Insurance Definitions G - H - I
Gaps: Areas not covered by a particular policy or set of policies. Coverage gaps occur when your current policies either does not cover you against certain losses, or does not provide enough coverage for your actual needs.
Gap Insurance: An auto insurance policy option that covers you from having to pay the entire balance left on your auto loan or lease, in case an accident totals your vehicle, and any compensation does not cover the balance.
Garage Liability (GL): A special policy written to cover auto salesrooms, used car lots, service stations, or repair garages for bodily injury and property damage with premiums based on payroll of the business.
General Agent: An agent who supervises other agents in a given territory and acts as an exclusive agent in this territory.
General Damages: Money paid to a claimant for losses that cannot be specifically measured, such as pain and suffering.
Grace Period: Prescribed period of time after the premium due date during which the coverage remains in force and the late premium may be paid.
Gross Earnings: Revenue from operating sources, before deducting expenses incurred in gaining such revenue.
Group Insurance: An insurance plan by which a large number of persons are protected under one master policy.
Guaranteed Insurability (guarantee issue): An arrangement, usually provided by rider under an existing policy, whereby additional insurance may be purchased at various times, without a new medical examination or other evidence of insurability.
HMO: health maintenance organization.
Hazard: Any factor that creates or increases the chance of loss.
- A physical hazard is created by the condition, occupancy, or use of the property itself. Examples include faulty brakes increasing the chance of collision and faulty electrical wiring increasing the chance of fire.
- A moral hazard is a subjective characteristic of the insured that increases the chance of loss. Examples include arranging an accident to collect the insurance and inflating the amount of a claim.
- A morale hazard is carelessness or indifference to a loss because of the existence of insurance. Leaving the car keys in an unlocked car is such an example.
Health Insurance: This term has become accepted by the industry for the branch which includes all types of loss of time and medical expense insurance. It is also known as accident and health insurance, sickness and accident insurance, etc.
Hired Car: An automobile of which the exclusive use and control has been temporarily given to another for a consideration. This should be distinguished from contract hauling, since in the latter case the owner retains control of the movements of the vehicle and simply agrees to furnish transportation.
Hold-Harmless Agreement: An agreement by which one party assumes the liability of another. Hold-harmless agreements are often found in leases; the lessee (tenant) agreeing to assume the lessor's (landlord's) liability if members of the public are injured through some faulty condition in the premises occupied by the lessee.
Homeowners Insurance: Insurance coverage for home losses, including personal property loss and some kinds of damages that leave a homeowner liable for the injury of others.
Hospital Benefits: Additional benefits payable under an accident, health or disability policy in case the insured is confined to a hospital.
III: Insurance Information Institute.
Immediate Annuity: An annuity contract which provides for the first annuitized payment immediately after issue.
Impaired Risk: One which presents an unduly high probability of loss.
Improvements and Betterments Insurance: Additions or changes to a building to enhance its value, made by a lessee, at his/her own expense, while he/she is occupying the building. These become part of the realty and require special insurance considerations.
Incidents of Ownership: The rights to exercise any of the privileges in the policy: to change the beneficiary, withdraw cash values, make loans on the policy, assign it, etc.
Incontestability Clause: A clause in an insurance contract that provides the company may not void the policy after it has been in force more than the specified period, usually two years after issue. The policy may be voided only under certain conditions (for example, a misstatement in the application).
Incurred but not reported (IBNR) reserve: The liability for future payments on losses which have already occurred but have yet been reported in the insurer's records.
Incurred Loss Ratio: This is calculated by applying incurred losses to the earned premium to determine the percentage of losses.
Indemnify: To restore an individual to the approximate financial position occupied before the loss. Indemnity is the contract, such as insurance, that serves to indemnify an individual after a loss.