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DAILY REPORT OR JUST DAILY

This is usually a carbon copy of the declaration sheet and any endorsements the policy-writing Agent sends to this company after a policy has been issued.

DAMAGES

Cost of compensating those who suffer bodily injury or property damage from an accident.

DATE OF ISSUE

The date stated in a policy as the date on which the contract was issued by the insurer. This is not necessarily the effective date of the policy.

D/B/A

Doing Business As. Fictitious name under which the individual or partnership (and sometimes the corporation) is legally conducting business.

DEAD BOLT

An auxiliary lock operated independently of the ordinary spring mortise lock, the bolt of which cannot be moved except by the use of a key or an inside knob. A double cylinder dead bolt is one that can be operated only by a key on either side of the door.

DEATH RULE

For insurance purposes, it's the proportion of persons in each age group who die within a year. It's usually expressed as so many deaths per thousand.

DEBRIS REMOVAL

A clause often added to the policy under which the Company assumes liability for the removal of debris resulting from damage to the property covered by the peril insured against.

DECLARATIONS

Statements made by the applicant relating to the risk. In casualty insurance, the declarations are frequently made a part of the policy.

DECLINATION

Rejection of an application for insurance by the insurer.

DEDUCTIBLE

The portion of an insured loss to be borne by the insured before he/she is entitled to recovery from the insurer.

DEDUCTIBLE CLAUSE

A clause which provides that the insured will pay his/her own losses below a specified amount per loss (as with $250 deductible collision on automobiles) or that he/she will pay a certain percentage of every loss (as with 80/20 automobile collision).

DEFAMATION

A form of misrepresentation. Many state laws provide penalties for verbal or printed circulation of materials calculated to injure any insurance company's business or reputation, or for the abetting of such acts. Also see Twisting.

DEFENDANT

The person against whom a legal action or suit is instituted. In some types of cases, the word "respondent" is used in the same sense.

DEFERRED ANNUITY

An annuity contract which provides for the postponement of the commencement of an annuity until after a specified period or until the annuitant attains a specified age. Deferred annuities may be purchased either on the single premium or annual premium basis. Deferred annuities are usually known as "retirement annuities."

DELAY CLAUSE

Stipulation in a life contract that the primary beneficiary must survive the insured for a specified period in order to receive the proceeds of the policy.

DEMOLITION CLAUSE

Used to insure against loss resulting from laws or ordinances regulating construction or repair. Requires additional premium.

DEPENDENCY PERIOD INCOME

One of the basic uses for life insurance. Income for the family during the years until the youngest child reaches maturity.

DEPENDENT (GROUP)

The spouse and children - 14 days to 19 years - of an insured employee, or children up to 23, if single, attending college and dependent on the employee for support.

DEPOSIT PREMIUM (DEP. PERM.)

That premium paid at the inception of the policy based on known or expected exposures. Premium is adjusted following an audit, to reflect the actual exposures during the policy period.

DEPOSIT TERM

Term insurance with a modest endowment feature. It is normally sold for ten-year terms with a higher first-year premium than for subsequent years. If the policy lapses, the insured forfeits his or her "deposit" and receives no refund.

DEPRECIATION

The decline in value of property due to age, use, wear and tear, etc. Depreciation is a very important item in the adjusting of property losses.

DIRECT LOSS

Loss of, or damage to, the primary subject of the insurance agreement which is the immediate result of a hazard insured against. It is frequently very difficult-to determine whether a loss is direct or consequential.

DIRECT WRITING CARRIER

An insurance carrier whose business is written by company employees as distinguished from an agency company whose business is written by insurance agents.

DISABILITY INCOME

A disability benefit provided by a specific health insurance contract which indemnities for loss of time in event of sickness or accident. Also, under certain life insurance contracts, a disability income can be provided for under a rider in the event of total and permanent disability of the insured.

DISABILITY INSURANCE

Pays losses due to accident or sickness.

DISABILITY PROVISION

A provision in many policies covering the term and benefits provided in event the insured becomes disabled.

DISABILITY, TOTAL

In accident and health insurance, a condition which wholly, necessarily and continuously prevents an insured from performing any and every duty pertaining to his/her occupation.

DISCOVERY PERIOD

A term used in the bonding business. An employee might misappropriate money during the term of a fidelity bond but the employer might not discover this until several months after the termination of the bond. Bonds usually provide a definite period of time after their expiration during which the employer may discover dishonest acts committed while the bond was in force.

DISCRIMINATION

A difference in treatment, especially an unfair difference such as charging one person more than another for the same service under the same circumstances. This is largely prohibited in insurance.

DISTRIBUTION CLAUSE

When blanket insurance is written to cover several locations, the policy is usually endorsed to provide that the insurance available at each location is proportionate to the value of the entire property insured.

DISTRICT MANAGER

Formerly known as District Agent, the District Manager represents the Exchanges in a comparatively large territory. He/She appoints, trains and assists local agents, and keeps records of the Exchanges' business in his/her territory.

DIVIDED COVERAGE

Insuring the same risk in two or more companies. In burglary insurance, "divided coverage" means separating the property into different groups, such as jewelry, watches, precious stones and articles of gold silver and fur on the one hand, and all other personal property on the other hand.

DIVIDEND

In insurance, this means a refund to the policyholder of that portion of their premium which is not needed to pay their share of the losses and expenses incurred during the policy period. Dividends are paid by mutual, participating stock companies and sometimes by reciprocals.

DIVIDEND [LIFE]

A dividend on participating life insurance contracts is the refund of that part of the premium paid at the beginning of the year which still remains after the company has set aside the necessary reserve and made deductions for claims and expenses. The dividend may also include a share in the company's investment, mortality, and operating profits.

DIVIDEND ADDITIONS

Participating policies provide that policy dividends may be used as single premiums at the insured's attained age to purchase paid-up insurance as additions to the amount of insurance specified on the face of the contract. See Paid-Up Additions.

DIVISION AGENCY MANAGER

A Company employee who represents management in the field. He has authority to appoint and cancel District Managers. Their primary duty is to stimulate sales, but they also have the responsibilities of selective underwriting, proper settlement of claims, good service to policyholders, and accuracy of District Managers' records.

D.O.C.

See Drive Other Car Coverage.

DOMESTIC INSURANCE COMPANY

A Company organized under the law of the State in which it is doing business.

D.O.T.

Department of Transportation. See Interstate Commerce Commission.

DOT MATRIX

The type of printing from a printer. An array (or Matrix) of tiny pins which strike an inked ribbon to form each character. These patterns of dots form readable characters and symbols.

DOUBLE INDEMNITY

See Accidental Death Benefit.

DOUBLE PROTECTION (TRIPLE PROTECTION, ETC.)

A policy whose base comprises a permanent form of insurance, with the addition of temporary insurance which doubles or triples the face amount. This is a special policy form, in which the temporary insurance portion usually expires at the insured's age 60 or 65.

DRAFT

An order directing the payment of money subject to approval by the payor when presented for payment. Most often used for payment of insurance losses.

DRIVE-AWAY

A car driven under its own power from an automobile factory or assembly plant to a dealer for resale.

DRIVE OTHER CAR COVERAGE

A coverage that may be added to an automobile policy while the individuals named in the endorsement are driving cars not owned by the individuals and not named in the policy.

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EARNED PREMIUM

Insurance premiums are usually payable in advance. The earned premium at any time is the amount due to the Exchange for the protection it has already provided.

EASEMENT

An acquired privilege or right which an owner of land has, by virtue of their ownership, use of the land of another.

EDUCATIONAL INSURANCE

Insurance proceeds arranged to provide a child with a given income during its educational period.

EFFECTIVE DATE

The date upon which the protection afforded by the policy starts.

ELECTIVE BENEFITS

A term used chiefly in disability insurance. The insured may elect to take a lump sum in lieu of any weekly payments for certain specified disabilities.

ELIMINATION PERIOD

The time interval between the issue date of a health insurance contract and the date when coverage of loss due to sickness is effective. (Sometimes used interchangeably with Waiting Period.)

EMBEZZLEMENT

The unlawful taking by a person of money or property entrusted to his/her care or lawfully placed in his/her possession. Taking with the intention of depriving the lawful owner.

EMERGENCY FUND

One of the basic uses for life insurance. A reserve death benefit fund provided by the insured to protect his or her family against sudden, large, unbudgeted expenses such as accidents, operations, etc. The increasing loan values of life insurance policies also constitute, and often are referred to as, an emergency fund for the policy owner while the insured is living.

EMPLOYERS' LIABILITY

Under common law, an employer had strong defenses if he/she were sued by an injured employee, such as assumption of the risk and the fellow servant doctrine, whereby employees were deprived of compensation for their injuries. Under statutory employers' liability laws, these defenses are usually abrogated.

ENCUMBRANCE

Any outside interest in property, such as a mortgagee, conditional sales contract or mechanic's lien.

ENDORSEMENT

A supplementary agreement attached to an insurance policy for the purpose of making some change in the policy. An endorsement supersedes the terms of the policy.

ENDOWMENT

A life insurance contract which provides for the payment of the face amount at the end of a fixed period, or at a specified age of the insured, or at the death of the insured before the end of the stated period.

ENGINEER

A Company employee trained in the technicalities of commercial insurance such as Fire, Workers' Compensation, Comprehensive Liability, Commercial Auto, etc., with the major purpose of loss prevention, rating and obtaining underwriting information.

ENGINEER [COMMERCIAL]

See "Loss Control Specialist."

ENJOIN

To prohibit or restrain by a judicial order.

EQUIFAX

Formerly known as Retail Credit Company. Widely used to obtain information on applicants for underwriting purposes and sometimes on claimants. Their reports are known as Retail Credit Reports.

EQUIPMENT

As used in automobile insurance, this means those things which, though not necessarily essential, are useful or convenient in the operation of the car, or are ornamental. It includes such things as an antenna, fog lamps, spare tires, hubcaps, jacks and so on.

EQUITY

(1) A branch of law designed to correct the injustice sometimes inflicted by common law. (2) The actual value of a piece of property less the amount of any encumbrances on it.

EQUITY LINKED

Amount of insurance varies according to market value of equity investments. See Variable Life Insurance.

EQUITY RATING

A form of arbitrary rating determination which is used for competitive purposes. In reality, a rate cutting device.

ERRORS AND OMISSIONS

The clause in a reinsurance treaty which stipulates that in the event of inadvertent error or omission, the reinsurer shall not be prejudiced in the fulfillment of the agreement, provided that any error or omission shall be corrected as soon as discovered.

ERRORS AND OMISSIONS INSURANCE

A form of insurance that indemnities the Agent for any loss sustained because of an error or oversight on his or her part.

ESTATE

A person's property, fortunes and possessions.

ESTOP

To prevent, stop, estoppel. Conduct or behavior of a sort which stops (prevents) the company from asserting a right which it would otherwise have had.

EVIDENCE OF INSURABILITY

Any statement or proof of a person's physical condition, occupation, etc., affecting the acceptance of his or her application for insurance.

EXAMINER

A physician authorized by the medical director of a life insurance company to make medical examinations. Persons assigned by the insurance commissioner to audit the affairs of the insurance company also are called examiners.

EXCESS [LIFE] (Uniflex)

For commissions purposes, every eligible premium is broken into two parts, (1) yearly premiums less than or equal to the target premium, and (2) the "excess." The excess equals the total premium received in a policy year less the specified target premium.

EXCESS INSURANCE

Coverage which becomes available to the insured only above a stipulated amount of loss, or only after any other applicable insurance has been exhausted.

EXCESS INTEREST [LIFE]

The difference between the rate of interest the company guarantees to pay on proceeds left under settlement options and the interest actually allowed on such funds by the company.

EXCESS LIMIT

A term commonly used synonymously with increased limits.

EXCESS OF LOSS TREATY

This is a coverage for the whole or a for a specified proportion of a loss over a deductible (Which may be a specified figure or a computation). Excess of loss is the normal form of reinsurance of liability risks, but it also has special applications in all branches. It should never be confused with surplus, which in reinsurance always refers to a pro rata form of coverage.

EXCLUSION

A condition of the policy by which the Exchange excludes coverage under certain stated circumstances.

EXECUTOR

The person or corporation appointed by the court to carry into effect, or execute, the provisions of a will. The court will appoint the person named in the will as executor, provided that person consents and qualifies. See Administrator.

EXECUTORY

A characteristic of a life insurance contract which contains legally enforceable promises.

EXPECTED MORTALITY

The number of deaths which theoretically should occur among a group of insured persons during a given period according to the mortality table in use. Normally, a lower mortality rate is anticipated and generally experienced.

EXPENSE CONSTANT

A flat amount sometimes imposed in workers' compensation insurance if the estimated premium is less than the specified amount. Intended to pay the cost of issuing and servicing a small policy.

EXPENSE LOADING

That portion of the manual rate which is intended to cover expenses incident to the business of insurance, such as sales expenses, taxes, general administration salaries, underwriting profit, etc.

EXPENSE OF MANAGEMENT

See Loading.

EXPENSE RATIO

The percentage of expenses of premiums. For company budgetary purposes, the term expense ratio refers to the ratio of expenses paid to premiums written. Other types of expense ratios are used, such as expenses paid to net premiums written: Expenses incurred to premiums earned.

EXPERIENCE

This refers to the loss ratio status of a particular risk, or of a particular coverage, or of a particular carrier, etc. over a specified period of time.

EXPERIENCE MODIFICATION

A percentage increase or reduction in rates produced by application of the experience rating plan.

EXPERIENCE RATING

A special rate modification for insurance, in which a deviation from the manual rate is made because of the incurred past experience record of the individual risk involved.

EXPIRATION DATE

The date on which coverage ceases. The exact time is usually 12:01 a.m. on liability and automobile material damage policies, and twelve noon on fire and burglary policies. It is a good idea to check the existing policy on this point.

EXPIRE

To "expire a policy" is to allow a policy to run until the expiration date and then retire from the risk by not renewing.

EXPIRY

Termination of a Term insurance policy at the end of its period of coverage.

EXPOSURE

(1) In fire insurance, this means the surrounding property. Even a fireproof building might be an undesirable risk if it had a lumber yard on one side and a paint factory on the other. (2) In casualty insurance, it means the amount of risk created by the subject matter of the insurance. Thus, in rating a store for a public liability policy, we say that the unit of exposure is 100 square feet. The rate, applied to each 100 square foot unit, gives the premium.

EXTENDED COVERAGE ENDORSEMENT

An endorsement added to the standard fire policy giving protection against the perils: Windstorm and hail, explosion, riot, civil commotion, aircraft, vehicles and smoke.

EXTENDED REPORTING PERIOD

Also known as a "tail"; a period of time, with or without limit, which extends the CGL "claims made" policy's coverage to claims first made after the policy period for injury or damage that occurred before termination of the policy (but now before the Retroactive Date).

EXTENDED TERM INSURANCE

The non-forfeiture option which provides that the cash surrender value of a policy may be used as a net single premium at the attained age of the insured to purchase Term insurance for the face amount of the policy, less indebtedness, for as long a period as possible, but not longer than the term of the original policy. It is now the usual practice for companies to deduct any policy indebtedness-from the cash surrender value and then to use the net equity to purchase-Term insurance for the full amount of the policy including dividend additions, less indebtedness, for the maximum period possible, but not exceeding the term of the original policy. If the cash value of an Endowment policy is more than sufficient to purchase Extended Term insurance for the remainder of the endowment period, the excess cash value is used to buy pure endowment payable at the maturity of the policy.

EXTRA EXPENSE COVERAGE

This protects the policyholder against the extra expense that may be involved in carrying on his/her business after the occurrence of a loss. For example, if a newspaper plant was damaged by fire, the publishing company might have to get their paper published by a rival plant until their own could be restored. Thus, they could carry on their business but at extra expense to themselves.

EXTRA LIABILITY

See Excess Limits.

EXTRA LIVING EXPENSE INSURANCE

See "Additional Living Expense Clause."

EXTRA PREMIUM

The amount charged in addition to the regular rate to cover an extra hazard or special risk.