Insurance

Vocabulary

adhesion contract

"take it or leave it" contract, such as an insurance contract, where the one drafting the contract has the negotiating power. The nondrafting party must sign or seek services elsewhere.

beneficiary

person who gets the benefit or payment from an insurance contract or policy

coverage

amount of insurance protection that an insurer provides to an insured

exclusion

item or risk that is specifically not covered in accordance with the terms of an insurance policy

indemnify

to enter into a contractual obligation to pay a person or company in case there is a specific type of loss

insurable

person or company who is qualified to buy a policy from an insurance company

insurable interest

exists if loss would cause the policy holder to suffer financial harm. In order to purchase an insurance policy the purchaser needs an insurable interest.

insurance policy

document containing the terms and conditions of an insurance contract and the applicable coverage

insured

person or company that is covered under an applicable policy issued by an insurer

insurer

company that provides or issues an insurance policy to a person or company

key employee insurance

life insurance on the key person in a business

material fact

piece of information that a reasonable person would recognize as important or relevant to a decision

premium

amount of money an insured pays each month to an insurance company for a policy

property insurance

policy issued by an insurance company that protects against fire, theft, or weather damage to structures and the items within them

risk

uncertainty about a loss, such as damage or injury, against which an insurance policy provides coverage

uninsurable risk

situation that presents unacceptable or unknowable chance of loss or a situation in which providing insurance would be illegal

waiver

act, type of conduct, or provision in a policy that makes an insured's right or claim invalid