a b c d e f g h i j k l m n o p q r s t u v w



A loss that occurs at a specific time and place

Actual Cash Value (ACV)

The cost to replace an item of property at the time of loss determined by subtracting depreciation from the replacement cost of the item.

Additional Insured

An individual or company, in addition to the insured, who is listed in the Declarations portion of the policy. An example is a mortgage company that has an insurable interest in the property insured.


Principles governing the authority of any agent that represents a principal.


An individual or organization that legally represent another; a state-licensed professional who represents the insurance company in the sale and servicing of insurance; the direct link between the insurance company and the policyholder.

Agreed Value Condition

Condition found in some property insurance policies that stipulates a certain value that will meet the coinsurance requirement. If the policy limit equals or exceeds this amount, the insured will not be assessed a coinsurance penalty. Also called Stated Amount Condition.

All Risk Policy

Insurance policy that protects the insured from losses caused by any peril that is not specifically excluded by the policy. Also called Open Peril Policy or Special Coverage.


Questionnaire filled out by an agent and the prospect that is seeking insurance. The form contains information used to underwrite and rate the policy.



Oral or written statement that provides immediate insurance protection for a specified period. Designed to provide temporary coverage until a policy is issued or denied.

Bodily Injury (BI)

Defined in most policies to include injury, sickness, disease, and death resulting from any of these at any time. Bodily injury liability coverage pays for the medical expenses, legal expenses, and judgments (up to the policy limits) when the policyholder's vehicle is involved in an accident that causes such injury as stated above to another individual.

Boiler and Machinery Coverage Form

Insurance that covers the insured for losses arising out of the use of steam boilers or other machinery. May be included in the Commercial Package Policy.


An individual who represents the prospect, instead of the insurance company, in the insurance transaction.

Building and Personal Property Coverage Form

Commercial Property Coverage form that covers buildings, the insured's business personal property, and the personal property of others located at the business premises.

Business Auto Coverage Form

One of the Commercial Auto coverage forms; covers a business's owned, non-owned, and hired autos against liability and physical damage losses.

Business Liability

Liability that arises out of the conduct of a business.

Businessowners Policy (BOP)

Package policy designed to provide broad property and liability coverage for small businesses. The insured can choose one of two property forms, but there is only one liability form. Eligibility requirements are more strict than the CPP's.

Back to Top


California Earthquake Authority (CEA)

A state-sponsored partnership between private companies and the government offering earthquake insurance policies in the state.


Termination of an insurance policy by the insured or the insurance company during the policy period. Reasons for a cancellation of a policy may include but are not limited to non-payment of premiums, misrepresentation of information, etc.

Causes of Loss Form

Separate form used with the Commercial Property coverage part of the Commercial Package Policy that lists covered perils and exclusions. Several different versions provide increasingly broader coverage from basic to broad to special. An earthquake from is also available. A Causes of Loss form takes the place of the policy's "perils insured against" provisions.


A request to an insurer for compensation for a loss


Policy condition that requires an insured to pay part of a loss if the amount of insurance carried on the property is less than a specified percentage (80% on an average) of the value of the property at the time of a loss. Formerly known as the Honesty Clause.

Collision Coverage

In auto insurance, a type of physical damage coverage that covers a loss that occurs when the insured's vehicle strikes another object or vehicle. May also include upset or overturn of the insured's vehicle.

Commercial Auto Coverage Part

A part of the Commercial Package Policy that provides liability and physical damage coverage for a business's autos, including garage, trucking, and motor carrier businesses.

Commercial Crime Coverage Part

A part of the Commercial Package Policy that covers various crime exposures of businesses.

Commercial General Liability (CGL) Coverage Part

A part of the Commercial Package Policy that provides liability coverage for businesses.

Commercial Lines

Insurance designed for businesses, institutions, or organizations.

Commercial Package Policy (CPP)

Package policy for businesses developed by ISO. Insureds can select two or more of the following coverages to include in the policy: Commercial General Liability, Commercial Property, Commercial Inland Marine, Commercial Crime, Boiler and Machinery, Farm, and Commercial Auto. Most Commercial risks are eligible for the CPP.

Common Policy Conditions

Forms that must be included in the Commercial Package Policy; it contains conditions that apply to all coverages issued under the Commercial Package Policy.

Common Policy Declarations

Form that must be included in the Commercial Package Policy; contains information about the insured that applies to all coverages issued under the Commercial Package Policy.

Comprehensive Coverage

In auto insurance, a broad physical damage coverage that covers all property losses except collision and those perils or property that are specifically excluded. Also called Other Than Collision Coverage (OTC).


Portion of an insurance policy that describes the rights and duties of the insured and the insurance company under the policy.


A characteristic of a legal contract; the thing of value exchanged for the performance promised in the contract. With insurance contracts, the consideration that the insured gives is the premium payment. The consideration that the insurer gives is the promise to pay for certain losses suffered by the insured.


A legal agreement between two competent parties that promises a certain performance in exchange for a certain consideration.

Back to Top



Monetary compensation awarded by a court to an injured party.


Section of an insurance contract that shows who is insured, what property or risk is covered, when and where the coverage is effective, and how much coverage applies.


Dollar amount the insured must pay on each loss to which the deductible applies. The insurance company pays the remainder of each covered loss, up to the policy limits.


Section of an insurance policy that clarifies the meaning of certain terms used in the policy.


The loss of an asset's value over time.

Direct Loss

Financial loss resulting directly from a loss to property.

Dwelling Policy

Policy that provides property coverage to individuals and families. Covers dwellings, other structures, personal property (upon request), and fair rental value. You can also request additional living expense coverage, as well as, liability coverage. This policy is a step down from the homeowner's policy and is usually written for rental properties. It is a limited structural policy and is usually not written for owner occupied dwellings.

Back to Top


Earned Premium

Premium an insurance company has actually earned by providing insurance protection for the designated period of time.

Earthquake Insurance

Insurance that covers damage to a structure, its contents, or both as the result of an earthquake. Available as a separate policy, as an endorsement to the dwelling or homeowners policy, and through the Causes of Loss - Earthquake form for the Commercial Property coverage part.


Document attached to an insurance policy that changes the policy in some way.

Errors and Omissions Insurance (E&O)

Professional liability coverage that protects the insured against liability for committing an error or omission in the performance of professional duties.


Section of an insurance policy that lists property, perils, persons, or situations that are not covered under the policy.


A condition or situation that presents a possibility of loss.

Back to Top



Program established by law that makes property insurance available to insureds who might otherwise be uninsurable in the standard market. Stands for Fair Access to Insurance Requirements.

Financial Responsibility Laws

State laws that require owners or operators of autos to provide evidence that they have the funds to pay for automobile losses for which they might become liable. Insurance is the usual method for providing this evidence to the state.

FLAT Cancellation

Cancellation of a policy by the insured or the insurance company on its effective date.


Insurance policy that covers property wherever it is located.


A deliberate misrepresentation that causes harm; an all-out effort by one party to deceive and cheat the other.

Back to Top



Something that increases the chances of loss.

Homeowners Policy

Personal multi-line policy for homeowners that includes both property and liability coverages. There are different forms that provide varying degrees of property coverage. Liability coverage is the same in all forms.

Back to Top



Principle of insurance that provides that when a loss occurs, the insured should be restored to the approximate financial condition he or she occupied before the loss occurred, no better or no worse.

Indirect Loss

Loss that is the result or consequence of a direct loss. Also called a Consequential Loss.

Inland Marine Insurance

Form of insurance originally designed as an extension of Ocean Marine coverage to insure transportation of goods over land. Today it covers a variety of portable property, in addition to goods in transit. Available as personal or commercial insurance. Commercial Inland Marine insurance can be included in the Commercial Package Policy.


Contract or device for transferring the risk of loss from a person, business, or organization to an insurance company that agrees, in exchange for a premium, to pay for losses through an accumulation of premiums.

Insurance Services Office (ISO)

Organization established for the benefit of its member insurance companies and other subscriber companies. ISO gathers statistics, provides loss costs, drafts policy forms and coverage provisions, and conducts inspections for ratemaking purposes.

Insuring Agreement

Section of an insurance policy that describes what is covered and the perils the policy insures against.

Back to Top


Liability Insurance

Type of insurance that protects an insured from financial loss arising out of liability claims by transferring the burden of financial loss from the insured to the insurance company.


Policy language that eliminates or reduces coverage under certain circumstances or when specified conditions apply.

Back to Top


Market Value

The amount property could be sold for at the time of loss. May be used to determine the amount of reimbursement for a loss.

Medical Payments Coverage

Covers the medical bills incurred by the policyholders and their passengers after an auto accident, regardless of who is at fault.


Written or verbal misstatement of a material fact involved in the contract on which the insurer relies.

Moral Hazard

Hazard created by an individual who would be willing to create a loss situation on purpose just to collect from the insurance company.

Morale Hazard

Hazard created by an individual's tendency to contribute to a loss through his or her own irresponsible actions or carelessness.

Mortgage Condition

Condition found in property insurance policies that specifies the rights and duties of the mortgagee under the policy. Also called Loss Payable Condition.

Back to Top


Named Insured

Person, business, or other entity named in the declarations to whom the policy is issued.

Named Peril Policy

Insurance policy that insures only against perils specifically listed in the policy. Also called Specified Peril Policy.

National Flood Insurance Program

Program run by the federal government that makes flood insurance available to eligible communities at subsidized rates. Includes coverage for both buildings and personal property.


The lack of reasonable care that is required to protect others from the unreasonable chance of harm.

No-Fault Insurance

Form of automobile insurance where each insurance company pays the damages of its own insureds, regardless of who was at fault for the accident. No-fault insurance has been enacted in several states.


Decision made by an insured or insurance company to not continue coverage for another policy period after the current policy period expires.

Back to Top


Offer and Acceptance

One of the elements of a legal contract; means that a contract must involve two parties; one who makes an offer and another who accepts the offer. Also called Agreement.

Back to Top


Package Policy

Policy that includes more than one type of insurance coverage. Also called a Multi-Line Policy.


The cause of loss

Personal Articles Form

Personal Inland Marine form that provides scheduled coverage for nine optional classes of personal property: jewelry, furs, cameras, musical instruments, silverware, golf equipment, fine arts, stamp collections, and coin collections.

Personal Auto Policy

Auto policy that provides property and liability coverage for both owned and non-owned autos used, maintained, or operated by the insured and his or her family members.

Personal Injury

Injury other than bodily injury arising out of such things as libel, slander, false arrest, wrongful entry, violation of privacy, and malicious prosecution.

Personal Lines

Insurance coverages that protect individuals and their families

Personal Property

In regards to homeowner's insurance, the possessions of the insured

Personal Property Replacement Cost Endorsement

Homeowner's policy endorsement that adds replacement cost coverage for personal property rather than actual cash value.


An insurance contract


Person who buys and maintains an insurance policy; Also called the "Insured".

Policy Limit

Maximum amount the insurance company will pay for a particular loss, or for losses sustained during a period of time. Also called Limit of Coverage, Limit of Insurance, and Limit of Liability.

Policy Period

The date and time specified in the declarations for when coverage begins and ends.

Premises and Operations

Business liability exposure arising out of the business location or the activities of the business. Covered under the CGL.


Payment required to initiate and continue an insurance policy.


In agency law, the person or company being represented.


General term used to describe someone who sells insurance, such as an agent, broker, or solicitor.

Products and Completed Operations

Business liability exposure arising out of defects in the company's products or completed operations. Covered by the CGL.

Professional Liability Policy

Insurance coverage issued to a professional that covers the rendering or failing to render services of a professional nature. Policies are tailored to fit specific occupational needs.

Property Damage (PD)

Damage to or destruction of property, including loss of use of the property.

Property Insurance

Line of insurance that includes many types of coverages designed to handle the risk that a person will suffer financial loss because something he or she owns is damaged or destroyed.

Protection and Indemnity

Form of Ocean Marine Liability insurance that covers a variety of types of liability, such as damage to cargo through negligence and damage to other property or another boat resulting from collision.

Pure Risk

A risk in which there is no chance of gain, only loss.

Back to Top



A summary of coverages and approximate premiums proposed by an agent to a prospective client.

Back to Top



The basic charge an insurance company sets for various types of insurance.

Repair Cost

The cost to repair a damaged or destroyed item of property. May be the basis of reimbursement for a loss.

Replacement Cost

The cost to replace a damaged or destroyed item of property, without deduction for depreciation or market value. May be the basis of reimbursement for some losses.


A provision attached to a policy that adds or changes coverage.


The chance or uncertainty of loss.

Back to Top


Scheduled Personal Property Endorsement

Homeowners policy endorsement that provides open peril, scheduled coverage for nine optional classes of property.

Single Limit

One policy limit that applies to both bodily injury (BI) and property damage (PD) losses. Also called Combined Single Limit.

Split Limits

Policy limit that provides separate limits for bodily injury (BI) and property damage (PD).


The transfer to the insurance company of the insured's right to collect damages from another party.

Back to Top



In crime insurance, a broad term encompassing any unlawful taking of property, including burglary and robbery.

Total, totaled

Classification for a vehicle in need of repairs that will cost more than the vehicle's actual value.


A civil wrong for which monetary damages may be provided. Does not include losses arising out of contracts.

Back to Top


Umbrella Policy

Type of policy that provides broad coverage for an insured's liability over and above liability covered by an underlying contract. May also cover losses that are excluded by the underlying policy. Available as personal or commercial insurance.

Underinsured Motorists Coverage

Auto coverage that pays the difference between the insured's actual damages for bodily injury and the amount of liability insurance carried by the at-fault driver. May be added to the personal or commercial auto policy by endorsement.


Insurance company function that involves researching and evaluating insurance applicants to decide which ones are acceptable to the company as insureds.

Unearned Premium

Portion of a premium that may be returned to the policyholder if the policy is cancelled before the end of the policy term

Uninsured Motorists Coverage

Automobile coverage designed to provide protection for the insured if he or she is involved in an accident in which an uninsured motorist is at fault. Uninsured motorists include those who do not carry insurance, motorists whose insurance does not meet the state's minimum financial responsibility laws, drivers whose insurance companies are insolvent, and hit-and-run drivers who cannot be identified.

Back to Top



The absence of both people and property from a premises. Property coverage is often restricted when there are long periods of vacancy.

Vandalism & Malicious Mischief (V&MM)

Coverage provided in many property insurance policies that protects property against damage caused by vandals.

Back to Top



The intentional relinquishment of a known right.

Watercraft Package Policy

Package policy that provides property, liability, and medical payments coverage for losses arising out of the ownership, maintenance, or use of watercraft.

Workers Compensation and Employers Liability Policy

Insurance that covers an employer's obligations under workers compensation laws, which make the employer responsible for stated damages in the event of a work-related injury or illness. Also covers the insured's liability for work-related injuries under common law.


Our Companies