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GLOSSARY
Agent - A licensed individual or organization
authorized to sell insurance by or an behalf or insurer.
Binder - A binder is a temporary or
preliminary agreement which provides coverage, generally valid for no
more than 90 days until a policy can be written or delivered.
Broker - A licensed individual or
organization who transacts insurance on your behalf and who may charge
a broker fee for their services and as such, the broker would not be
appointed by the insurance company.
Broker Fee Agreement - A written agreement
that outlines the amount of a broker fee and specifically what services
will be rendered by a licensed broker-agent for that fee.
The form should include any refund arrangements as well as, what fee,
if any, will accrue upon renewal .Broker fees cannot be charged for
Assigned Risk automobile policies or for California Fair Plan coverage.
Claim - Notification to an insurance
company that a loss has occurred and that payment is expected under
the terms and conditions of a policy.
Deductible - The amount of the loss
which the insured is responsible to pay before benefits from the insurance
company are payable. You may choose a higher deductible to lower your
premium.
Effective Date - This is the date
your coverage will begin.
Insured - The policy holder-the person(S)
entitled to benefits in case of an accident or loss.
Insurer - The insurance company, e.g.
"General Mutual Insurance Company", not the agency's name,
e.g. "ACME Insurance Agency".
Lender/Lien holder - This is the firm
entity that has loaned you money on the property you are insuring, whether
that is a house, car, boat, motorcycle, etc. It is usually a requirement
by the lender or lien holder that you maintain proper coverage on the
property or vehicle while there is a loan balance outstanding.
Notice of Appointment - An official
notice to the Department by an insurance company appointing an individual
or organization to act as their authorized agent.
Policy - Written contract of insurance.
Policy Exclusions - These are written
exclusions or exceptions to what the policy will cover or insure. For
examples: no drivers under the age of 21 etc.
Premium - The sum paid to the insurance
company for an insurance policy.
For the status of broker-agent license, contact:
California Department of Insurance
License Bureau
320 Capitol Mall, 1st Floor
Sacramento, Ca. 95814
916-322-3555
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