Package Policy A combination of two or more individual policies or coverages into a single policy. A homeowners policy, for example, is a package combining property, liability and theft coverages for the homeowner.
Paid Losses The actual dollar total that has been paid on incurred losses by issuing checks or drafts to claimants.
Partial Disability An impairment that prevents the insured from performing one or more, but not all, important duties of his/her job.
Participating Insurance The life insurance, sold by some life companies, on which dividends may be payable to policy owners. The amount and timing of the dividend payments are determined by the company board of directors.
Particular Average In ocean marine insurance, a concept providing that, where a portion of vessel or cargo is jettisoned to save the entire venture from peril at sea, the resulting loss is borne entirely by that individual owning the property that is damaged or sacrificed. No other interests contribute to payment of the loss. (Distinct from General Average.)
Pay-at-the-Pump A system proposed in the 1990s in which auto insurance premiums would be paid to state governments through a per-gallon surcharge on gasoline.
Peril The cause of a possible loss, such as fire, windstorm, theft, explosion or riot.
Permanent Insurance The type of life insurance that develops cash value and includes whole life, endowment, universal life and variable life insurance.
Persistency An insurance term used to refer to the probability of insurance remaining in force.
Personal Articles Floater A form of coverage designed to meet the needs for insurance on property of a movable nature. The coverage usually protects against all physical loss, subject to special exclusions and conditions. Examples of property covered include jewelry, furs, silverware and fine arts.
Personal Injury Protection Automobile Insurance (PIP) First-party coverage in no-fault states that usually pays for medical expenses, loss of income and certain other expenses resulting from an auto accident. Coverage
Personal Lines Types of insurance written for individuals or families, rather than for businesses.
Personal Property This type of property is usually movable and easily transportable. On the other hand, real property generally is considered to be immovable, such as land and things affixed to it. A rule of thumb definition for personal property is
Physical Hazard This refers to the material, structural or operational features of the risk itself, apart from the persons owning or managing it. Electrical wiring, building construction and type of heating system are examples of physical hazards.
Physical Loss Form This property coverage protects against loss from risk of physical loss to buildings except as limited or excluded in the form.
Plan A facility, operating under a government-insurance industry cooperative program, to make fire insurance and other forms of property insurance readily available to persons who have difficulty obtaining such coverage.
Point of Service (POS) Plan An HMO that offers an indemnity-type option. The primary care doctors in a POS plan make referrals to other providers in the plan. However, members can refer themselves outside the plan and still get some coverage as well.
Policies-in-Force Policies written and recorded on the books of the carrier which are unexpired as of a given date. Usually applies to property and liability insurance.
Policy The name generally used to mean the written contract of insurance.
Policy Loan The borrowing against a life insurance policy
Policyholder One who owns an insurance policy. A mortgagee often is issued a copy of an insurance policy or certificate of insurance at the request of the insured, but it is not a policyholder.
Policyholders The sum an insurance company has remaining after all liabilities are deducted from all assets. Sums such as paid-in capital and special voluntary reserves are also included in this term. This surplus is one form of financial protection to policyholders in the event a company suffers unexpected or catastrophic losses.
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.
Pool An organization of insurers or reinsurers through which particular types of risks are underwritten with premiums, losses and expenses shared in agreed ratios.
Pre-Existing Condition A physical condition that existed prior to the issuance of an insurance policy.
Premises The building, other structures and land where the insurance protection is applicable. It is usually described and defined in the property and casualty policy.
Premium The amount of money charged a policyholder for an insurance policy. (Also see Direct Premiums Written, Earned Premium, Net Premiums Written, Unearned Premium.)
Premium Auditor A person who examines a liability insurance policyholder
Premium Life Insurance Insurance for which the cost is distributed evenly over the period during which premiums are paid. The premium remains the same from year to year and is more than the actual cost of protection in the earlier years of the policy and less than the actual cost in the later years. The excess paid in the early years builds up a reserve which helps meet the costs in later years.
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.
Principal In suretyship, the party whose honesty or performance is guaranteed.
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 Mortgage Insurance See Mortgage Insurance.
Private Placement Securities that are not registered with the Securities and Exchange Commission and are sold directly to investors.
Producer Any person directly involved in the sale of insurance.
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
Product Liability Insurance Protects manufacturers
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 Damage Liability Insurance Protection against loss from legal liability for damage to the property of another.
Property Insurance Provides financial protection against loss or damage to the insured
Property/Casualty Insurance Covers damage to or loss of policyholders
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
Protection Amount The face amount of a life insurance policy, or amount of money that will be paid to a beneficiary upon the death of an insured
Proximate Cause The dominating cause of loss or damage; an unbroken chain of events between the occurrence of an insured peril and damage to property. As an illustration, weather damage occurring from fire-fighting activities is covered under the fire policy because fire was the proximate cause of the loss.
Public Liability Insurance A broad term meaning insurance to cover professional and commercial risks against liability exposures other than those involving employees or arising out of ownership or use of autos or airplanes.
Purchasing Group An entity that offers insurance to groups of similar businesses with similar exposures to risk.
