-N-

Named Insured - Person, business or other entity named in the Declarations to whom the policy is issued.

Named Peril Policy - Insurance policy that insures only against perils specifically listed in the policy. Also called specified peril policy.

National Association Of Insurance Commissioners (NAIC) - Organization made up of individual state insurance commissioners whose purpose is to promote uniformity in regulation by drafting model laws and regulations.

National Flood Insurance Program - Program run by the federal government that makes flood insurance available to eligible communities at subsidized rates. Includes coverage for both buildings and personal property.

Negligence - The lack of reasonable care that is required to protect others from the unreasonable chance of harm.

Nonadmitted Insurer - Company that is not authorized to do business in a particular state. Also called a nonauthorized insurer.

Nonconcurrency - Situation that exists when the same property is covered by more than one policy, but the policies are not identical as to the extent of coverage provided.

Nonrenewal - Decision made by an insured or insurance company to not continue coverage for another policy period after the current policy period expires.

-O-

Occurrence - A loss that occurs at a specific time and place or over a period of time.

Occurrence Form - Commercial General Liability coverage form that covers bodily injury or property damage that occurs during the policy period, regardless of when the claim is made.

Offer and Acceptance - One of the elements of a legal contract; means that a contract must involve two parties; one who makes an offer and another who accepts the offer. Also called Agreement.

Open Competition - Method of rate and form regulation used by some state insurance departments that allows insurance companies to compete openly with the forms and rates they select, subject only to requirements of adequacy and nondiscrimination.

Open Peril Policy - Insurance policy that protects the insured from losses caused by any peril that is not specifically excluded by the policy. Also called all risk and special coverage.

-P-

Package Policy - Policy that includes more than one type of insurance coverage. Also called a multi-line policy.

Pair or Set Condition - Loss settlement condition found in property insurance contracts that states that when part of a set is damaged or destroyed, the insured will not be reimbursed for the value of the entire set. Various methods are used to determine the amount of reimbursement.

Peril - The cause of loss.

Permitted Incidental Occupancies Endorsement - Homeowner’s policy endorsement that covers the insured’s business activities conducted on the residence premises.

Personal Articles Form - Personal Inland Marine Form that provides scheduled coverage for nine optional classes of personal property: jewelry, furs, cameras, musical instruments, silverware, golf equipment, fine arts, stamp collections, and coin collections.

Personal Auto Policy - Auto policy that provides Property and Liability coverage for both owned and nonowned autos used, maintained or operated by the insured and his or her family members.

Personal Contract - One of the characteristics of an insurance contract; means that an insurance contract insures a person not property.

Personal Effects Form - Personal Inland marine form that covers an insured’s personal belongings, such as baggage while traveling.

Personal Injury - Injury other than bodily injury arising out of such things as libel, slander, false arrest, wrongful entry, violation of privacy, and malicious prosecution.

Personal Liability and Medical Payments to Others Endorsement - Endorsement to the Dwelling policy that provides Liability coverage similar to that provided by Section II of the Homeowners policy. May also be purchased as a separate policy.

Personal Lines - Insurance coverages that protect individuals and their families.

Personal Property Form - Personal Inland Marine form that provides open peril coverage for personal property.

Personal Property Floater Risks - Category of the Nationwide Definition that includes risks eligible for Personal Inland Marine insurance.

Personal Property Replacement Cost Endorsement - Homeowner’s policy endorsement that adds replacement cost coverage for personal property.

Personal Umbrella Policy - See Umbrella Policy

Personal Yacht Insurance - Type of personal watercraft policy written for large pleasure boats.

Physical Hazard - Hazard that arises from the condition, occupancy or use of the property itself.

Policy - An insurance contract.

Policy Form - See Coverage form.

Policy Limit - Maximum amount the insurance company will pay for a particular loss, or for losses sustained during a period of time. Also called limit of coverage, limit of insurance and limit of liability.

Policy Period - The date and time specified in the Declarations for when coverage begins and ends.

Primary Insurance - When two or more coverages or policies apply to the same loss, the one that pays first, up to its limit of liability or the amount of the loss, whichever is less.Producer - General term used to describe someone who sells insurance, such as an agent, broker or solicitor.

Professional Liability - Liability arising out of rendering or failing to render services of a professional nature.

Professional Liability Policy - Insurance coverage issued to a professional that covers the rendering or failing to render services of a professional nature. Policies are tailored to fit specific occupational needs.

Proof Of Loss - Form completed by an insured after a loss that provides an official inventory of damages.

Property Damage (PD) - Damage to or destruction of property, including loss of use of the property.

Property Insurance - Line of Insurance that includes many types of coverages designed to handle the risk that a person will suffer financial loss because something he or she owns is damaged or destroyed.

Pro Rata Other Insurance - Method of handling insurance when more than one coverage applies to a loss. Each coverage pays a portion of the loss in proportion to the relationship its limit of liability bears to the total limit of liability under all applicable insurance. Also called contribution by limits.

Proximate Cause - An action that, in a natural and continuous sequence, produces a loss.

Punitive Damages - Type of damages intended to punish the defendant and make an example out of him or her to discourage others from behaving the same way. Also called exemplary damages.

Pure Risk - A risk in which there is no chance of gain, only loss.

-Q-

Quotation - A summary of coverages and premiums proposed by an agent to a prospective client.