Glossary

The collateral source rule is a procedural rule followed by courts that prohibits informing the jury that the plaintiff has received money for their injuries from other sources, such as from their employer's workers compensation policy or an insurance policy covering another defendant.

Collateral value insurance guarantees the value of property pledged as collateral for a loan. The amount of recovery under such a policy is the difference between the liquidated value of the collateral to the creditor and the outstanding loan balance at the time of liquidation. Such insurance is written primarily in connection with short-to-medium-term equipment loans.

A collectible commission is paid to an agent based on a percentage of premiums actually collected in the debit market.

The collection fee is the amount charged by a life insurance agent allowed as compensation for premium collection in lieu of commission.

A collision damage waiver (CDW) is an agreement with an auto rental company in which the renter is released from liability for collision damage to the vehicle in exchange for a fee, subject to the terms of the rental agreement or a state statute if one exists. It is not insurance but a contractual obligation subject to many restrictions.

Collision insurance is a form of automobile insurance that provides for reimbursement for loss to a covered automobile due to its colliding with another vehicle or object or the overturn of the automobile. This covers only damage to the automobile itself as "auto" is defined in the policy.

A form of combined reinsurance that provides that the reinsurer will indemnify the ceding company the amount of covered loss in excess of the specified retention, subject to a specified limit and a fixed quota share percentage of all remaining losses after deducting the excess recoveries on each risk.

Combined additional coverage (CAC) is an obsolete auto physical damage coverage term used to refer to hazards other than fire and theft (as in fire, theft, and CAC). Current terminology for coverage applicable to all of the aforementioned hazards as respects commercial auto policies is "specified causes of loss" coverage. As respects personal auto policies (PAPs), the term "other than collision" applies.

A combined ratio is the sum of two ratios, one calculated by dividing incurred losses plus loss adjustment expense (LAE) by earned premiums (the calendar year loss ratio) and the other by dividing all other expenses by either written or earned premiums (i.e., trade basis or statutory basis expense ratio). When applied to a company's overall results, the combined ratio is also referred to as the composite or statutory ratio. Used in both insurance and reinsurance, a combined ratio below 100 percent is indicative of an underwriting profit.

Auto insurance policies may have split limits or combined single limits. The combined single limit simply states a single dollar limit that applies to any combination of bodily injury and property damage liability claims, as compared to split limits where three separate dollar amounts apply to each accident: per person limit, per occurrence limit for all injured persons, and per occurrence limit for all property damage (PD) resulting from the accident.