Insurance Glossary: C

Question: What is a Cafeteria Plan?

Answer: A cafeteria plan is a type of employee benefits plan that gives the policy holder options. This includes healthcare benefits options, supplementary insurance, and flexible spending accounts. The unallocated money can be used to purchase additional healthcare options or pay deductibles.

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Question: What is a Camera Floater?

Answer: A camera floater is a type of inland marine policy insuring cameras and photo equipment.

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Question: What is Cancel?

Answer: To cancel is a legal termination of an insurance contract before its normal expiration.

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Question: What is a Cancellation Notice?

Answer: A cancellation notice is a legal notice sent by one party of the policy to the other of intent to cancel.  The policy cancellation clause and applicable statutes and regulations must be followed with respect to how the notice must be given, the number of days to be allowed, and how the notice must be delivered.

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Question: What is a Captive Agent?

Answer: A captive agent can, by agreement, only represent only one company.  It is sometimes known as an exclusive agent. Agreements with their companies vary from strict exclusivity to first right of refusal.

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Question: What is Care, Custody, or Control?

Answer: Most liability policies have provisions that exclude coverage for physical damage or loss to property while it is in the care, custody or control of the insured.  At least two methods are available to buy back some or all of the excluded care, custody, or control coverage. Insureds can buy endorsements to the liability policy, such as the broad form property damage endorsement or its company-specific equivalent which will provide somewhat limited coverage, or purchase inland marine coverage such as bailees’ forms.

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Question: What is a Career Agent?

Answer: A career agent is a person who is licensed to write life insurance and does so exclusively for a single company.

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Question: What is Cargo Insurance?

Answer: Cargo insurance is coverage for property that is being transported by trucks, trains, planes, ships, or boats.

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Question: What is a Carrier?

Answer: A carrier is an insurance company providing coverage for a particular risk.

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Question: What is a Cash Payment Option?

Answer: A cash payment option in some life insurance plans has a cash dividend that is paid to the policy holder.

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Question: What is a Cash Refund Annuity?

Answer: In a cash refund annuity policy, the remaining sum is paid to a beneficiary if the policy holder dies before the total annuity has been paid.

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Question: What is Cash Surrender Value?

Answer: If the insured wants to terminate a life insurance policy, the cash surrender value option provides the person with the cash amount agreed to at the beginning of the plan. The total is based on the length of time the policy was held, policy limits and payments minus the surrender fees, loans, and interest.

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Question: What is Cash Value?

Answer: Prior to the maturity of an insurance policy, the insured may cancel the plan and receive the cash value. The total is the amount stated in the policy based on policy type, limits, and payments minus surrender fees, loans, and interest.

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Question: What is Casualty Insurance?

Answer: Casualty insurance is for personal injuries or damage to property of others. Includes many types of insurance: general liability, workers compensation, plate glass, burglary, boiler and machinery, and aviation insurance.

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Question: What is a Catastrophe?

Answer: A catastrophe is a severe loss resulting from a large number of losses in one incident such as a wide spread tornado or a singular loss resulting a in very large dollar amount such as the collapse of the World Trade Center.

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Question: What is a Cause of Loss?

Answer: Previously called “peril”, a cause of loss is the actual type of event that causes the loss.  Examples are: theft, collision, earth-quake, flood, fire, etc.

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Question: What is a Certificate of Insurance?

Answer: A certificate of insurance is normally a single page version of an insurance policy provided to those with an interest in reviewing coverage.

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Question: What is a Certified Insurance Counselor (CIC)?

Answer: Certified Insurance Counselor (CIC) is a professional designation signifying the completion of specific course work.

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Question: What is a Chartered Life Underwriter (CLU)?

Answer: Chartered Life Underwriter (CLU) is a professional designation for those specializing in life insurance and estate planning. The title is earned through coursework and exams.

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Question: What is a Chartered Property Casualty Underwriter (CPCU)?

Answer: Chartered Property Casualty Underwriter (CPCU) is a premier designation earned by an insurance underwriter specializing in property casual insurance and risk management. In order to attain CPCU status, the agent must take specialized courses and exams.

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Question: What is a Civil Commotion?

Answer: Civil commotion is a disturbance involving a large number of people, i.e., music concerts, religious gatherings, and protesters. For insurance purposes it is a covered peril for most property policies.

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Question: What is a Claimant?

Answer: A claimant is an individual who presents a claim – either the insured or a third party.

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Question: What is Claims Adjustment?

Answer: After you submit a claim to your insurance company they will assign it to a person who determines if coverage is applicable and to what extent. In the claims adjustment, they will determine what amount the company is willing to pay and negotiate a settlement with you.

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Question: What is Claims-Made?

Answer: Claims-made is an insurance policy under which the coverage trigger is based on the date the loss is reported.

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Question: What is a Claims Reserve?

Answer: A claims reserve is a financial reserve established by an insurance company on their financial statement, it includes the losses incurred but not reported and losses due but not yet paid based on the companies’ best estimate of loss as well as those statutorily imposed.

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Question: What is a CLUE Report?

Answer: CLUE Report stands for Comprehensive Loss Underwriting Exchange.  It provides information on a person’s loss history, generally under an auto or homeowners policy. Insurance companies typically use these reports to assist in determining whether an applicant’s request for coverage is accepted and/or what premium to charge.

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Question: What a Coinsurance Clause?

Answer: A coinsurance clause in some property policies requires the insured to carry insurance at least equal to a percentage of value. If that percentage isn’t met, a partial loss will not be paid in full.

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Question: What is Collision?

Answer: Collision is damage to a motor vehicle caused by an impact with another vehicle or object, or by the vehicle’s over-turn.

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Question: What is a Collision Damage Waiver?

Answer: A collision damage waiver is a rental agreement between automobile renter and retail agency, and it sometimes contains a provision for an additional fee to waive its rights to collect any collision losses from the renter.

 

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Question: What is Collusion?

Answer: Collusion is an agreement between two or more people or businesses who conspire together with the intent of deceiving or defrauding another party.

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Question: What is Combined Single Limit?

Answer: The combined single limit is the policy limit under a liability policy that indicate a single dollar amount that applies to either bodily injury and/or property damage that may occur during an occurrence or policy period.

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Question: What is Commercial Lines?

Answer: Commercial lines is insurance written for businesses instead of individuals.

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Question: What is Commercial Umbrella Liability Insurance?

Answer: Commercial umbrella liability insurance protects policyholders for claims in excess of the limits of their primary policies. An umbrella policy might also provide coverage for some sources of loss that are not covered by the primary policies, but it is more common for commercial umbrellas to be “following form” excess.

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Question: What is Commission?

Answer: A commission is a portion (usually a set percentage) of the premium paid to an agent or broker for selling a policy.

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Question: What is a Commissioner of Insurance?

Answer: A commissioner of insurance is the state official enforcing insurance laws.

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Question: What is Comparative Negligence?

Answer: Under comparative negligence, the damages are collectible in proportion to one’s degree of negligence. In most instances, damages cannot be collected at all if the claimant’s negligence was greater than that of the other party.  Laws vary from state to state. Some states use a system of contributory negligence.

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Question: What are Compensatory Damages?

Answer: Compensatory damages are alleged by the claimant for actual injuries or expenses sustained.

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Question: What is Completed Operations Coverage?

Answer: Completed operations coverage is insurance for liability claims arising out of work completed.

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Question: What is Comprehensive Automobile Physical Damage Coverage?

Answer: Comprehensive automobile physical damage coverage is an “all-risk” type of physical damage protection for automobiles including theft but excluding loss by collision. Includes such things as fire, flood, hail, etc.

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Question: What is Comprehensive Personal Liability?

Answer: Comprehensive personal liability insurance pays money for damage or injury caused to others (other than auto or commercial losses).  Included in homeowner’s or tenant’s policies.

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Question: What is Compulsory Insurance?

Answer: Compulsory insurance is coverage required by statute, such as workers compensation, liquor legal liability, and automobile liability.

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Question: What is a Computer Fraud Coverage Form?

Answer: A computer fraud coverage form is designed to protect against loss involving computer fraud.

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Question: What is Computer Insurance?

Answer: Computer insurance protects computers and related equipment to supplement the small amounts available on a homeowners’ policy.

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Question: What is Concealment?

Answer: Concealment is the failure to disclose a material fact could result in a court setting aside (rescinding) an insurance policy.

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Question: What is a Conditional Premium Receipt?

Answer: The conditional premium receipt provides payment to a beneficiary should the insured die before the policy is issued. The insurance company either pays the entire policy limit or a lesser limit indicated in the policy.

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Question: What is a Condominium?

Answer: A condominium is a form of real estate ownership becoming increasingly popular.  It is the individual ownership of a single unit in a multiple-unit building or group of buildings, together with a percentage interest in that part of the total property owned jointly by all unit owners.  In an apartment building, each apartment would be a unit and the stairways, pathways and parking areas would be in common ownership.  Condominium property requires special insurance treatment.

Condominium property requires special insurance treatment. It is the individual ownership of a single unit in a multiple-unit building or group of buildings, together with a percentage interest in that part of the total property owned jointly by all unit owners.  In an apartment building, each apartment would be a unit and the stairways, pathways and parking areas would be in common ownership.

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Question: What is Condominium Association Coverage?

Answer: Insurance coverage for the specific liability exposures of condominium associations. Includes property held in common and communal liability.

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Question: What is Consequential Loss?

Answer: A consequential loss is an indirect loss, usually associated with a business interruption or indemnification type losses, resulting in a reduction in the value of property that is a result of a direct damage loss.  Consequential losses are different than ensuing losses.  Ensuing losses are further or additional direct damage losses that have been initiated by the original direct damage cause of loss.

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Question: What is Consortium?

Answer: Consortium is the rights of a spousal, parent, child, or other relative to enjoy companionship, affection, and intimacy.  That suffering party may seek damages because of injury or death.

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Question: What is Constructive Total Loss?

Answer: A constructive total loss is damage to property that is so great that the cost of recovering and repairing the property is deemed to exceed the total insured value.

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Question: What are Contents?

Answer: Contents are the personal property in a building.

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Question: What is Contents Rate?

Answer: The contents rate is the insurance premium for the contents of the property rather than the property itself. This helps determine the amount of coverage a policy has in cases of fire.

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Question: What is Contestable Period?

Answer: A contestable period averages two years and the insured may cancel or rescind the insurance policy if fraud or misrepresentation is discovered.

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Question: What is Contingent Business Income?

Answer: A contingent business income is insurance against loss due to business interruption by insured loss occurring at the premises of another on which the insured is dependent.

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Question: What is Contingent Liability?

Answer: A contingent liability is incurred by an insured as a result of negligence on the part of independent persons such as when a principal contractor incurs liability due to the acts of a subcontractor.

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Question: What is “CE” (Continuing Education)?

Answer: Continuing education is the normally statutorily mandated ongoing process for the purpose of keeping insurance agents updated on the many legislative and coverage changes. Accomplished through courses, workshops, and seminars. Normally does not include marketing or company specific information.

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Question: What is Continuous Premium Whole Life Insurance?

Answer: A continuous premium whole life insurance policy is payable for the life if the insured or until 100 years of age.

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Question: What is a Contractors’ Equipment Floater?

Answer: A contractors’ equipment floater is an inland marine form which insures the equipment, tools, and materials of a contractor.

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Question: What is Contractors Protective Liability?

Answer: Contractors protective liability provides coverage for the acts of contractors and subcontractors hired by the insured and their own negligent supervision of the work performed.

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Question: What is Contractual Liability?

Answer: Contractual liability is a legal obligation assumed under the terms of a contract.

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Question: What is Contractual Liability Insurance?

Answer: Contractual liability insurance is coverage to provide protection for the liability exposure assumed under a contract.

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Question: What is Contributory Negligence?

Answer: Contributory negligence is a common law defense in which the plaintiff must be totally free from fault in order to recover from a negligent defendant.

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Question: What is Conversion Privilege?

Answer: Conversion privilege is a stipulation within life and health insurance plans that allows the insured to change policies or increase coverage limits. The insured may do so without having to take a physical examination or prove insurability.

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Question: What is Course of Construction Insurance?

Answer: Course of Construction Insurance – also known as Builder’s Risk Insurance – An insurance policy designed to cover losses incurred during the building of a structure. Usually contains perils such as fire and theft, but can include flood, earthquake, and other probable causes of loss.

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Question: What is Credit Insurance?

Answer: Credit insurance may refer to either of the following:

1) A type of life or health insurance which protects the interests of the lender or creditor in the event of the death of disability of the insured. This is often written in group insurance and can also be written to protect the interests of the debtor.

2) Protection for one’s business against losses incurred through non-payment of commercial debt.

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Question: What is Credit Life Insurance?

Answer: Credit life insurance pays the remaining amount owed on an installment loan in the event that the insured (debtor) dies.

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Question: What is a Credit Score or Insurance Score?

Answer: A credit score or insurance score is a number that represents an individual’s financial history. It is used as an underwriting tool by insurers.

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Question: What is Crime Coverage?

Answer: Crime coverage are insurance policies available to protect against losses of money, securities, and property due to loss from employee dishonesty, forgery, theft, burglary, robbery, kidnap, extortion, and fraud.

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Question: What is Current Assumption Whole Life Insurance?

Answer: In current assumption whole life insurance, the premiums are linked to current interest rates. On the predetermined anniversary of the policy, the premium is raised or lowered depending upon the mortality, expenses, and investment returns.

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What is Cyber Insurance?

Answer: Cyber insurance is a type of commercial insurance designed to protect against cyber risks such as hacking.

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Question: What are Cyber Risks?

Answer: Cyber risks are potential losses incurred by businesses that operate online. This includes hacking.

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