well."

Gerald B., customer since 2019

The Hess Agency
2019-08-30T23:08:14-06:00

Gerald B., customer since 2019

"Trevor did a wonderful job of handling our needs with both Auto and Home. He explained everything very well."
"Prompt service when I am doing a building permit app & need a certificate of insurance I usually have it in minutes of the request. Keep it up"

Elmer Z., customer since 2002

The Hess Agency
2019-09-13T07:16:16-06:00

Elmer Z., customer since 2002

"Prompt service when I am doing a building permit app & need a certificate of insurance I usually have it in minutes of the request. Keep it up"
I appreciate the prompt service I get whenever I call the office. An agent always seemed to be available to answer my questions.

Crystal H., customer since 2013

The Hess Agency
2019-12-18T14:44:51-06:00

Crystal H., customer since 2013

I appreciate the prompt service I get whenever I call the office. An agent always seemed to be available to answer my questions.
"I'm happy with the professionalism of your staff and appreciate working with Lisa. Thanks for the caring interest in my insurance needs."

Customer since 2006

The Hess Agency
2019-08-30T22:57:19-06:00

Customer since 2006

"I'm happy with the professionalism of your staff and appreciate working with Lisa. Thanks for the caring interest in my insurance needs."
"You were prompt...and thorough and took care of a title matter quickly."

Customer since 2015

The Hess Agency
2019-08-30T23:04:20-06:00

Customer since 2015

"You were prompt...and thorough and took care of a title matter quickly."
"Used Hess Agency for 20 years. Car, home, atv, cycle, & boat insurance and treated very well, were timely, & always got the insurance I needed!"

Gregory B., customer since 2003

The Hess Agency
2019-08-30T23:11:48-06:00

Gregory B., customer since 2003

"Used Hess Agency for 20 years. Car, home, atv, cycle, & boat insurance and treated very well, were timely, & always got the insurance I needed!"
"Stays on top of things; offering suggestions to improve coverage and protect my assets"

Customer Since 1994

The Hess Agency
2019-08-30T22:54:34-06:00

Customer Since 1994

"Stays on top of things; offering suggestions to improve coverage and protect my assets"
"We have always had quick responses when filing a claim."

George M., customer since 1995

The Hess Agency
2019-08-30T23:02:42-06:00

George M., customer since 1995

"We have always had quick responses when filing a claim."
"Honestly you gave me options for my custom situation that I had trouble finding other places. That was very helpful!"

Luke W., customer since 2018

The Hess Agency
2019-08-30T23:08:40-06:00

Luke W., customer since 2018

"Honestly you gave me options for my custom situation that I had trouble finding other places. That was very helpful!"
Zach Caruso is always helpful and efficient in answering my many questions and tailoring the solutions to my needs.

Hazel G., customer since 2016

The Hess Agency
2019-12-18T14:49:04-06:00

Hazel G., customer since 2016

Zach Caruso is always helpful and efficient in answering my many questions and tailoring the solutions to my needs.
"Professional, knowledgeable, accomodating & friendly staff. Offers different insurance options to choose the best provider, coverage & price."

Patricia T., customer since 2016

The Hess Agency
2019-08-30T23:01:51-06:00

Patricia T., customer since 2016

"Professional, knowledgeable, accomodating & friendly staff. Offers different insurance options to choose the best provider, coverage & price."
"Always handles our questions and claims promptly and thoroughly. Very easy to work with."

Customer since 2000

The Hess Agency
2019-08-30T23:00:15-06:00

Customer since 2000

"Always handles our questions and claims promptly and thoroughly. Very easy to work with."
Working with Sherri Seiders is always a pleasure and she takes care of what I need right away.

Customer since 2004

The Hess Agency
2019-12-18T14:46:11-06:00

Customer since 2004

Working with Sherri Seiders is always a pleasure and she takes care of what I need right away.
"Hess Agency has handled our home & auto policies for 25 years. We started a remodeling business 6 years ago & now they handle our commercial needs. I'm very happy with all they've done for us."

Duane G., customer since 1994

The Hess Agency
2019-10-21T06:27:26-06:00

Duane G., customer since 1994

"Hess Agency has handled our home & auto policies for 25 years. We started a remodeling business 6 years ago & now they handle our commercial needs. I'm very happy with all they've done for us."
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The Hess Agency

Glossary

These definitions are offered as aids to understanding. They do not change the formal definitions found within any insurance policies. The following “Glossary of Insurance Terms” has been provided and arranged alphabetically for your convenience. Simply click on the first letter of the word you are looking for and it will take you to that section.

A | B | C | D | E | F | H | I | J | L | M | N | O | P | R | S | T | U | V | W
A


ACT OF GOD – A flood, an earthquake or other event that is with no human intervention and that could not have been prevented by reasonable care or foresight. The result of natural causes.

ADDITIONAL INSURED – An entity, other than the named insured, on a policy who is protected by the terms of the policy.

AGREED VALUE – An agreement by an insurer to pay a specified amount of money to or on behalf of the insured. See also Valued Policy.

APPLICATION – A form on which the prospective insured states facts requested by the insurance company and on the basis of which, together with any information from other sources, the insurance company decides whether or not to accept the risk, modify the coverage offered, or decline the risk.

APPURTENANT STRUCTURES – A structure pertaining or belonging to the insured structure, such as a tool shed. Appurtenant structures are provided for in the Homeowners policy and other dwelling forms.

ASSUMED LIABILITY – Liability which would not rest upon a person except that he has accepted responsibility by contract expressed or implied. This is also known as contractual liability.

ACTUAL CASH VALUE – The sum of money required to pay for damages or lost property, computed on the basis of replacement value less its depreciation by obsolescence or general wear.

ADDITIONAL LIVING EXPENSE – Coverage providing funds to pay for increased living costs which result from damage covered by the policy.

ALL RISK – Insurance against loss or damage to property arising from any fortuitous cause, except as specifically excluded. See Special Coverage Form.

APPRAISAL – A survey of property made for determining its insurable value or the amount of loss sustained.

ASSIGNED RISK – A risk which underwriters do not care to insure, but because of state law or otherwise, the insured must be protected and the insurance is therefore handled through the state and assigned companies.

AUTOMATIC COVER – A provision in many forms of property-liability insurance to cover increasing values, newly acquired and changing interests, usually for a specified period and limited in amount.

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B


BAILEE – A person or concern having possession of property committed in trust from the owner.

BINDER – In lines other than life and health, a binder is an acknowledgment that insurance applied for is in force whether or not premium settlement has yet been made or the policy issued.

BODILY INJURY LIABILITY – The liability which may arise from injury or death of another person.

BROAD FORM – Property forms which provide coverage on a named perils basis. This form normally adds the Extended Coverage and Vandalism and Malicious Mischief coverages.

BUILDERS RISK INSURANCE – Insurance against loss to buildings or structures in the course of construction.

BASIC COVERAGE FORM – Property forms which provide basic coverages on a named perils basis. These forms generally provide the most limited coverage, which is surpassed by Broad Forms and Special Forms.

BLANKET INSURANCE
1. Property insurance that covers more than one type of property in one location in one policy or form instead of under separate items, or one or more types of property at more than one location.
2. A contract of health insurance that covers all of a class of persons not individually identified.

BOND – An obligation of the insurance company to protect one against financial loss caused by the acts of another.

BROKER – One who represents an insured in the solicitation, negotiation or procurement of contracts of insurance, and who may render services incidental to those functions. By law the broker may also be an agent of the insurer for certain purposes such as delivery of the policy or collection of the premium.

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C


CANCELLATION – Termination of contract of insurance in force by voluntary act of the insurance company or insured, affected in accordance with provisions in the contract or by mutual agreement.

CASUALTY INSURANCE – Insurance that is primarily concerned with losses caused by injuries to persons and legal liability imposed upon the insured for such injury or for damage to property of others. It also includes such diverse forms as Plate Glass, Crime, Boiler and Machinery and Aviation.

CERTIFICATE – A statement evidencing that a policy has been written and stating the coverages in general.

CLAIM – The demand for benefits as provided by the policy.

COINSURANCE
1. In property insurance, a clause under which the insured shares in losses to the extent that he is underinsured at the time of loss.
2. In health insurance, a provision that the insured and insurance company will share covered losses in agreed proportion.

COMPULSORY INSURANCE – Any form of insurance which is required by law.

CONCURRENT INSURANCE – Two or more insurance policies with the same conditions, which cover the same interest in the same property. Also, two bonds, not necessarily identical in their provisions, providing common coverage for the same interests.

CONTRACT OF INSURANCE – A contract whereby an insurance company agrees to indemnify an insured for losses, provide other benefits, or render services to, or on behalf of, an insured. The contract of insurance is often called an “insurance policy”.

CONTRIBUTION
1. The share of a loss payable by an insurer when contracts with two or more insurers cover the same loss.
2. The insurer’s share of a loss under a coinsurance or similar provision.

CARRIER – An insurance company which “carries” the insurance.

CATASTROPHE HAZARD – The risk of loss by reason of simultaneous occurrence of a peril to which all insured in a group (or very large number of insureds) are subject.

CIVIL COMMOTION – An uprising of a large number of people, usually resulting in damage to property. This term is generally used to describe one of the Extended Coverage perils.

CLAUSE – A term used to identify a particular part of a policy or endorsement.

COMPREHENSIVE PERSONAL LIABILITY POLICY (CPL) – A personal liability contract. It provides liability insurance coverage for the individual and family needs arising out of numerous personal activities and situations, such as the ownership of residential property, ownership of pets, sports activities and many other everyday activities.

CONCEALMENT – The withholding of facts by an applicant for insurance that affects an insurance risk or loss.

CONSTRUCTIVE TOTAL LOSS – A partial loss of sufficient degree to make the cost of repairing more than the property is worth.

CONTRACTUAL LIABILITY – Liability assumed under any contract or agreement. Coverage is generally limited in liability policies.

CONVERSION
1. Wrongful use of property by one in lawful possession of it.
2. The change of one policy form to another, usually without evidence of insurability.

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D


DEBRIS REMOVAL CLAUSE – A clause often added to a property insurance policy under which the company assumes liability for the removal of debris resulting from damage to the property covered by the peril insured against.

DEDUCTIBLE – A provision or clause in an insurance policy that the first given number of dollars or percentage of expense will not be reimbursed.

DEPRECIATION – Decrease in the value of property over a period of time due to use, wear, tear and obsolescence.

DECLARATIONS – A term used in insurance for the portion of the contract which contains information such as the name and address of the insured, the property insured, its location and description, the policy period, the amount of insurance coverage, applicable premiums, and supplemental representations by the insured.

DEFAMATION – Any derogatory statement which is designed to injure a person’s business or reputation. Defamation can be accomplished as libel or slander.

DIRECT LOSS (OR DAMAGE) – A loss which is a direct consequence of a particular peril. Fire damage to a refrigerator would be a direct loss. Spoiling of food in the refrigerator as a result of the fire damage would be an indirect loss.

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E


EARNED PREMIUM – That portion of a premium for which the policy protection has already been given.

ELECTRONIC DATA PROCESSING COVERAGE – Specialized type of insurance designed to cover computer equipment, data systems, information storage media and expenses or income loss related to the covered damage of this equipment.

ENDORSEMENT – A form attached to the policy bearing the language necessary to change the terms of the policy to fit special circumstances.

EXPIRATION – The date upon which a policy will cease to cover, unless previously canceled.

EARTH MOVEMENT – A peril including landslide, mudflow, earth sinking, rising or shifting and earthquake. Usually excluded on homeowner and commercial property policies.

EMPLOYERS LIABILITY INSURANCE – Coverage against common law liability of an employer for injuries or sickness to employees, as distinguished from liability imposed by a workers’ compensation law.

EXCLUSIONS – Causes, conditions or property listed in the policy which are not covered and for which no benefits are payable.

EXTENDED COVERAGE – A common extension of property insurance beyond coverage for fire and lightning. Extended coverage adds insurance against loss by the perils of windstorm, hail, explosion, riot and riot attending a strike (civil commotion), aircraft damage, vehicle damage, smoke damage and volcanic eruption.

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F


FAIR PLAN – Fair Access to Insurance Requirements. A pooling plan reinsured by the United States government that makes insurance available to those in high risk areas who cannot obtain insurance through normal channels. Coverage for fires and allied perils is available, after inspection of the premises.

FLAT CANCELLATION – Cancellation of a policy free of any charge or penalty to the insured, as contrasted to short rate or pro-rata cancellation.

FLOOD INSURANCE – A form of insurance designed to reimburse property owners from loss due to the defined peril of flood. Usually sold in connection with a government Flood Insurance plan.

FIRE INSURANCE – Insurance contracts that indemnify an insured for loss caused by the destruction of the insured’s property for a variety of perils, including fire.

FLOATER POLICY – A policy under the terms of which protection follows moveable property, covering it wherever it may be.

FORTUITOUS EVENT – An unforeseen accident.

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H


HAZARD – A specific situation that increases the probability of the occurrence of loss arising from a peril, or that may influence the extent of the loss. For example, accident, sickness, fire, flood, liability, burglary, and explosion are perils. Slippery floors, unsanitary conditions, shingled roofs, congested traffic, unguarded premises, and uninspected boilers are hazards.

HOMEOWNERS POLICY – A Property and Liability Insurance contract that provides insurance against any of the Property and Liability perils to which a homeowner or renter is exposed.

HOLD HARMLESS AGREEMENT – A contractual arrangement whereby one party assumes the liability inherent in a situation, thereby relieving the other party of responsibility. For example, a typical lease may provide that the lessee must “hold harmless” the lessor for any liability from accidents arising out of the premises.
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I


IMPROVEMENTS AND BETTERMENTS – Additions or changes made by a lessee at his own cost to a building which he is occupying which enhance its value. These become part of the building and require special insurance consideration.

INDIRECT LOSS (OR DAMAGE) – Loss resulting from a peril, but not caused directly and immediately thereby. For example: Loss of property due to fire is a direct loss, while the loss of rental income as the result of the fire would be an indirect loss.

IN-FORCE – Insurance on which the premiums are being paid or have been fully paid. In life insurance, usually refers to insurance by face amount. In health, usually refers to premium volume being paid to insurance company.

INSPECTION – Checking on facts about an applicant or claimant.

INSURABLE RISK – A risk which meets most of the following requisites:
– The loss insured against must be capable of being defined.
– It must be accidental.
– It must be large enough to cause a hardship to the insured.
– It must belong to a homogeneous group of risks large enough to make losses predictable.
– It must not be subject to the same loss at the same time as a large number of other risks.
– The insurance company must be able to determine a reasonable cost for the insurance.
– The insurance company must be able to calculate the chance of loss.

INSURANCE COMPANY
Every person or company engaged in the business of making contracts of insurance.
The party to an insurance arrangement who undertakes to indemnify for losses, provide other pecuniary benefits, or render service.

INSURANCE SERVICES OFFICE (ISO) – An organization of the Property and Liability Insurance business designed to gather statistics, promulgate rates, and develop policy forms.

INSURED – The party to an insurance arrangement to whom, or on behalf of whom, the insurance company agrees to indemnify for losses, provide benefits, or render service. In pre-paid hospital service plans, the insured is called the subscriber.

INSURING AGREEMENT (OR CLAUSE) – That portion of an insurance contract which states the perils insured against, the persons and/or property covered, their locations, and the period of the contract.

INDEMNIFY – To restore the victim of a loss, in whole or in part, by payment, repair or replacement.

INFLATION GUARD ENDORSEMENT – An endorsement which provides for periodic increases in the amount of insurance in effect on buildings so as to keep it “to value” considering the effect of inflation on building replacement costs. The term “Inflation Guard” is used in connection with Homeowners policies. In Commercial policies the similar endorsement is called the “Automatic Increase in Insurance Endorsement.”

INLAND MARINE INSURANCE – A branch of insurance that developed from the insuring of shipments which did not involve ocean voyages. Exposures eligible for this form of protection are described in the nationwide definition of Marine Insurance. Such diverse properties as bridges tunnels, jewelry and furs can be written under Inland Marine forms.

INSURABLE INTEREST – Any interest in a subject of insurance or any legal relation to it of such a nature that a certain happening might cause monetary loss to the insured.

INSURANCE – A formal social device for reducing risk by transferring the risks of several individual entities to an insurer. The insurer agrees, for a consideration, to assume, to a specified extent, the losses suffered by the insured.

INSURANCE POLICY – Broadly, the entire written contract of insurance. More narrowly, the basic written or printed document, as distinguished from the forms and endorsements added thereto.

INSURANCE TO VALUE – Insurance written in an amount approximating the replacement value of the property insured.

INSURER – (See Insurance Company.)

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J


JOINT TENANCY – Ownership of property shared equally by two or more parties under which the survivor assumes complete ownership. This is different from a tenancy in common where the heirs of a deceased party to the tenancy inherit his or her share.
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L


LAPSE – Termination of a policy because of failure to pay the premium.

LESSOR – The person granting a lease.

LIABILITY INSURANCE – Insurance that pays and renders service on behalf of an insured for loss arising out of his responsibility, due to negligence, to others imposed by law or assumed by contract.

LIMIT OF LIABILITY – The maximum amount which an insurance company agrees to pay in case of loss.

LOSS OF USE INSURANCE – Coverage to compensate an insured for the loss of use of his property if it cannot be used because of a peril covered by the policy.

LESSEE – The person to whom a lease is granted.

LIABILITY – Any legally enforceable obligation.

LIABILITY LIMITS – The sum or sums beyond which a liability insurance company does not protect the insured on a particular policy.

LOSS – Generally refers to
1. the amount of reduction in the value of an insured’s property caused by an insured peril
2. the amount sought through an insured’s claim, or
3. the amount paid on behalf of an insured under an insurance contract.

LOSS PAYABLE CLAUSE – A provision in Property Insurance contracts that authorize payment to persons other than the insured to the extent that they have an insurable interest in the property. This clause may be used when there is a lien or loan on the property being insured, and it protects the lender.

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M


MALICIOUS MISCHIEF – Similar to vandalism. Purposely damaging the property of another.

MISREPRESENTATION – The use of written or oral statements of the insured or insurance company misrepresenting the risk, terms, coverages, benefits, privileges or estimated future dividends of any policy.

MORAL HAZARD – A condition of morals or habits that increase the probability of a loss from a peril.

MORTGAGE INSURANCE POLICY – In life and health insurance, a policy intended to be used to pay off the balance due on a mortgage or meet the payments on a mortgage as they fall due on or after the death or disability of the insured.

MORTGAGOR – The debtor who receives money and in turn grants a mortgage on his property as security for a loan.

MARKET VALUE – The price for which something would sell based on current market conditions.

MONOLINE POLICY – Any insurance coverage written as a single line policy.

MORTGAGE (OR MORTGAGEE) CLAUSE – A provision attached to a property insurance policy covering mortgaged property stating that the loss shall be payable to the mortgagee as his interest may appear and that the mortgagee’s right of recovery shall not be defeated by any act or neglect of the insured and giving the mortgagee other rights and privileges.

MORTGAGEE – The creditor to whom a mortgage is given and who lends money on the security of the value of the property mortgaged.

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N


NAMED INSURED – Any person, firm or corporation, or any member thereof, specifically designated by name as insured(s) in a policy as distinguished from the others who, though unnamed, are protected under some circumstances. A common application of this latter principle is in liability policies wherein by a definition of “insured” protection is extended to interests (not designated by name) according to their status or in particular situations or circumstances.

NEGLIGENCE – Failure to use the degree of care which an ordinary person of reasonable prudence would use under the given circumstances. Negligence may be constituted by acts of either omission or commission or both.

NON-ASSIGNABLE – A policy that the owner cannot assign to a third party. Most policies are non-assignable unless approval is given by the insurer.

NAMED PERIL POLICIES – Names peril policies specify what perils are insured against, contrary to so-called all risk policies.

NONRENEWAL – Termination of insurance coverage at an expiration date or anniversary date. This action may be taken by an insurer who refuses to renew, or by an insured who rejects a renewal offer.

O


OCCUPANCY – In insurance, this term refers to the type and character of the use of property in question.

OFF PREMISES – A clause in property insurance extending coverage away from the premises described in the policy. The amount of coverage away from the premises is usually restricted to a percentage of the total coverage on the premises.

OCCURRENCE – An event that results in an insured loss. In some lines of insurance, such as Liability, it is distinguished from accident in that the loss does not have to be sudden and fortuitous and can result from continuous or repeated exposure which results in bodily injury or property damage neither expected nor intended by the insured.
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P


PACKAGE POLICY – Any insurance policy including two or more lines or types of coverage in the same contract.

PERIL – Cause of a possible loss.

PERSONAL EFFECTS FLOATER – An Inland Marine policy covering personal effects worldwide usually carried by a tourist.

PERSONAL INJURY COVERAGE – Liability insurance coverage for third party claims for damages which are other than physical such as, libel, slander, false arrest, wrongful eviction, invasion of privacy, etc.

PERSONAL PROPERTY – Any property of an insured other than real property. Homeowner policies protect the personal property of family members, and commercial forms are used to protect many types of business personal property.

PERSONAL PROPERTY OF OTHERS – Property, other than real property, which is not owned by an insured. Liability forms have traditionally excluded coverage for property of others in an insured’s care, custody or control. Homeowner forms and commercial property forms provide some coverage for property of others.

PILFERAGE – Petty theft, especially theft of articles in less than package lots. POLICY – The written contract effecting insurance, or the certificate thereof, including all clause, riders, endorsements, and papers attached and made a part thereof.

PREFERRED RISK – An insurance classification indicating a risk that is superior to the average risk on which the rate has been calculated and thus eligible for a reduced rate.

PREMIUM
1. Part of the consideration for the insurance.
2. The periodic payment made to keep a policy in force.
3. In annuities, the purchase payment.

PROFESSIONAL LIABILITY INSURANCE – Liability insurance to indemnify professionals, eg. doctors, lawyers, architects, etc. for loss or expense resulting from claims of malpractice, error, or mistake committed or alleged to have been committed by the insured in his professional capacity.

PROOF OF LOSS – A formal statement made by the insured to the insurance company regarding a loss. The purpose of the proof of loss is to provide the company sufficient information concerning the loss to enable it to determine its liability under the policy or bond.

PROPERTY INSURANCE – Insurance which indemnifies a person with an interest in physical property for its loss or the loss if its income-producing ability.

PROTECTION
1. Term used interchangeably with the word “coverage” to denote the insurance provided under the terms of a policy.
2. Term used to indicate the existence of fire-fighting facilities in an area known as a “protected” area.

PARTIAL LOSS – A loss under an insurance policy which does not either
1. completely destroy or render worthless the insured property, or
2. exhaust the insurance applying thereto.

PERSONAL ARTICLES FLOATER – Provides all risk coverage for valuable items such as furs, jewelry, cameras, silverware, etc. formerly insured under separate contracts. The items are generally listed by description and value.

PERSONAL INJURY – Injury, other than bodily injury, arising out of false arrest or detention, malicious prosecution, wrongful entry or eviction, libel or slander, or violation of a person’s right to privacy.

PERSONAL LINES – Refers to insurance for individuals and families, such as private passenger automobile insurance and homeowner insurance.

PERSONAL PROPERTY FLOATER – A policy covering all personal property world-wide, including insured’s residence.

PHYSICAL HAZARD – The material, structural or operational features of the risk itself, apart from the morale or moral hazards of the persons owning or managing it.

POLICY PERIOD (OR TERM) – The period of time during which the policy contract affords protection.

PREMISES – The particular location of property or a portion thereof as designated in a policy.

PREMIUM NOTICE – A notice from the insurance company to the policyowner that a premium is, or will be, due on a given date.

PROHIBITED RISK – Any class of business which an insurance company will not insure under any condition.

PROPERTY DAMAGE LIABILITY INSURANCE – Protection against liability for damage to the property of another not in the care, custody and control of the insured, as distinguished from liability for bodily injury. In the majority of cases, property damage insurance is written in connection with the bodily injury protection, the premiums and limits of insurance being distinct.

PROTECTED – A subject of insurance located in an area protected by a fire department.

PROXIMATE CAUSE – The effective cause of loss or damage. An unbroken chain of cause and effect between the occurrence of an insured peril or a negligent act and resulting injury or damage to property.

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R


RATE – The per unit cost of insurance.

RATING BUREAU – An organization that classifies and promulgates and, in some cases complies data, and measures hazards of individual risks in terms of rates in a given territory.

REIMBURSEMENT – Payment of an amount of money related to the amount of the loss to or on behalf of the insured upon the occurrence of a defined loss.

REINSURANCE
1. A contract of indemnity against liability by which the insurance company procures other insurance to insure it against loss or liability by reason of the original insurance.
2. Insurance by one insurance company of all or part of a risk accepted by it with another insurance company which agrees to reimburse the insurance company for the portion of the claim reinsured.

RELEASE
1. To give up, abandon, and discharge a claim or an enforceable right of one against another.
2. Name of the instrument or form evidencing such an act.

RENTAL VALUE INSURANCE – Insurance that provides indemnity for loss of the rental value of property when the owner or the tenant (if he remains liable for the payment of rent) is deprived of the use of the property because of its damage by a peril insured against.

REPRESENTATIONS – On an application, facts that the applicant represents as true and accurate to the best of his or her knowledge and belief. In contrast to warranty (see Warranty).

RETURN PREMIUM – The amount due the insured if a policy is cancelled, reduced in amount or reduced in rate.

RISK MANAGEMENT – Management of the pure risks to which a company might be subject. It involves analyzing all exposures to the possibility of loss and determining how to handle these exposures through such practices as avoiding the risk, retaining the risk, reducing the risk, or transferring the risk by insurance.

RATED – Usually used in combination, rated-up or rated policy. A policy issued with an extra premium charge because of physical or moral impairment.

REDUCTION OF RISK – Taking steps to reduce the probability or severity of a possible loss. For example, installing alarms and sprinkler systems to reduce the risk of fire loss. One of the four major risk management techniques. See Risk Management.

REINSTATEMENT
1. Putting a lapsed policy back in force.
2. The payment of a claim under some forms of insurance reduces the principal amount of the policy by the amount of the claim. Provision is usually made for a method of reinstating the policy to its original amount. This may be done automatically either with or without premium consideration or at the request of the insured.

REJECTION
1. Refusal by an insurer to underwrite a risk.
2. Sometimes used to refer to the refusal or denial of a claim by an insurer.

RENEWAL – The continuation in full force and effect of something that is about to expire. With an insurance policy it is made either by the issuance of a new policy or renewal receipt or certificate, to take effect upon the expiration of the old policy.

REPLACEMENT COST – The cost of replacing property without deduction for depreciation.

RESERVE
1. An amount representing actual or potential liabilities kept by an insurer to cover debts to policyholders.
2. An amount allocated for a special purpose.

RISK
1. A chance of loss.
2. A person or thing insured.

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S


SALVAGE – Property taken over by an insurance company to reduce its loss.

SELF-INSURANCE – Making financial preparations to meet pure risks by appropriating sufficient funds in advance to meet estimated losses, including enough to cover possible losses in excess of those estimated.

SHORT RATE – The earned premium, including penalty, for insurance or bonds canceled by the insured before the end of the policy period or term of bond.

SMOKE DAMAGE – Damage caused by the smoke from a fire in contrast to damage caused by the actual combustion.

SPECIFIC RATE – A rate applying to an individual property.

SUBROGATION – The legal process by which an insurance company seeks, from a third party who may have caused the loss, recovery of the amount paid to the insured.

SCHEDULE – The list of individual items covered under one policy as the various buildings, animals and other property in property insurance.

SETTLEMENT – A policy benefit or claim payment. It connotes an agreement between both parties to the policy contract as to the amount and method of payment.

SHORT-TERM POLICY – A policy written for a period of less time than is normal for that type of policy.

SPECIAL COVERAGE FORM – Any of the commercial or personal lines property forms which provide coverage on an all-risk type basis. These forms provide the broadest coverage and do not list covered perils, but do include a list of exclusions.

STATED AMOUNT – Relating to an agreement by the insurance company to pay a specified amount of money to or on behalf of the insured upon the occurrence of a defined loss. See Reimbursement benefit.

SUPPLEMENTARY PAYMENTS – A provision in most liability policies under which the insurer agrees to pay defense costs, premiums on various bonds, interest accruing after a judgment, and other reasonable expenses in addition to the limit of liability.

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T


TENANTS POLICY – A Homeowners form which is specifically designed for people who rent.

TIME ELEMENT INSURANCE – A general term referring to those coverages that protect against indirect losses resulting from damage to described property, where the amount of such losses depends on the length of time over which such losses accumulate. Examples include Rent insurance, Leasehold insurance, Business Interruption insurance, and Extra Expense insurance.

TOTAL LOSS – A loss of sufficient size so that it can be said there is nothing left of value. The complete destruction of the property. The term is also used to mean a loss requiring the maximum amount a policy will pay.

THIRD PARTY INSURANCE – Protection of the insured against liability for damage to or destruction of the bodies or property of others.

TIME LIMITS – The limits of time within which notice of claim and proof of loss must be submitted.

TRIP TRANSIT POLICY – An insurance policy for loss to personal property on a single trip between two specified locations.

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U


UMBRELLA LIABILITY POLICY – A liability policy designed to provide liability protection above and beyond that provided by standard liability contracts.

UNDER-INSURANCE – A condition in which not enough insurance is carried to cover the insurable value and, especially, to satisfy a coinsurance clause in property insurance.

UNEARNED PREMIUM – That portion of an advance premium that has not yet been used for coverage written. In the case of an annual premium, at the end of the first month of the premium period, 11 months of the premium would still be “unearned”.

UMPIRE – For Property coverage, if a company and a claimant fail to agree on the amount of loss, each may appoint an appraiser, and these in turn select an umpire. A decision by any two of the three is binding.

UNDERWRITING – The process of evaluating a risk for the purpose of issuing insurance coverage on it.

UNOCCUPIED – Refers to property which may be furnished or have furnishings in it but is not occupied or being lived in. The Standard Fire policy prohibits unoccupancy beyond a specified period of time. This term is contrasted with vacant, which means that there is nothing within the building.

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V


VANDALISM – Used with Malicious Mischief. Willful physical damage to property.

VACANT – A term used in Property Insurance to describe a building that has nothing in it. This goes one step beyond the description of unoccupied. The Standard Fire policy prohibits vacancy beyond a specified period of time.

VOID – A term used to describe a policy contract that is completely free of all legal effect.

VANDALISM AND MALICIOUS MISCHIEF (V&MM) – Damage or destruction to property which is willful. This coverage can be purchased under many property forms and is automatically covered under most Homeowners policies.

VALUED POLICY – A policy which states that in the event of a total loss, a specified amount will be paid, that being the amount stated in the policy. The effect is to eliminate the need for determining the actual cash value of an it.

VOIDABLE – A policy contract that can be made void at the option of one or more of the parties to it. An example would be a Property Insurance policy which is voidable by the insurer if the insured commits certain acts.

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W


WAIVER
1. The giving up or surrender of a right or privilege that is known to exist.
2. A rider excluding liability for a stated cause of accident or sickness.
3. A provision agreeing to forego premium payment during a period of disability.

WORKERS COMPENSATION
1. A schedule of benefits payable to an employee for injury, disability, dismemberment, disease or death as a result of occupational hazard. The payments are a liability of the employer.
2. Insurance agreeing to pay the Worker’s Compensation benefits required by law on behalf of the employer.

WARRANTY – A statement made on an application for insurance that is warranted to be true in all respects. If untrue in any respect, even though the untruth may not have been known to the person giving the warranty, the contract may be voided whether or not the untruth or inexactness is material to the risk. Statements on life and health insurance applications are, in the absence of fraud, not warranties but representations. (See Representations).

WRITTEN
1. Insurance for which the application has been taken and the policy has been issued.
2. The entire amount of insurance premium on contracts issued by the insurance company.

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