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Gray Arrow Glossary






ABANDONMENT: Giving up the proprietary rights in insured property to the Underwriter in exchange for payment of a constructive total loss.

ACCIDENT: An unexpected fortuitous event, unforeseen and unintended, not under the control of an insured and resulting in a loss.

ACCIDENT FREQUENCY: The number of times an accident occurs. Used in predicting losses upon which premiums are based.

ACCIDENT INSURANCE: A form of health insurance against loss by bodily injury.

ACCIDENTAL DEATH: Coverage in the event of death due to an accident, usually in combination with dismemberment insurance.

ACCOUNTS RECEIVABLE POLICY: An inland marine (also burglary) policy written to protect the insured from financial loss due to his inability to collect amounts owed him because of the destruction of his records.

ACT OF GOD: A flood, an earthquake or other accident or event that is without any human intervention and that could not have been prevented by reasonable care or foresight, but is the result of natural causes (A snowstorm is an Act of God, driving in one is an act of man).

ACTUAL CASH VALUE: The sum of money required to pay for damages or lost property, computed on the basis of replacement value less its depreciation by obsolescence or general wear.


  • The insured property is completely destroyed or
  • The Assured is irretrievably deprived of the insured property or
  • Cargo changes in character so that it is no longer the thing that was insured or
  • A ship is posted "missing" at Lloyd's, in which case both the ship and its cargo are deemed to be an actual total loss.

ACTUARY: A professional trained in the mathematics of insurance and risk management.

ADD-ONS: Additional coverages to your basic policy.

ADDITIONAL INSURED: A person or firm or corporation other than the named insured on a policy or mortgage company named in a mortgagee clause, who is protected against loss by the terms of the policy or mortgage company named in the mortgage clause.

ADJUSTER: An individual representing the insurance company and acting for the company in working on agreements as to the amount of a loss and the liability of the company in same.

ADVERSE SELECTION: Selection against the insurance company, the tendency of more poor risks to buy and maintain insurance than good risks.

AGENTS: Two types of agents sell insurance: (1) Independent Agents are self-employed business people who typically represent more than one insurance company and are paid on a commission basis; and (2) Exclusive Agents represent only one insurance company and may be salaried or work on a commission basis.

ALL RISK: Insurance against loss or damage to property arising from any fortuitous cause, except such as may be specifically excluded.

APPLICATION: A signed statement by a prospective insured client which becomes a part of the insurance contract.

APPRAISAL: A survey of property made for determining its insurable value or the amount of loss sustained.

ASSIGNMENT: The passing of beneficial rights from one party to another.

ASSIGNED RISK: A risk which Underwriters do not care to insure, but because of state law or otherwise, the insured must be protected and the insurance is therefore handled through the state and assigned to companies.

ASSUMED LIABILITY: Liability which would not rest upon a person except that he has accepted responsibility by contract expressed or implied. This is also known as contractual liability.

AUTOMOBILE INSURANCE PREMIUM DISCOUNTS: A discount offered to drivers for such safeguards as air bags, seat belts, good driving record, anti-theft devices, multiple vehicles, etc.

AUTOMOBILE FLEET POLICY: A commercial automobile policy covering five or more automobiles.

AVERAGE: A marine partial loss. This can be particular average or general average (see below).

AVERAGE CLAUSE: A clause in a marine insurance policy, whereby partial losses are subject to special conditions (e.g., a franchise or deductible is to be applied to claims).



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