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Insurance Definitions and Insurance Terms
Insurance Terms By Alphabet
Insurance Glossary and Insurance Terms Definitions are below.

Choose the letter of the alphabet that your Insurance question or term falls under. You may browse the
definitions to obtain an understanding of the product you have. These definitions are not limited to just car
Insurance. Thank you for visiting our site.
A single Insurance policy that combines several coverages previously sold separately. Examples include
A system proposed In the 1990s In which auto Insurance premiums would be paid to state governments
through a per-gallon surcharge on gasoline.

PENSION BENEFIT GUARANTY CORPORATION
An independent federal government agency that administers the Pension Plan Termination Insurance
program to ensure that vested benefits of employees whose pension plans are being terminated are paid
when they come due. Only defined benefit plans are covered. Benefits are paid up to certain limits

PENSIONS
Programs to provide employees with retirement income after they meet minimum age and service
requirements. Life insurers hold some of these funds. Since the 1970s responsibility for funding retirement
has increasingly shifted from employers (defined benefit plans that promise workers a specific retirement
income) to employees (defined contribution plans financed by employees that may or may not be matched
by employer contributions).

PERIL
A specific risk or cause of loss covered by an Insurance policy, such as a fire, windstorm, flood, or theft. A
named-peril policy covers the policyholder only for the risks named In the policy In contrast to an all-risk
policy, which covers all causes of loss except those specifically excluded.

PERSONAL ARTICLES FLOATER
A policy or an addition to a policy used to cover personal valuables, like jewelry or furs.

PERSONAL INJURY PROTECTION Coverage / PIP
Portion of an auto Insurance policy that covers the treatment of injuries to the driver and passengers of the
policyholder’s car.

PERSONAL LINES
Property/casualty Insurance products that are designed for and bought by individuals, including homeowners
and automobile policies.

POINT-OF-SERVICE PLAN
Health Insurance policy that allows the employee to choose between in-network and out-of-network care
each time medical treatment is needed.

POLICY
A written contract for Insurance between an Insurance company and policyholder stating details of Coverage.

POLICYHOLDERS' SURPLUS
The amount of money remaining after an insurer’s liabilities are subtracted from its assets. It acts as a
financial cushion above and beyond reserves, protecting policyholders against an unexpected or
catastrophic situation.

POLITICAL RISK Insurance
Coverage for businesses operating abroad against loss due to political upheaval such as war, revolution, or
confiscation of property.

POLLUTION Insurance
Policies that cover property loss and liability arising from pollution-related damages, for sites that have been
inspected and found uncontaminated. It is usually written on a claims-made basis so policies pay only claims
presented during the term of the policy or within a specified time frame after the policy expires.

PREFERRED PROVIDER ORGANIZATION
Network of medical providers which charge on a fee-for-service basis, but are paid on a negotiated,
discounted fee schedule.

PREMISES
The particular location of the property or a portion of it as designated In an Insurance policy.

PREMIUM
The price of an Insurance policy, typically charged annually or semiannually

PREMIUM TAX
A state tax on premiums paid by its residents and businesses and collected by insurers.

PREMIUMS In FORCE
The sum of the face amounts, plus dividend additions, of life Insurance policies outstanding At a given time.

PREMIUMS WRITTEN
The total premiums on all policies written by an insurer during a specified period of time, regardless of what
portions have been earned. Net premiums written are premiums written after reinsurance transactions.

PRIMARY COMPANY
In a reinsurance transaction, the Insurance company that is reinsured.

PRIMARY MARKET
Market for new issue securities where the proceeds go directly to the issuer.

PRIME RATE
Interest rate that banks charge to their most creditworthy customers. Banks set this rate according to their
cost of funds and market forces.

PRIOR APPROVAL STATES
States where Insurance companies must file proposed rate changes with state regulators, and gain approval
before they can go into effect.

PRIVATE PLACEMENT
Securities that are not registered with the Securities and Exchange Commission and are sold directly to
investors

PRODUCT LIABILITY
A section of tort law that determines who may sue and who may be sued for damages when a defective
product injures someone. No uniform federal laws guide manufacturer’s liability, but under strict liability, the
injured party can hold the manufacturer responsible for damages without the need to prove Negligence or
fault.

PRODUCT LIABILITY Insurance
Protects manufacturers’ and distributors’ exposure to lawsuits by people who have sustained bodily injury or
property damage through the use of the product.

PROFESSIONAL LIABILITY Insurance
Covers professionals for Negligence and errors or omissions that injure their clients.

PROOF OF LOSS
Documents showing the Insurance company that a loss occurred.

PROPERTY/CASUALTY Insurance
Covers damage to or loss of policyholders’ property and legal liability for damages caused to other people or
their property. Property/casualty Insurance, which includes auto, homeowners and commercial Insurance, is
one segment of the Insurance industry. The other sector is life/health. Outside the United States,
property/casualty Insurance is referred to as non life or general Insurance.

PROPERTY/CASUALTY Insurance CYCLE
Industry business cycle with recurrent periods of hard and soft market conditions. In the 1950s and 1960s,
cycles were regular with three year periods each of hard and soft market conditions In almost all lines of
property/casualty Insurance. Since then they have been less regular and less frequent.

PROPOSITION 103
A November 1988 California ballot initiative that called for a statewide auto Insurance rate rollback and for
rates to be based more on driving records and less on geographical location. The initiative changed many
aspects of the state’s Insurance system and was the subject of lawsuits for more than a decade.

PURCHASING GROUP
An entity that offers Insurance to groups of similar businesses with similar exposures to risk.

PURE LIFE ANNUITY
A form of annuity that ends payments when the annuitant dies. Payments may be fixed or variable.




NOTICE: These glossary definitions provide a brief description of the terms and phrases used within the
Insurance industry. These definitions are not applicable In all states or for all Insurance and financial
products. This is not an Insurance contract. Other terms, conditions and exclusions apply. Please read your
official policy for full details about coverages. These definitions do not alter or modify the terms of any
Insurance contract. If there is any conflict between these definitions and the provisions of the applicable
Insurance policy, the terms of the policy control. Additionally, this informational resource is not intended to
fully set out your rights and obligations or the rights and obligations of the Insurance company, agent or
agency. If you have questions about your Insurance, you should contact your Insurance agent, the
Insurance company, or the language of the Insurance policy.
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