Insurance Glossary: P-Q

Question: What is P & I insurance?

Answer: P & I insurance is a form of “liability” insurance for shipowners.

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Question: What is a Pair-and-Set Clause?

Answer: In inland marine coverage, a pair-and-set clause covers the full value of a pair or set of jewelry or fine arts when only a part has been damaged, stolen, or lost.

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Question: What is Pandemic Coverage?

Answer: Pandemic coverage is an insurance policy to cover loss of income directly related to a government declaration of a global or widespread epidemic.

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Question: What is a Parapet?

Answer: A parapet is a fire division wall that extends through the roof and divides a building.

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Question: What is a Partial Loss?

Answer: A partial loss is a loss that is less than the maximum allowed under an insurance policy.

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Question: What is Partnership Insurance?

Answer: Partnership insurance is life and health insurance sold to a business. It protects one partner in the event that another partner becomes disabled or dies.

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Question: What is a Peak Season Endorsement?

Answer: Certain businesses demand larger than normal inventory at certain times of the year. Also, there are businesses that need larger than normal revenue and profits during a certain part of the year. Peak season endorsement can adjust policy limits to meet these increased needs.

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Question: What is Per Occurrence Limit?

Answer: A per occurrence limit is a maximum amount an insurance company will pay for all claims arising from a single incident.

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Question: What is a Per Person Limit?

Answer: A per person limit is the maximum amount an insurance company will pay per person for all claims arising from a single incident.

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Question: What is Percentage of Loss Deductible?

Answer: A percentage of loss deductible is typically 1% or 2% of the total loss which will be subtracted from the loss paid. As the amount of loss increases the amount of the deductible will also increase.

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Question: What is a Percentage of Value Deductible?

Answer: A percentage of value deductible is typically 1% or 2% of the total value of the building or dwelling insured, which will be subtracted from the loss paid.

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Question: What is a Performance Bond?

Answer: A performance bond is a surety bond that guarantees the performance of a contract.

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Question: What is Peril?

Answer: A peril is the cause of loss, such as fire, wind, or mishap.

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Question: What is Permanent Partial Disability?

Answer: A permanent partial disability is the inability to perform all or part of one’s occupation.

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Question: What is Permanent and Total Disability?

Answer: Permanent and total disability is the inability of a person to perform and hold an occupation for a certain period of time. The disability is caused by an illness or injury.

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Question: What is Permanent Total Disability?

Answer: The permanent total disability is the inability to perform the tasks of one’s job or occupation. Disability caused by illness or injury.

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Question: What is a Permit or License Bond?

Answer: A permit or license bond is a surety bond often required by municipalities and other public authorities to indemnify them against loss from breach of regulation or ordinance.

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Question: What is Persistency?

Answer: In life insurance, persistency is the percentage of customers that pay their renewal premiums.

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Question: What is a Personal Articles Floater?

Answer: A personal articles floater is insurance coverage for personal property.

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Question: What is Personal Injury?

Answer: Personal injury is insurance for a specific kind of injury or damage, other than bodily injury, resulting from slander, libel, wrongful detention, wrongful eviction, wrongful entry, or the invasion of privacy of a premises.

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Question: What is Personal Lines?

Answer: A personal lines insurance policy is for individuals rather than businesses, for which the term “commercial lines” applies.

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Question: What is Personal Property?

Answer: Personal property differs from fixed, structural property.

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Question: What is Personal Umbrella Liability Insurance?

Answer: A personal umbrella liability insurance is for claims in excess of the limits of their personal automobile, residential liability, and other personal liability policies. It might also provide coverage for some sources of loss that are not covered by their primary policies.

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Question: What is Pet Insurance?

Answer: Pet insurance is a life and/or health insurance for animals, pets or livestock.

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Question: What is Philatelic Property?

Answer: Philatelic property refers to insurance for physical loss of stamps and related material.

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Question: What is a Physical Damage Loss?

Answer: A physical damage loss is a loss to tangible property.

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Question: What is PIA- Professional Insurance Agents?

Answer:The PIA- Professional Insurance Agents is a trade association with headquarters in Alexandria, VA.

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Question: What is Pilferage?

Answer: Pilferage is theft in small quantities.

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Question: What is Piracy?

Answer: Piracy is robbery on the high seas or unauthorized duplication of copyrighted materials.

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Question: What is a Placer?

Answer: A placer is the position in an insurance agent’s office for interacting with insurance companies to find the best value for the insured.

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Question: What is a Plaintiff?

Answer: A plaintiff is any person or entity who initiates a lawsuit.

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Question: What is a Plan Determination Letter?

Answer: A plan determination letter is the IRS ruling which determines if a pension plan meets all of the requirements of a qualified plan.

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Question: What is a Plan Participant?

Answer: A plan participant is the person who accrues benefits through their employee benefit or pension plan.

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Question: What is a Plan Sponsor?

Answer: A plan sponsor is the business or other entity that sponsors a health, pension, or other benefit plan for their employees and/or participants.

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Question: What is Pleasure Use?

Answer: Pleasure use is using a car for fun rather than work or going to and from work.

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Question: What are Points or Surcharge Points?

Answer: Insurance companies may use a system of points or surcharge points assigned to moving violations to determine pricing or acceptability. Insurance companies that use an automated underwriting system may use a system of points for other risk characteristic.

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Question: What is a Policy Fee?

Answer: A policy fee is a charge made by an agent, in addition to the premium set forth in the policy, which is kept by the agent. State regulation may prohibit or demand that such a fee be reasonable.

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Question: What is a Policy Provision?

Answer: A policy provision is any part of an insurance policy that describes the policy’s coverage.

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Question: What is Policy Year?

Answer: A policy year is the 365 days from the effective date of a policy until the expiration date.

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Question: What is a Policyholder?

Answer: A policyholder is the person or entity to whom a policy is issued.

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Question: What is a Policyholder Surplus?

Answer: Known as PHS on a financial statement, a policyholder surplus is the total of all unassigned surplus and capital.

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Question: What is a Preferred Provider Organization?

Answer: Preferred Provider Organization or PPO is a health plan, which allows greater freedom for participants to select doctors and hospitals they wish to use. Under the plan preferred providers may result in lower fees to participants, while selecting an out-of-network provider could result in higher fees.

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Question: What is Preferred Risk?

Answer: Preferred risk is a person or entity with a high degree of loss predictability to whom the insurance company is able to charge an adequate premium.

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Question: What is a Premium?

Answer: A premium is the money an insurance company charges for coverage.

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Question: What is a Premium Audit?

Answer: A premium audit is an examination of a policyholder’s operations, records, and/or books in order to determine the actual exposure units; the actual premium may be adjusted.

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Question: What is Premium Payment Mode?

Answer: Premium payment mode is the method or timing of the premium payment.

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Question: What is a Preretirement Survivor Annuity?

Answer: In a retirement plan, a preretirement survivor annuity is the stipulation that requires all or part of the benefits to go toward the spouse if the plan holder dies before retirement.

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Question: What is Presumptive Disability?

Answer: A presumptive disability is permanent, based upon the type of injury. This status is determined by the insurer.

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Question: What is a Primary Beneficiary?

Answer: A primary beneficiary is the first person listed on the policy to receive the benefits of a life insurance policy. Others will have rights to proceeds only if primary beneficiary is deceased.

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Question: What is Primary Health Coverage?

Answer: For individuals that have more than one health insurance plan, primary health coverage will pay benefits on a medical claim first. The primary plan’s benefits will not change if the patient also has a secondary plan.

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Question: What is Principal?

Answer: On a surety bond, the principal is the one whose honesty, fidelity or ability is guaranteed.

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Question: What is Prior Acts Coverage?

Answer: Prior acts coverage is a provision on a claims-made policy to cover losses that occurred prior to the inception date of the policy.

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Question: What is Private Fee-for-Services?

Answer: Private Fee-for-Services or PFFS is an alternative to Original Medicare or Medigap. The plan is a type of Medicare Advantage Plan (Part C). It determines fees for doctors, health care providers, and hospitals and how much you must pay.

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Question: What is Private Passenger Automobile?

Answer: A private passenger automobile is any auto, car, or other type of vehicle that isn’t used for used for business purposes.

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Question: What is Prize Indemnification Insurance?

Answer: A prize indemnification insurance is a policy designed to provide coverage or indemnification for prizes awarded on prearranged contests.

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Question: What is Pro Rate Cancellation?

Answer: Pro rate cancellation of the insurance contract is when the premiums are adjusted to reflect the amount of time the contract has been in effect.

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Question: What is a Probationary Period?

Answer: The probationary period is the time between when the policy goes into effect and when coverage actually begins.

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Question: What are Proceeds?

Answer: Proceeds are the policy benefits that are payable upon the death of the insured or after a set time period.

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Question: What is a Producer?

Answer: A producer is the person who sells insurance.

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Question: What is Product-Completed Operations Insurance?

Answer: Product-completed operations insurance is designed to cover liability for injury, loss, or damage that a merchant or a manufacturer may incur as the result of a defect in a product that they either sold or manufactured.

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Question: What is Product Liability?

Answer: Product liability is what a manufacturer or trader may incur as the result of a faulty product.

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Question: What is Product Recall Insurance?

Answer: Product recall insurance pays the expenses for the recall of a faulty product.

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Question: What is Product Tampering Insurance?

Answer: Product tampering insurance pays the expense of recalling items that may have been tampered with.

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Question: What is Professional Liability?

Answer: Professional liability is an insurance policy that covers the failure to act or acting improperly in the performance of professional services.

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Question: What is Proof of Loss?

Answer: Proof of loss is a statement an insured must give (and/or sign) before a loss can be paid.

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Question: What is Property and Casualty Insurance?

Answer: Property and casualty insurance covers property losses and legal liability related to injuries or property damages.

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Question: What is Property Damage Liability Insurance?

Answer: Property damage liability insurance covers the insured’s legal liability of damage to property of others caused by the insured’s negligence.

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Question: What is Property Insurance?

Answer: Property insurance is for real and personal property against physical loss or damage.

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Question: What is Property in Transit?

Answer: Property in Transit – Property that is being moved from one location to another; the mode of transportation and description of route are usually defined in the policy.

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Question: What is Protective Safeguards Clause?

Answer: A protective safeguards clause is a warrant which stipulates coverage is based on an operational safety device.

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Question: What is Proximate Cause?

Answer: Proximate cause is an act from which an injury results as a natural, direct, uninterrupted consequence, without which the injury would not have occurred.

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Question: What is a Public Insurance Adjuster?

Answer: A public insurance adjuster is a person who helps an insured toward a settlement for their loss. While most adjusters work for the insurance company the public adjuster is employed by the policyholder.

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Question: What is Public Entity Insurance?

Answer: Public entity insurance is specifically designed to cover a political subdivision.

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Question: What are Punitive Damages?

Answer: Punitive damages are awarded in excess of compensatory damages to serve as a punishment for the wrongdoer for malicious acts.

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Question: What is a Pure Annuity?

Answer: In a pure annuity policy, there are set payments at specified intervals for the life of the policy holder.

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Question: What is Pure Morality Cost?

Answer: Pure morality cost is the base premium in a life insurance policy. It is calculated using the morality table which takes into account the insured’s age, sex, and amount of coverage. Other charges are added to complete the premium.

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Question: What is a Qualified Annuity?

Answer: In a qualified annuity, deposits made to a pension plan, IRA, or retirement account that are not taxed. However, withdrawals are taxed.

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Question: What is Qualified Impairment Insurance?

Answer: In health insurance, qualified impairment insurance is the rider that eliminates the policy exclusion for the impairment. Meaning, impairment qualifies for coverage.

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Question: What is a Qualified Plan?

Answer: A qualified plan is an employee benefit plans that meet IRS requirements under IRS Code Section 401(a). Contributions to the plan made by the employer are tax deductible.

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Question: What is a Qualified Retirement Plan?

Answer: A qualified retirement plan is one that qualifies under IRS federal tax regulations. Taxes on the plan are deferred until retirement and distribution of payments. Employer contributions to the plan are tax deductible.

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Question: What is a Quote?

Answer: A quote is a price given to a party who is seeking insurance coverage. This price should accurately reflect the agent’s or company’s best approximation of what the coverage will actually cost the insured.

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