Insurance Glossary

Our comprehensive glossary explains common insurance terms to help you better understand your policies and coverage options. Hover over any term with a help icon throughout the site for quick definitions.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

actual cash value
The replacement cost of property minus depreciation, representing the current market value.
actuarial
Relating to statistical calculations used in the insurance industry to determine risk, premiums, and benefit structures.

B

baggage loss
Coverage that provides reimbursement for lost, stolen, or damaged baggage during your trip.
beneficiary
The person or entity designated to receive the benefits of an insurance policy , such as a death benefit from a life insurance policy .
bodily injury
Physical injury, sickness, or disease sustained by a person, including death resulting from any of these.
business interruption
Coverage that replaces lost income and pays for extra expenses when a business is affected by a covered peril .
business owner's policy
A package insurance policy for small businesses that combines general liability and property insurance.

C

cancel for any reason
An optional add-on coverage that allows you to cancel your trip for reasons not otherwise covered by the standard policy , typically reimbursing a percentage of your trip costs.
catastrophic coverage
Insurance that protects against major, infrequent losses such as natural disasters.
claim
A formal request made to an insurance company asking for payment based on the terms of the insurance policy .
co-payment
A fixed amount you pay for a covered healthcare service, usually at the time of service.
coinsurance
The percentage of costs you pay for covered healthcare services after you've met your deductible .
commercial property
Insurance that covers buildings, contents, and other property owned by a business.
coverage
The protection provided by an insurance policy , defining what risks are insured against.
cyber insurance
Coverage that helps businesses recover from data breaches, cyberattacks, and other technology-related risks.

D

deductible
The amount you pay out of pocket before your insurance coverage begins to pay. Higher deductibles typically result in lower premium costs.
diminished value
The reduction in a property's market value after it has been damaged and repaired.
directors and officers
Insurance that protects directors and officers of a company against personal losses if they are sued as a result of serving as a director or officer.
dwelling coverage
Insurance that protects the physical structure of your home.

E

errors and omissions
Professional liability insurance that protects businesses against claims of inadequate work or negligent actions.
exclusion
Specific conditions, perils, or situations listed in the policy that are not covered by the insurance.
explanation of benefits
A statement from your health insurance company explaining what medical treatments and services were paid for on your behalf.
exposure
The state of being subject to a risk or vulnerability.

F

flood insurance
A specific insurance policy covering damage caused by flooding, typically not included in standard homeowners policies.

G

general liability
Insurance that covers claims of bodily injury or property damage for which your business may be legally responsible.

I

indemnification
Compensation for damage or loss, restoring the insured to the same financial position they were in before the loss occurred.
insurance-to-value
The relationship between the amount of insurance coverage and the value of the insured property.

L

liability coverage
Protection against claims resulting from injuries and damage to other people or property.
loss control
Practices designed to reduce the likelihood of a loss or to reduce the severity of a loss after it occurs.
loss of use
Coverage that pays for additional living expenses if your home becomes uninhabitable due to a covered loss.

M

medical evacuation
Coverage for emergency transportation to the nearest adequate medical facility or back to your home country if medically necessary.

N

network provider
A healthcare provider who has contracted with an insurance company to provide services to plan members at pre-negotiated rates.

O

out-of-pocket maximum
The most you have to pay for covered services in a plan year, after which the insurance company pays 100% of the costs.

P

peril
A specific risk or cause of loss covered by an insurance policy , such as fire, theft, or windstorm.
personal injury
Injuries to a person's rights or reputation, such as libel, slander, false arrest, or invasion of privacy.
personal property
Belongings that are not permanently attached to a structure, such as furniture, clothing, and electronics.
pet insurance
Health insurance for pets that covers veterinary expenses for illness or injury.
policy
A legal contract between the policyholder and the insurance company detailing the terms and conditions of insurance coverage .
policyholder
The individual or entity that owns the insurance policy and pays the premium .
pre-existing condition
A medical condition that existed before the effective date of your insurance policy , which may be excluded from coverage or have limited coverage .
premium
The amount paid by a policyholder to an insurance company for coverage under an insurance policy , typically paid monthly, quarterly, or annually.
professional liability
Insurance that protects professionals against claims of negligence or failure to perform professional duties.
property damage
Physical injury to tangible property, including the loss of use of that property.

R

replacement cost
The cost to replace damaged property with new property of the same kind and quality, without deducting for depreciation.
rider
An add-on to an insurance policy that provides additional coverage for items or perils not covered in the standard policy .
risk assessment
The process of identifying and analyzing potential events that may negatively impact individuals, assets, or the environment.
risk mitigation
The process of reducing risk exposure or minimizing the likelihood and impact of potential risks.
risk retention
The decision to accept and bear certain risks rather than transferring them through insurance.
risk transfer
The process of shifting risk from one party to another, often through insurance contracts.

S

subrogation
The right of an insurer to pursue a third party that caused an insurance loss to the insured, in order to recover the amount paid to the insured for the loss.

T

third-party damage
Damage caused to someone else's property for which you may be held legally responsible.
travel delay
Coverage that provides reimbursement for additional expenses incurred when your trip is delayed for a covered reason.
trip cancellation
Coverage that reimburses prepaid, non-refundable trip costs if you need to cancel your trip for a covered reason.
trip interruption
Coverage that reimburses the unused portion of your trip if it's interrupted for a covered reason.

U

umbrella policy
Additional liability insurance that provides protection beyond existing policy limits and coverages.
underwriting
The process an insurance company uses to determine whether to accept an applicant for coverage and what premium to charge.

W

wedding insurance
Coverage that protects against financial loss from cancellation or postponement of a wedding due to unforeseen circumstances.
workers' compensation
Insurance that provides medical benefits and wage replacement to employees injured in the course of employment.