We hope that our extensive glossary of common (and some not-so-common)
insurance terms and phrases proves helpful to you! Simply start
below by choosing the first letter of the word or phrase you want to
learn more about.
A - B - C - D - E - F - G - H - I - J - K - L - M
N - O - P - Q - R - S - T - U - V - W
IDENTITY THEFT INSURANCE - - Coverage for expenses
incurred as the result of an identity theft. Can include costs
for notarizing fraud affidavits and certified mail, lost income
from time taken off from work to meet with law-enforcement personnel
or credit agencies, fees for reapplying for loans and attorney's
fees to defend against lawsuits and remove criminal or civil judgments.
IMMEDIATE ANNUITY - A product purchased with a lump sum,
usually at the time retirement begins or afterwards. Payments begin within about
a year. Immediate annuities can be either fixed or variable.
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INCURRED BUT NOT REPORTED LOSSES / IBNR - Losses
that are not filed with the insurer or reinsurer until years after the policy
is sold. Some liability claims may be filed long after the event that caused
the injury to occur. Asbestos-related diseases, for example, do not show up
until decades after the exposure. IBNR also refers to estimates made about
claims already reported but where the full extent of the injury is not yet
known, such as a workers compensation claim where the degree to which work-related
injuries prevents a worker from earning what he or she earned before the injury
unfolds over time. Insurance companies regularly adjust reserves for such losses
as new information becomes available.
INCURRED LOSSES - Losses occurring within a fixed
period, whether or not adjusted or paid during the same period.
INDEMNIFY - Provide financial compensation for
losses.
INDEPENDENT AGENT - Agent who is self-employed,
is paid on commission, and represents several insurance companies. (See Captive
agent)
INDIVIDUAL RETIREMENT ACCOUNT/IRA - A tax-deductible
savings plan for those who are self-employed, or those whose earnings are below
a certain level or whose employers do not offer retirement plans. Others may
make limited contributions on a tax-deferred basis. The Roth IRA, a special
kind of retirement account created in 1997, may offer greater tax benefits
to certain individuals.
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INFLATION GUARD CLAUSE - A provision added
to a homeowners insurance policy that automatically adjusts the coverage
limit on the dwelling each time the policy is renewed to reflect current
construction costs.
INLAND MARINE INSURANCE - This broad type
of coverage was developed for shipments that do not involve ocean transport.
Covers articles in transit by all forms of land and air transportation
as well as bridges, tunnels and other means of transportation and communication.
Floaters that cover expensive personal items such as fine art and jewelry
are included in this category. (See Floater)
INSOLVENCY - Insurer’s inability to pay debts. Insurance
insolvency standards and the regulatory actions taken vary from state to state.
When regulators deem an insurance company is in danger of becoming insolvent,
they can take one of three actions: place a company in conservatorship or rehabilitation
if the company can be saved or liquidation if salvage is deemed impossible. The
difference between the first two options is one of degree – regulators
guide companies in conservatorship but direct those in rehabilitation.
Typically the first sign of problems is inability to pass the financial
tests regulators administer as a routine procedure. (See Liquidaion;
Risk-based capital)
INSTITUTIONAL INVESTOR - An organization such
as a bank or insurance company that buys and sells large quantities of
securities.
INSURABLE RISK - Risks for which it is relatively
easy to get insurance and that meet certain criteria. These include being
definable, accidental in nature, and part of a group of similar risks large
enough to make losses predictable. The insurance company also must be able
to come up with a reasonable price for the insurance.
INSURANCE - A system to make large financial
losses more affordable by pooling the risks of many individuals and business
entities and transferring them to an insurance company or other large group
in return for a premium.
INSURANCE POOL - A group of insurance companies that pool assets, enabling them to provide an amount of insurance substantially
more than can be provided by individual companies to ensure large risks
such as nuclear power stations. Pools may be formed voluntarily or mandated
by the state to cover risks that can’t obtain coverage in the voluntary
market such as coastal properties subject to hurricanes. (See Beach
and windstorm plans; Fair
access to insurance requirements plans / FAIR plans; Joint
underwriting association / JUA)
INSURANCE REGULATORY INFORMATION SYSTEM / IRIS -
Uses financial ratios to measure insurers’ financial strength.
Developed by the National Association of Insurance Commissioners. Each
individual state insurance department chooses how to use IRIS.
INSURANCE SCORE - Insurance scores are confidential
rankings based on credit information. This includes whether the consumer
has made timely payments on loans, the number of open credit card accounts
and whether a bankruptcy filing has been made. An insurance score is a
measure of how well consumers manage their financial affairs, not of their
financial assets. It does not include information about income or race.
Studies have shown that people who manage their money well
tend also to manage their most important asset, their home, well. And
people who manage their money responsibly also tend to handle
driving a car responsibly. Some insurance companies use insurance scores
as an insurance underwriting and rating tool.
How Does Credit History Affect Car Insurance Rates? INSURANCE-TO-VALUE - Insurance
written in an amount approximating the value of the insured
property.
INTEGRATED BENEFITS
- Coverage
where the distinction between job-related and non-occupational
illnesses or injuries is eliminated and workers compensation
and general health insurance coverage are combined. Legal obstacles
exist, however, because the two coverages are administered
separately. Previously called twenty-four hour coverage.
INTERMEDIATION - The process
of bringing savers, investors and borrowers together so that
savers and investors can obtain a return on their money and
borrowers can use the money to finance their purchases or
projects through loans.
INTERNET INSURER - An insurer that sells exclusively
via the Internet.
INTERNET LIABILITY INSURANCE - Coverage designed
to protect businesses from liabilities that arise from the conducting of
business over the Internet, including copyright infringement, defamation,
and violation of privacy.
INVESTMENT INCOME - Income generated by the
investment of assets. Insurers have two sources of income, underwriting
(premiums less claims and expenses) and investment income. The latter can
offset underwriting operations, which are frequently unprofitable. |
