We know all the lingo can be overwhelming, so let’s break it down, one definition at a time:

**The terms are general and for educational purposes only. Always refer to your policy for the definitions associated with your coverage.


In common usage: an unforeseen and unplanned event or circumstances; or an unfortunate event resulting especially from carelessness or ignorance (Webster’s Dictionary).

In insurance parlance, a term that is included within the insuring agreement of many types of liability insurance. In a few cases, the word “accident” is a defined term within the policy. In most cases, however, common law becomes the determinant of what is, or is not, an accident for purposes of triggering coverage.

Accidental Death

Death resulting directly and solely from (1) an accidental injury visible on the surface of the body or disclosed by an autopsy; (2) a disease or infection resulting directly from an accidental injury as described, beginning within 30 days after the date of the injury; or (3) an accidental drowning.

Accidental Death and Dismemberment (AD&D)

A type of coverage that essentially provides coverage when death is caused by an accident and defined dismemberment benefits.


Compensation for loss and other services provided by insurers under terms of insurance contracts.


Notice to an insurer that under the terms of a policy, a loss may be covered.


The first or third party. That is any person who asserts right of recovery.


Used synonymously with “insurance” or “protection.”


Certain causes and conditions, listed in the policy, which are not covered.

Expiration Date

The date on which the policy ends.


An amount the insurer will deduct from the loss before paying up to its policy limits. Most property insurance policies contain a per-occurrence deductible provision that stipulates that the deductible amount specified in the policy declarations will be subtracted from each covered loss in determining the amount of the insured’s loss recovery. Usually, the amount of the deductible is not subtracted from policy limits.


In accident and health insurance policies, the definition encompasses loss of limbs or sight. A fixed benefit is paid to insureds who suffer certain types of dismemberment under these policies. The policy will typically pay the principal sum for loss of both hands, both feet, the sight of both eyes, one hand and one foot, or the sight of one eye and one hand or foot. For loss of any one, it will usually pay a percentage (e.g., 50 percent) of the principal sum.

Hospital Income Insurance

Insurance providing a stated payment during the hospitalization of the insured. The benefits payable are not based on the actual expenses incurred.


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.” 


The person protected under an insurance contract.

Out-of-Pocket Costs

The expenses for medical care that are not reimbursed by the insurance. Examples of out-of-pocket expenses not covered by a health insurance plan include deductibles, coinsurance, and co-payments.


A written contract of insurance between the insurer and the policyholder. It is typically composed of a declarations page, policy form, and endorsements or riders that amend the policy form.


Uncertainty arising from the possible occurrence of given events. (2) The insured or the property to which an insurance policy relates.

Third Party

Someone other than the insured and the insurer. In liability insurance, the insurer provides defense against claims or suits brought by third parties—hence the term “third-party insurance.”