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ACTUAL CASH VALUE - A form of insurance that pays damages equal to the replacement value of damaged property minus depreciation.
ACTUARY - An insurance professional skilled in the analysis, evaluation,
and management of statistical information. Evaluates insurance firms' reserves, determines rate and rating methods, and determines other business and financial risks.
ADDITIONAL LIVING EXPENSES - Extra charges covered by homeowners policies over and above the policyholder's customary living expenses. They kick in when the insured requires temporary shelter due to damage by a covered peril that makes the home temporarily uninhabitable.
ADJUSTER- An individual employed by a property/casualty insurer to evaluate losses and settle policyholder claims. These adjusters differ from public adjusters; who negotiate with insurers on behalf of policyholders, and receive a portion of a claims settlement. Independent adjusters are independent contractors who adjust claims for different insurance companies.
AGENCY COMPANIES- Companies that market and sell products via independent agents.
ALTERNATIVE DISPUTE RESOLUTION / ADR- Alternative to going to court to settle disputes. Methods include arbitration, where disputing parties agree to be bound to the decision of an independent third party, and mediation, where a third party tries to arrange a settlement between the two sides.
ANNUAL STATEMENT -Summary of an insurer's or reinsurer's financial operations for a particular year, including a balance sheet. It is filed with the state insurance department of each jurisdiction in which the company is licensed to conduct business.
ANTITRUST LAWS- Laws that prohibit companies from working as a group to set prices, restrict supplies or stop competition in the marketplace. The insurance industry is subject to state antitrust laws but has a limited exemption from federal antitrust laws. This exemption, set out in the McCarran-Ferguson Act, permits insurers to jointly develop common insurance forms and share loss data to help them price policies.
APPRAISAL- A survey to determine a property's insurable value, or the amount of a loss.
ARBITRATION- Procedure in which an insurance company and the insured or a vendor agree to settle a claim dispute by accepting a binding or non-binding decision made by a third party.
ARSON -The deliberate setting of a fire.
ASSETS - The property owned, in this case by an insurance company, including stocks, bonds, and real estate investments. State laws require a conservative valuation of assets so they do not allow insurance companies to list some assets whose values are uncertain, such as furniture, fixtures, debit balances, and accounts receivable that are more than 90 days past due.
ASSIGNED RISK PLANS - Facilities through which drivers can obtain auto insurance if they are unable to buy it in the regular or voluntary market. These are the most well-known type of residual auto insurance market, which exist in every state. In an assigned risk plan, all insurers selling auto insurance in the state are assigned these drivers to insure, based on the amount of insurance they sell in the regular market
AUTO POLICY - There are basically six different types of coverages. Some may be required by law. Others are optional. They are:
- Bodily injury liability, for injuries the policyholder causes to someone else.
- Medical payments or Personal Injury Protection (PIP) for treatment of injuries to the driver and passengers of the policyholder's car.
- Property damage liability, for damage the policyholder causes to someone else's property.
- Collision, for damage to the policyholder's car from a collision.
- Comprehensive, for damage to the policyholder's car not involving a collision with another car (including damage from fire, explosions, earthquakes, floods, and riots), and theft.
- Uninsured motorists coverage, for costs resulting from an accident involving a hit-and-run driver or a driver who does not have insurance.
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