Source: https://www.millerandzois.com/definitions.html
Timestamp: 2019-04-23 08:01:57+00:00

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Below is a glossary defining common insurance terms. Some are dictionary definitions of insurance terms that would be the same in Maryland as in any other jurisdiction. Many of the definitions, particularly the auto insurance terms, are designed for Maryland lawyers and personal injury victims dealing with claims or litigation. These car insurance terms are often accompanied by the relevant Maryland case law and applicable Maryland statutes.
Because one of our attorneys, Ron Miller, teaches Maryland Insurance Law at the University of Baltimore School of Law, other terms are included beyond the automobile and medical and health insurance terms that would be helpful to Maryland lawyers or personal injury victims. Accordingly, this glossary of insurance terms includes life insurance terms, commercial insurance terms, and homeowner and title insurance.
Because we have noticed an increase in traffic to the insurance glossary portion of our site, we have been working vigorously of late to continue to make additions and provide more detailed information on the terms. If you believe that additional insurance terms you would like us to define, fill out a contact form.
This glossary is mainly focused on insurance related issues. If you are looking for an explanation of major personal injury definitions, you can find them here.
Accelerated death benefits - a life insurance policy where policy proceeds are paid before to death if the insured is terminally ill. The insured has the option of getting his or her death benefit while still alive, and presumably during a time of need, instead of having the money paid out only after death to a beneficiary or the estate. Principal Mut. Life Ins. Co. v. United States , 26 Cl. Ct. 616 (1992).
Accident - under Maryland law, an accident is defined as a happening; an event that takes place without one's foresight or expectation; an event which proceeds from an unknown cause, or is an unusual effect from a known cause, and therefore not expected. Fister v. Allstate Life Ins. Co., 366 Md. 201, 215 (2001). See also Occurrence.
Accidental death - coverage in the event of mortality due to an unplanned and unexpected event. Often, because accidental deaths can take a greater financial toll because they are unexpected, the benefits under a life insurance policy increase - often double - if the death is accidental.
Active malfunction - when a product, instead of bringing a benefit to the user, actually damages the user's property. An example is a wax that is applied to an automobile that damages the car.
Act of God - natural occurrence beyond human control or influence. Such acts of nature include hurricanes, earthquakes, and floods. While a blizzard is considered an act of God, driving in a blizzard is an act of the driver. Hurricane Katrina would be an example of an act of God.
Actuary - a professional trained in the mathematics of insurance and risk management. For example, GEICO has individuals who look at statistical data and analyze your driving record, where you live, your age and other risk factors, and calculated the amount of the premium that GEICO is willing to offer to you to provide automobile accident insurance.
Additional Insured or Additional Interest - A person or entity, other than the named insured or covered person, who is protected under the named insured's auto policy.
Add-ons - additional coverage to your basic policy. An example of an add-on that Miller & Zois recommends is additional PIP coverage.
Adjuster - a person employed by a property/casualty insurer to evaluate losses and settle claims.
Ambiguous - an insurance term is ambiguous is a reasonable layperson would infer two different meanings to a word or term from the context and the language used. Pacific Indem. Co. v. Interstate Fire & Cas. Co., 302 Md. 383, 389 (1985). In Maryland, the question of whether an insurance contract is ambiguous is a question for the judge.
Arbitration Clause - policy language that requires parties to arbitrate the dispute if insurance company and insured do not agree on whether the insurance company is obligated to make payment or the amount of that payment. Such a provision in a Maryland automobile insurance policy is invalid and unenforceable. Md. Insurance Code Ann. §19-509(j). Langston v. Allstate Ins. Co ., 40 Md. App. 414 (1978).
Assigned Risk - a poor risk that an insurance company is compelled to cover under state laws.
Auto insurance premium discounts - discounts offered to car drivers for such safeguards as air bags, seat belts, good driving record, anti-theft devices, multiple vehicles, etc.
Average Weekly Wage - A term used in Maryland Workers Compensation scheme. It is the basis for determining weekly benefits under such laws.
Basic Limits of Liability - the lowest amounts of liability coverage that you can legally buy. The basic limits very from state to state for insurance covering personal injuries from auto accidents. In Alaska and Maine, for example, there is a minimum of $50,000 per person and $100,000 per accident of liability insurance and $25,000 in property insurance (50/100/25). Most states have much lower basic minimums. In Maryland, it is now 30/60/15.
Change in fund basis -a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in a fund held under an annuity or a guaranteed interest contract is the calendar year statutory valuation interest rate for the year of the change in the fund. Md. Insurance Code Ann. § 5-306.
Collision insurance - coverage which that pays the fair market value for damage to the policyholder's car caused by an automobile accident.
Comprehensive major medical insurance - a health insurance policy that provides the protection offered by both a basic and major medical health insurance policy.
Co-payment - the portion of a medical bill or another bill that a patient or insured pays.
Earned premium - that part of the premium applicable to the expired part of the policy period, including the short-rate charge on cancellation.
Elimination Period - This is the period between the date the disability commences and the beginning of the benefit payment period. It is the period during which an employee must be disabled before payment of benefits begins.
Evidence of Insurability - Group disability coverage is typically sold as "guaranteed issue" which means that evidence of insurability is not required. However, under certain circumstances (e.g., late enrollment or a high benefit maximum), an employee must provide medical or financial information as proof to the insurance company that he or she is insurable.
Fellow employee exclusion - clause in automobile insurance policies that states that auto insurance the there is no coverage for injuries to fellow employees of the insured arising out of her course of employment. This exclusion is enforceable in Maryland only up to the Basic Limits of Liability inMaryland under the Transportation Code § 17-103(b). Larimore v. American Ins. Co. , 314 Md. 617 (1989).
FR-19 - when you register or renew vehicle registration in Maryland , you must sign an insurance certification, called an FR-19, which acknowledges that the minimum vehicle liability insurance will be maintained throughout the registration period and the vehicle will not be driven without insurance. Called an SR-22 in many other jurisdictions.
Garaging Location - ZIP code where vehicle is parked or garaged when not in use.
Health insurance - protection against the costs of hospital and medical care or lost income arising from an illness or injury. Sometimes called Accident of Sickness Insurance, Accident and Health Insurance, or Disability Insurance.
Health maintenance organization (HMO) - an organization that provides health care for a monthly payment set in advance. In a traditional HMO, doctors and other providers are salaried employees and the facilities are owned by the organization. In recent years, however, other forms of HMOs have sprung up that contract with doctors and hospitals to care for members at set, negotiated fees. Many HMOs are hybrids, offering both kinds of care to members.
Issue year basis - a valuation basis under which the interest rate used to determine the minimum valuation standard for the entire duration of the annuity or of the guaranteed interest contract is the calendar year statutory valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed interest contract. Md. Insurance Code Ann. § 5-306.
Limit of Liability Clauses - auto insurance policies generally contain limit of liability clauses that preclude the intrapolicy "stacking" of coverages. Oarr v. GEICO , 39 Md. App. 122, 383 A.2d 1112, 1114 (1978). Stacking generally refers to plaintiffs adding all available policies together to create a larger pool from which to seek recovery for their personal injuries and/or property damage. See Md. Insurance Code Ann. §19-509(a) regarding issues related to stacking and UM coverage. No stacking in Maryland with uninsured motorist claim. Example: negligent driver has $20,000 GEICO policy. Injured party has $1,000,000 State Farm UM policy. Maximum recovery would be $1,000,000: $20,000 from GEICO, $980,000 from Allstate. The term stacking is misleading because it leads to implication of double dipping or duplication of benefits. Miller & Zois prefers the term aggregating or supplemental coverage, which is allowed in most jurisdictions, including Maryland, for PIP claims. But you cannot aggregate two PIP policies in Maryland. See Travelers Insurance Co. v. Benton, (278 Md. 542 (1976).
Maryland Automobile Insurance Fund (MAIF) - a state agency created to provide automobile liability insurance for persons rejected by at least two private insurers. See Transportation Code 17-105(a).
Medicare - a federal health care insurance program for people age 65 and over, and for people who are under 65 and disabled (often put liens on personal injury cases). For personal injury lawyers, it is often a real battle to reduce Medicare liens to enable the clients to get a meaningful recovery.
No Fault - a system in which each driver's auto insurance coverage pays for injuries and damage after an accident no matter who caused the accident. In Maryland, PIP is a form of no-fault insurance.
Non-cancellable or Non-cancellable and guaranteed renewable policy - a policy which the insured has the right to continue in force by the timely payment of premiums set forth in the policy to a specified age, (usually age 50) during which period the insurer has no night to make unilaterally any change in any provision of the policy while the policy is in force.
Personal injury protection (PIP) - coverage present in no-fault states which pays medical, loss of income, death and/or disability and loss of services incurred as a result of an automobile accident. In Maryland, all vehicles carry PIP insurance absent an express waiver from the insured.
Secondary Driver - a driver listed on your automobile insurance policy who's insured for driving an insured vehicle. The secondary driver is not a car's primary driver.
Subrogation - when an insurance company pays for a loss caused by another driver or other negligent party, the injured party's insurance company may have the right by law or policy provision to recover an amount of the loss from the other person or their insurer.
Underwriting - a process that evaluates an applicant and their automobile(s) against pre-established criteria for insurability to determine whether the applicant will be rejected or accepted for coverage and whether at standard or modified rates.
Uninsured motorist coverage - endorsement to a personal auto policy that covers an insured involving personal injury cases in Maryland or property damage with a driver who does not have liability insurance. Maryland law provides that every policy of motor vehicle liability sold in the state of Maryland must have uninsured motorist coverage. Md. Insurance Code Ann. § 19-505. There are, however, many exceptions including, motorcycles, taxicabs, state owned vehicles, and off road vehicles.
Waiting Period - in order to become eligible for coverage under the policy, an individual must satisfy a certain number of continuous days of service as an active, full-time employee. This is known as the waiting period.
Waiver of Premium - When an individual becomes disabled and eligible for benefits, no further disability premium payments are required as long as benefits are being paid out.

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