Underwriting

Underwriting imbalance in which higher-risk applicants are more likely to buy or keep coverage than the premium assumes.

Underwriting evidence used mainly in life, disability, and optional benefits to approve, rate, postpone, or decline coverage.

Pricing method that adjusts premium using the insured's own loss results, often through an experience modification or similar factor.

Legally recognized financial or relational stake in the life, property, or liability exposure being insured.

Behavioral increase in loss risk caused by dishonesty, weak controls, or reduced care once insurance exists.

Tangible feature of a person, property, location, or operation that increases the chance or severity of loss.

Insurance decision process that screens submissions, classifies exposure, and sets price, terms, or declination.

The total premium charged before deductions, reflecting the base insurance cost plus loadings for expenses, contingencies, and profit.

File and use rating laws let insurers put rates into effect after filing them with regulators, without waiting for prior approval.

A property underwriting construction class indicating higher fire resistance than standard noncombustible construction.

A commercial auto-style form used for businesses such as dealers, repair shops, and service stations that have both liability and garage operations exposures.

Business liability insurance protects a company against financial exposure from claims for injuries, property damage, or other legal wrongs.

Cash flow underwriting evaluates payment timing risk before insurers accept a policy or grant flexible premium terms.

A temporary premium amount collected before the final annual or policy premium is confirmed.

The part of an insurance rate or premium added to cover the insurer's acquisition, underwriting, servicing, and administrative expenses.

A colloquial form used for loss ratio-style analysis, comparing claims paid to earned premium.

The right to move from one insurance form to another under policy terms and rules.

A divisible contract clause treats certain property insurance coverages as separately applied so a breach affecting one location or item does not automatically void all coverage.

Assessable insurance allows an insurer to impose additional premium assessments if losses significantly exceed the initial premium base.

Assessment insurance uses additional assessments to cover losses above initial premium expectations.

The risk selection work done by the producer or representative in the sales process before the application reaches the insurer's home office underwriter.

A workers' compensation experience rating measure used to reflect loss cost efficiency.

Situation in which policyholders surrender policies for cash in ways that leave insurers with a higher-risk group.

An assessment company can charge additional premiums when collected premiums are insufficient for claims and operating costs.

The insured person’s age at a specific date, often used for pricing and policy adjustments.

A reinsurance pricing approach where premium is linked to prior loss results.

A cash flow plan is a premium-payment schedule that matches insurance costs to expected cash availability.

Expected claims are the projected number or cost of claims for a policy, class, or book of business over a stated period.

In insurance, an expense is a cost of acquiring, underwriting, servicing, or administering business, separate from the claim payment itself.

The workers compensation classification that best describes the insured's business and usually carries the largest payroll.

A person who reviews insurance risks, records, or medical information in underwriting, claims, or regulatory work.

An intermediary carrier or contract-based insurer arrangement used to handle certain liabilities or specialized risks.

The American agency system describes insurance distribution through independent and appointed agents who represent multiple carriers.

Capacity of parties refers to a party's legal ability to enter and be bound by an insurance contract.

The net amount of coverage still exposed to loss at the time of a policyholder's death or event.

An insurer's formal decision not to accept a coverage application.

A take-it-or-leave-it policy form where the insurer drafts the terms and the policyholder accepts them as written.

A policy clause that allows approved changes to premium, coverage, or duration under defined conditions.

The tendency for higher-risk applicants to seek coverage at average rates while better risks stay out or leave.

An actuarial pricing convention that can use a younger age than the insured's actual age to set life insurance premiums.

The starting premium amount for a policy before taxes, fees, endorsements, and reinsurance adjustments are applied.

The component of a premium used to cover expected operating and acquisition costs before adding pure risk charges.

A combined package that covers property damage and third-party liability exposures under a coordinated commercial structure.

The maximum amount of risk the market or insurer is willing to carry for a specific policy type.

To cede is to transfer part or all risk exposure from one insurer to a reinsurer.

A blended insurance rate applied to an entire covered class or group instead of pricing each person or exposure separately.

A temporary or provisional receipt issued while an application is pending that may provide interim coverage.

Coverage for risks to buildings and work in progress during the construction phase.

A whole-life policy funded by continuous premium payments for life coverage with stable underwriting assumptions.

An owned or managed insurance account whose operations or risk actions are tightly governed by policy terms.

A policy right that allows insured persons or policyholders to switch to another form under defined terms.

An expense amount in life insurance that reflects the insurer's cost to provide risk coverage.

The charge within life insurance pricing that reflects the amount used to pay for current mortality risk.

A surety bond that protects against loss of deposited funds or property in a banking context.

Depreciation insurance pays replacement value for damaged property without subtracting wear-and-tear depreciation.

A Difference in Conditions (DIC) endorsement extends coverage by adding protections not fully included in a primary property policy.

A drive other car endorsement extends auto liability and sometimes other coverages to a named individual while using certain non-owned autos.

Dwelling forms are property insurance forms used to insure residential dwellings outside the standard homeowners package, often with different peril and valuation structures.

A legal right to use another person's land for a specific purpose, which can affect title, property, and liability insurance analysis.

The temporary premium charged at the start of a policy before the insurer knows the insured's final exposure.

The anticipated rate or probability of death for a defined insured population over a stated period.

A flat charge added to some commercial insurance premiums to help recover fixed policy issuance and servicing costs.

The expense ratio measures how much of an insurer's premium is consumed by operating expenses rather than claim payments.

The actual death experience observed in an insured group and compared with the mortality that had been expected.

Exposure units are the measurable bases insurers use to rate coverage, such as payroll, car-years, occupied beds, or units of insured value.

A fire protection rating method used in property insurance to reflect municipal fire defenses and water supply.

Health coverage issued to an employer or other eligible group sponsor for the benefit of covered members under a group contract.

An actuarial premium amount that funds expected benefits on a level basis, excluding expense and profit loadings.

Occupancy describes how a building or location is actually used, which directly affects property-insurance underwriting and pricing.

The illegal insurance practice of denying, restricting, or overpricing coverage based on geographic or demographic bias rather than legitimate risk.

The insurance-law principle that parties must be honest and disclose material facts when forming and administering an insurance contract.

An independent estimate of property value used to set adequate insurance coverage and resolve valuation disputes.

The risk that the value of owned assets falls faster than expected, reducing financial flexibility.

A group of insurers that jointly underwrite large risks and share premiums and losses.

A reinsurance transfer where the reinsurer takes over full policy obligations from the cedent.

A medical report used in health and life underwriting to verify condition history and treatment details.

Setting an insurance policy effective date earlier than the signing date to lock in age, eligibility, or premium expectations.

Any uncertainty that can reduce revenue, increase costs, or threaten a company’s ability to operate.

A premium rate assigned to a shared risk class instead of underwriting each risk entirely individually.

A rating and rules reference used to classify commercial risks and apply pricing rules in business insurance.

An insured's omission or hiding of a material fact, which can void coverage when underwriting is affected.

A bounded range in insurance benefit design used to define guarantees and minimum exposure.

A life insurance term in which the policy includes coupon or credit features that may reduce cost when conditions are met.

The total reinsurance exposure from one catastrophe across multiple underlying insureds or policies.

In insurance operations, debit refers to premiums still owed by the policyholder and tracked by the collection function.

A life product whose death benefit falls over time while the policy remains in force.

An approved provider through which a plan channels mental health care and reimbursement.

The total premium an insurer writes on its own policies before subtracting any premium ceded to reinsurers.

A life insurance design that combines permanent insurance with additional term coverage for a limited period.

The portion of a policy's premium that corresponds to the part of the coverage period that has already passed.

An electrical apparatus exemption clause limits property coverage for electrical damage unless the loss results in a covered ensuing fire.

Employer's non-ownership liability insurance protects a business when employees use their own vehicles for company business and the employer is sued for resulting auto liability.

A rating factor that adjusts premium based on an employer's actual loss experience compared with similar insureds.

Increased hazard means a change in conditions or behavior that makes the insured risk materially more dangerous than the insurer expected.

Learn about the role of a Map Clerk in property insurance, including their responsibilities in tracking insurer exposure and entering data on maps.

Learn about prospective rating in general insurance, a method used to calculate future premiums based on past loss experiences.

The projected return rate used in certain annuity payment formulas at issue.

Builder’s risk coverage forms protect property under construction by insurers against physical loss, theft, and specific construction-related perils.

A loss-to-premium measure used in underwriting to gauge claims severity versus collected revenue in a portfolio.

Cargo insurance protects goods in transit against loss, damage, theft, or delay-related exposure.