Damage to Property of Others: Damage covered up to $500 per occurrence for an
insured who damages another's property. Payment is made despite the lack of legal
liability. Coverage is included in Section II of the homeowners policy.
Debenture: A bond that is backed only by the general credit of the issuing
corporation. No specific property is pledged as security behind the loan.
Declarations: Statements in an insurance contract that provide information about
the property or life to be insured and used for underwriting and rating purposes and
identification of the property or life to be insured.
Declination: The insurer's refusal to insure an individual after careful evaluation
of the application for insurance and any other pertinent factors.
Deductible: An amount which a policyholder agrees to pay, per claim or per
accident, toward the total amount of an insured loss.
Dental Insurance: Individual or group plan that helps pay costs of normal dental
care as well as damage to teeth from an accident.
Dependent Benefits: Social Security benefits available to the spouse or children of
a Social Security beneficiary.
Deposit Premium: The premium deposit paid by a prospective policy holder when an
application is made for an insurance policy. It is usually equal, at least, to the first
month's estimate premium and is applied toward the actual premium when billed.
Depreciation: A decrease in the value of property over a period of time due to wear
and tear or obsolescence. Depreciation is used to determine the actual cash value of
property at time of loss. (See Actual Cash Value)
Difference in Conditions Insurance (DIC): "All-risks" policy that covers other
perils not insured by basic property insurance contracts, supplemental to and excluding
the coverage provided by underlying contracts.
Direct Loss: Financial loss that results directly from an insured peril.
Direct Placement: Sale of an entire issue of bonds or stock by the issuer to one or
a few large institution customers such as an insurance company without trying to market
the issue publicly.
Direct Premiums Written: Property and casualty insurance premiums written (less
return premiums), without any allowance for premiums for assumed or ceded reinsurance.
Direct Response System: A marketing method where insurance is sold without the
services of an agent. Potential customers are solicited by advertising in the mail,
newspapers, magazines, television, radio, and other media.
Direct Writer: The industry term for a company which uses its own sales employees
to write its policies. Sometimes refers to companies which contract with exclusive agents.
Directors' and Officers' Liability: the exposure of corporate managers to claims
from shareholders, government agencies, and employees, and others alleging mismanagement.
Disability: a physical or a mental impairment that substantially limits one or more
major life activities of an individual. It may be partial or total. (See Partial Disability;
Total Disability.)
Disability Benefit: Periodic payments, usually monthly, payable to participants
under some retirement plans, if such participants are eligible for the benefits and become
totally and permanently disabled prior to the normal retirement date.
Disability Income Insurance: A form of health insurance that provides periodic
payments to replace income when an insured person is unable to work as a result of
illness, injury, or disease.
Disappearing Deductible: Deductible in an insurance contract that provides for a
decreasing deductible amount as the size of the loss increases, so that small claims are
not paid but large losses are paid in full.
Dismemberment: Loss of body members (limbs), or use thereof, or loss of sight due
to injury.
Disposable Personal Income: The personal income less personal tax and nontax
payments. It is the income available to people for spending and saving.
Dividend: A return of part of the premium on participating insurance to reflect he
difference between the premium charged and the combination of actual mortality, expense
and investment experience. Such premiums are calculated to provide some margin over the
anticipated cost of the insurance protection.
Dividend: (1) An amount returned to a policyholder by an insurance company out of
its earnings. (2) In capital stock companies, a share of the profits distributed to
stockholders.
Dividend: Portion of the premium which is returned to the insured because of
favorable experience by the company.
Dividend: A policy holder's share in the insurer's divisible surplus fund
apportioned for distribution, which may take the form of a refund of part of the
premium on a participating policy. The term is also used for a stockholder's share
of the portion of a corporation's earnings that is distributed in cash or
additional stock.
Dollar Threshold: In no-fault auto insurance states with the dollar threshold, it
prevents individuals from suing in tort to recover for pain and suffering unless their
medical expenses exceed a certain dollar amount.
Domestic Insurer: An insurance company is a domestic company in the state in which
it is incorporated.
Donor: The person making a gift.
Dramshop Law: Law that imputes negligence to the owner of a business that sells
liquor in the case that an intoxicated customer causes injury or property damage to
another person. Usually excluded from general liability policies.
Dread Disease Insurance: Insurance providing an unallocated benefit, subject to a
maximum amount, for expenses incurred in connection with the treatment of specified
diseases, such as cancer, poliomyelitis, encephalitis and spinal meningitis.
Driver Education Credit: Student discount or reduction in premium amount for which
young drivers become eligible on completion of a driver education course.
Dwelling Property 1: Property insurance policy that insures the dwelling at actual
cash value, other structures, personal property, fair rental value, and certain other
coverages. Covers a limited number of perils.
Dwelling Property 2: Property insurance policy that insures the dwelling and other
structures at replacement cost. It adds additional coverages and has a greater list of
covered perils than the Dwelling Property 1 policy.
Dwelling Property 3: Property insurance policy that covers the dwelling and other
structures against direct physical loss from any peril except for those perils otherwise
excluded. However, personal property is covered on a named-perils basis.
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