Glossary

Guaranteed renewable refers to a provision in a life or disability policy that requires the insurer to renew the policy on its anniversary. The premium can usually be changed if the change applies to the entire class of insureds covered by the policy.

Guaranteed replacement cost is a property insurance valuation option found in some homeowners policies. The policy pays the full cost of replacing the home even if this amount exceeds the policy limits. This valuation method fully indemnifies the insured without any depreciation and without a maximum reconstruction payment. The provision helps the insured avoid being underinsured in the event of a total loss. An important caveat typically applies to this provision—the homeowner must allow the insurer to set the replacement cost and automatically increase it as needed. Note that guaranteed replacement cost coverage approaches can vary by state and are not available in every state or from every insurer.

A guaranty agreement is a two-party contract in which the first party agrees to perform a stipulated action in the event that a second party fails to perform. Unlike a performance bond, which is a three-party contract purchased by the principal for the obligee's benefit, a guaranty agreement is a two-party agreement between the guarantor and the obligee and is separate from the agreement between the obligee and the principal. A guarantor is only required to complete performance after the obligee has made every reasonable and legal effort to force the principal's performance.

A guaranty fund is established by law in every state. Guaranty funds are maintained by a state's insurance commissioner to protect policyholders in the event that an insurer becomes insolvent or is unable to meet its financial obligations. The funds are usually financed by assessments against all property and liability insurers regulated by a state.

A guardian ad litem is an individual appointed by a court to represent the interests of a minor during legal proceedings.

Guertin Laws are the nonforfeiture laws in life insurance that have been standard in all states since 1948. These laws require that a paid-up nonforfeiture benefit (e.g., paid-up term life insurance) be provided for every whole life policy that lapses because of nonpayment of premium. These laws also require that a cash surrender value be provided if the policy has been in force 3 years or more.

Guests' Property (premises) was an Insurance Services Office, Inc. (ISO), crime form covering guests' property located anywhere within the insured's premises or outside the premises in the insured's possession. This coverage is now provided by the Guests' Property (CR 04 11) endorsement to an ISO commercial crime policy.

Guests' Property (safe deposit box) was an Insurance Services Office, Inc. (ISO), crime form covering the insured's legal liability arising out of damage to or loss of property of guests of the insured while in a safe-deposit box in the insured's business premises. This coverage is now provided by the Guests' Property (CR 04 11) endorsement to an ISO commercial crime policy.

Guest statutes concern laws governing the rights of guests to sue a host-driver. Some guest statutes prohibit all nonpaying guests from suing for damages arising out of ordinary negligence; other statutes preclude only those guests related to the owner or operator.

A guest voluntary settlement is an aircraft liability insurance policy additional coverage that provides a specified payment to a passenger who has suffered certain types of injuries, such as the loss of an eye, hand, or foot as a result of an aircraft accident. Coverage applies on a no-fault basis, and the passenger must relinquish the right to sue the insured to receive payment.