This glossary is provided to assist you with commonly used insurance
terms and some terms that we use on this Web site. As always, you should
refer to your policy or consult your agent or broker for specific questions
about how your particular policy works.
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| Actual Cash Value |
Generally, an amount equivalent to the replacement
cost of lost or damaged property at the time of the loss, less
depreciation.
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| Additional Insured |
A person or entity other than the named insured, which is specifically
named in the policy who receives the coverage under the terms of the
policy.
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| Additional Interest |
A person/entity with an insurable interest in a specific property, vehicle, or watercraft, usually because that party has provided financing for the property/vehicle/watercraft.
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| Additional Structures |
Buildings and other structure types located on the property of the
primary insured dwelling that are not attached to that dwelling and
are separated by clear space.
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| Adjuster |
A person who investigates and handles losses on behalf of an insurance
carrier.
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| Agent |
One who solicits, negotiates or effects contracts of insurance.
The term agent generally refers to one who represents an insurer.
His right to exercise various functions, his authority, and his obligations
and the obligations of the insurer to the agent, are subject to the
terms of the agency contract with the insurer, to statutory law and
to common law.
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| Agreed Value |
Under a Chubb Masterpiece® policy, Chubb and the
policyholder can agree on a value of a vehicle and lock it in for
a full year. That's the exact amount the insured receives if the vehicle
is stolen or totally destroyed in a covered loss.
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| All-risk Coverage |
Coverage by an insurance contract that promises to cover losses
covered by any peril except those specifically excluded in the policy.
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| Appraisal |
An evaluation of property made either to help an insured ascertain
the appropriate amount of insurance to be written or to determine
the amount of loss to be paid.
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| B |
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| Blanket Coverage |
An insured can select a total or "blanket" amount of coverage
for certain categories of items, such as jewelry, silver or fine arts,
rather than having to list each item separately. There is generally
a per-item limit of coverage within the blanket amount. For example,
if an insured has $150,000 in blanket coverage for jewelry with a
$10,000 per-item limit, the most she would receive for the total loss
of one item of jewelry is $10,000.
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| Breakage Coverage (Valuable Articles) |
Generally, a homeowners policy restricts or excludes coverage for
losses resulting from breakage of valuable articles.
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| Broker |
One who solicits, negotiates or effects contracts of insurance.
The term broker generally refers to one who represents an insured.
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| C |
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| Cancellation |
The discontinuance of an insurance policy before its normal expiration
date, either by the insured or the company.
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| Central Station Monitoring System (Burglar
and Fire Detection) |
In a Central Station system, remote detection devices installed
in houses and businesses automatically transmit alarm signals to a
central office. There, trained operators monitor the system 24 hours
a day, record signals and take appropriate action, such as referring
signals to the police or fire authorities.
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| City Home |
Chubb has unique policies, City
Home House and City Home Contents coverages, in certain states
to provide homeowners coverage for owner-occupied, one-to-three-family
masonry row houses. These policies are tailored to the unique needs
of these residences.
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| Claim |
A demand for the actual or alleged amount of loss or damage under
a policy.
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| Claimant |
A person making a claim under an insurance policy.
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| Collector Vehicle |
Although this varies by carrier, Chubb typically categorizes a collector
vehicle as an automobile that is at least 25 years old, is an
occasional-use vehicle used for hobby/collecting purposes rather than
general transportation, and is only driven by someone 25 years of
age or greater.
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| Comprehensive Coverage |
A coverage also known as Other than Collision coverage, this part
of an automobile policy responds when something other than collision
causes physical damage to a vehicle.
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| Compulsory Insurance |
Any form of insurance that is required by law.
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| Condominium |
A condominium is a complex
or building with common areas and facilities that are owned by its
residents. Each unit owner has a separate title and the exclusive
ownership of a particular unit.
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| Co-operative |
A co-operative is housing
unit in a complex owned by a corporation, in which the residents of
the building are the stockholders. The corporation owns the title
to the real estate, while the individual unit owners own stock in
the corporation.
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| Coverage |
The scope of the protection provided under a contract
of insurance.
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| Covered Loss |
The occurrence of the event for which insurance pays.
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| D |
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| Declarations page |
Statements in an insurance contract that provide a summary of the
risk to be insured, a description of the property or life to be insured,
and the limits of insurance.
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| Deductible |
A provision in an insurance policy stating that the first given
number of dollars or percentage of expense will not be paid by the
insurer.
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| Dwelling |
An insurance term for a building that is insured as a residence.
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| E |
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| Effective date |
The date on which the coverage of a new or renewal policy goes into
effect.
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| Endorsement |
Language attached to an insurance policy that changes the terms
or conditions of the policy.
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| Excess (or Umbrella) Policy |
Excess liability coverage (often called umbrella) provides an insured
with an additional layer of liability coverage limits in addition
to the limits provided under a homeowners or vehicle liability policy.
Under Chubb Excess
Liability Coverage, we also offer the option of an additional
layer of Uninsured/Underinsured Motorist coverage.
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| Exclusions |
Causes, conditions or property listed in the policy that are not
covered, and for which no benefits are payable.
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| Expiration date |
The date on which a policy ends.
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| Extended Replacement Cost |
For a better understanding of Extended Replacement Cost under a
Chubb
Masterpiece® homeowners policy, please refer
to the page about Our
Home Appraisal Service.
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| H |
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| Homeowners Policy |
A type of insurance policy that provides homeowners with a broad
range of property and personal liability coverages.
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| I |
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| Inception date |
The date at which a policy begins or becomes active.
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| Insurable Interest |
Any interest in a subject of insurance or any legal relation to
it of such a nature that a certain happening might cause monetary
loss to the insured.
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| Insured |
A person who meets the definition of insured under an insurance
policy. This means that someone who is not named in the policy may
be entitled to coverage if he fits the status or circumstances described
in the policy's definition of insured.
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| In-vault |
A term referring to items that are usually stored in a bank vault
and covered under a valuable articles policy. By storing valuables
in a vault, the insured is generally entitled to a reduced premium.
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| Itemized Coverage |
Coverage for items that are listed individually for an amount agreed
upon when the policy is purchased. In the event of a total loss, the
insured will receive the amount agreed upon.
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| L |
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| Lessee |
The person to whom a lease is granted.
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| Lessor |
The person granting a lease.
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| Liability |
Broadly, any legally enforceable obligation. The term is most commonly
used to describe an obligation to pay damages.
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| Liability Insurance |
Insurance that pays on behalf of an insured for loss arising out
of his or her responsibility to others imposed by law or assumed by
contract arising out of losses covered under the policy.
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| Loss of Use |
Loss of use refers to the loss an insured incurs as a result of
not being able to use his property. Homeowners and auto policies generally
provide coverage for certain types of loss of use such as additional
living expenses and rental car expenses.
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| M |
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| Masterpiece® |
Chubb Personal Insurance’s registered brand of products offered
in various parts of the world.
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| Medical Payments |
Insurance coverage that pays medical or funeral expenses of covered
persons without regard to legal liability. It is one of the standard
coverages provided by homeowners and auto policies.
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| N |
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| Named Insured |
Any person or entity specially designated by name as the insured(s)
in a policy as distinguished from others who, though unnamed, are
covered under some circumstances.
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| Named Peril Policies |
Named peril policies specify what causes of loss are insured against,
as opposed to all-risk coverage.
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| Negligence |
Failure to use that degree of care that an ordinary person of reasonable
prudence would use under the given or similar circumstances. A person
may be negligent by acts or omissions or both.
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| No-fault Insurance |
Insurance coverage that pays certain expenses arising from bodily
injury for certain losses without regard to legal liability or fault.
A number of states require drivers to maintain no-fault automobile
insurance to cover bodily injury resulting from automobile accidents.This
coverage also is known as personal injury protection (PIP) coverage.
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| O |
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| Other Insurance |
The existence of another contract covering the same interest and
perils.
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| Other Insurance Clause |
A provision found in practically every insurance policy that explains
how coverage will apply in the event another policy applies to the
same loss.
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| Other Structures Coverage on a Homeowners
Policy |
Generally, homeowners property coverage extends to additional
structures on the premises for an amount ranging between 10-20%
of the home's coverage amount.
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| Other Than Collision |
See Comprehensive Coverage.
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| P |
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| Payment Basis |
When a Chubb homeowners policy is purchased, the insured can choose
from a number of ways in which Chubb will pay in the event of a covered
loss. Extended Replacement Cost and Conditional
Replacement Cost are two payment bases offered at Chubb.
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| Peril |
Cause of a possible loss.
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| Personal Injury Protection (PIP) |
Personal injury protection (PIP) coverage applies to basic expenses
for an insured in states with no-fault auto insurance.
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| Personal Liability Coverage |
This coverage applies if a claim or suit is brought against an insured
for damages because of bodily injury or property damage caused by
an occurrence to which the policy applies. The insurer pays up to
the limit of liability for which the insured is liable and also provides
a defense.
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| Physical Damage Coverage |
An auto insurance term indicating coverage for physical damage to
the vehicle from such perils as collision, comprehensive, fire and
theft.
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| Premium |
The total amount paid by a policyholder in exchange for the coverage
promised under a policy.
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| Private Passenger Vehicle |
Four-wheeled motor vehicles of the private passenger, station wagon
or van type, designed for use on public highways and subject to motor
vehicle registration.
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| Property Damage |
Physical injury to, destruction of, or loss of use of tangible
property.
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| R |
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| Renewal |
The continuation in full force and effect of something that is about
to expire. With an insurance policy it is made either by the issuance
of a new policy or renewal receipt or certificate, to take effect
upon the expiration of the old policy.
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| Replacement Cost |
The cost of replacing property without deduction for depreciation.
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| S |
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| Schedule |
The list describing individual items covered under one policy.
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| Single Limit |
The liability limit that applies per occurrence to the total of
both bodily injury and property damage liability.
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| Split Limits |
The amounts of insurance that apply separately to bodily injury
and property damage.
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| Subrogation |
For insurance purposes, it is the process by which one insurance
company seeks reimbursement from another company or person for a claim
it has already paid.
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| Supplementary Payments |
Amounts payable under an insurance policy in addition to the policy's
stated limits of liability. Vehicle and homeowners liability policies
typically provide supplementary payments for the cost of certain bonds,
interest charged on judgments against the insured, loss of earnings
for attendance at hearings or trials and other reasonable expenses
incurred at the insurance company's request.
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| T |
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| Total Loss |
Property is considered totally lost when the cost to repair it exceeds
its pre-loss value.
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| U |
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| Umbrella Policy |
See Excess Policy.
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| Uninsured/Underinsured Motorists (UM/UIM)
Coverage |
Insurance that applies when an insured is involved in an accident
with a motorist who has no vehicle liability coverage or who has insufficient
liability coverage to cover the loss.
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| V |
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| Vacation Home House Coverage |
Chubb has a unique policy, Vacation
Home House Coverage, in certain states to provide homeowners coverage
for the more limited needs of a vacation home.
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| Valuable Articles |
Items such as jewelry, collectibles, fine arts and rare books which
can be specifically described and listed for an insured amount on
a Masterpiece®
Valuable Articles Coverage policy. Coverage for these items is
generally restricted under a homeowners policy.
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| Vehicle Liability Coverage |
Personal liability coverage for liability arising out of motor vehicle
accidents.
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| W |
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| Writing Company |
Chubb refers to the member insurers of the Chubb Group of Insurance
Companies. These are Chubb's writing companies. A writing company
for a particular policy can be found on the "Issued by"
line of most bills.
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