Glossary

An insurable interest is an interest by the insured person in the value of the subject of insurance, including any legal or financial relationship, that makes it appropriate for the insured to purchase or be protected by that insurance. Insurable interest usually results from property rights, contract rights, and potential legal liability.

Insurance is a contractual relationship that exists when one party (the insurer) for a consideration (the premium) agrees to reimburse another party (the insured) for loss to a specified subject (the risk) caused by designated contingencies (hazards or perils). The term "assurance," commonly used in England, is considered synonymous with "insurance."

Insurance agents errors and omissions covers any act or omission of the insured (or of any other person for whose acts or omissions the insured is legally responsible) arising out of the performance of professional services for others in the insured's capacity as an insurance agent or insurance broker.

An insurance commissioner is the head of a state's insurance department or regulatory agency.

An insurance department is a governmental entity charged with the regulation and administration of insurance laws and other responsibilities associated with insurance.

An insurance educational association creates and provides professional development and continuing education products and services for the insurance industry.

An insurance examiner is a state insurance department representative assigned to officially audit and examine insurers.

An insurance exchange is an entity providing a marketplace for insurance coverage that is generally unavailable elsewhere for unusual or nonstandard risks. Unlike insurance companies, however, insurance exchanges do not underwrite insurance coverage. Rather, they are nonprofit organizations that oversee its underwriting members or "syndicates." In this capacity, exchanges receive premiums, issue policies, handle claims, supervise underwriters, and monitor their solvency. Lloyd's of London is the world's foremost insurance exchange.

An insurance ID card is issued by an insurer, in physical or electronic format, that provides proof that an insurance policy is in effect. In auto insurance, the card generally lists the named insured, insurer, policy number, covered vehicle, and policy effective and expiration dates. When asked to by authorities, drivers may be required to present the card during a traffic stop, after an accident, when registering a vehicle, or in other situations where proof of insurance is required. An expired card does not establish current coverage.

The Insurance Information Institute (III) is an educational, fact-finding, and communications organization for the property and casualty (P&C) insurance industry. The III is supported by several hundred member insurance companies and serves as the industry's primary public relations organization.