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Death Benefit
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The limit of insurance or the amount of benefit that will be paid in the event of the death of the covered person.
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Debris Removal Clause
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A property insurance provision which provides coverage for the cost of clean-up and debris removal after a covered cause of loss has occurred, such as clean up after a fire or windstorm.
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Declaration
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1) With respect to property and liability insurance, the portion of the insurance policy itself, used to detail the name and address of the insured, the locations covered, the policy period, limits of insurance, endorsements attached and premiums for coverage. Commercial policies also contain such items as the type of entity and type of operation of the insured.
2) A statement made to the company or to its agents by a policy holder, upon which the company may rely in undertaking the insurance.
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Decreasing Term Life Insurance
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A life insurance policy in which the death benefit starts out at the full stated amount but which declines on a set scale throughout the life of the policy, reaching zero at the end of the policy term.
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Deductible
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In a policy providing a deductible clause, the amount which must first be subtracted from the total damage incurred before determining the insurance company's liability. Of several types used, the straight deductible establishes the insurer's liability above the deductible but not below it; the franchise deductible establishes the insurer's liability for the entire amount of damage once the deductible amount is exceeded in a loss; and the disappearing deductible establishes the insurer's liability for an increasing portion of the loss, as the total damage rises above the deductible, until the deductible finally "disappears." Then the insurer is liable for the entire amount. The deductible may be in the form of an amount of dollars, a percent of the loss, a percent of the value of the insured property, or a period of time, as in health insurance.
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Defense Clause
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A provision in commercial and personal liability insurance policies whereby the insurer has the right and duty to defend a lawsuit against the insured, even when those suits are considered false, groundless, or fraudulent.
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Deposit Premium
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A tentative charge made at the beginning of certain policies and reinsurance agreements, to be adjusted when the actual earned charge has been later determined. Also known as initial premium.
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Depositors Forgery Bond
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A bond where a person or corporation can insure against losses from forgery or alteration of outgoing negotiable instruments only, i.e., instruments drawn against the insured's account.
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Depreciation
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The reduction in value of tangible property caused by physical deterioration or obsolescence.
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Difference In Conditions Insurance (DIC)
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A property policy insuring "all risks" of physical loss or damage, excluding fire and extended coverage perils. Any cause of loss that would result in the property being left in a condition different from what it was prior to the occurrence of the loss event, except for those causes of loss specifically excluded. Such unnamed losses would include collapse, water damage, theft, and (optionally) flood and earthquake. Often, this coverage is provided on an inland marine basis.
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Direct Damage
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Causes of loss that produce direct and straightforward property damage (without interruption in time or deviation in space) from the cause of the event to the damaged property.
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Direct Loss
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Causes of loss that produce direct and straightforward property damage (without interruption in time or deviation in space) from the cause of the event to the damaged property.
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Direct Writer
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A company which sells insurance to the public either through employees licensed as agents or through licensed agents, compensated on a commission basis, who represent only one company; but not through independent agents representing more than one company.
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Directors and Officers Liability Insurance
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Protects officers and directors of a corporation against damages from claims resulting from negligent or wrongful acts in the course of their duties. Also covers the corporation (and even the officers and directors in some cases) for expenses incurred in defending lawsuits arising from alleged wrongful acts of officers or directors. These policies always require the insured to retain part of the risk uninsured.
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Disability
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Inability to work due to personal injury or illness. Each policy may contain its own modified definition.
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Discovery Period
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A period of time, after cancellation of an insurance contract or bond, during which the insured can discover whether there would have been a recoverable loss if the contract had remained in force. The period varies considerably and, in the case of certain bonds, could be indefinite by statutory requirements.
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Discrimination
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The exercise of choices in selecting risks, as an essential function of any insurance system, when used in matching individual risks with the rates representing their chances of loss or their expenses. Often used erroneously to imply unfair discrimination, which is illegal.
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Dismemberment
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Loss of and sometimes loss of use of, specified members of the body.
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Dividend
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An amount of money paid to the policyholders of a mutual insurer because of their ownership interest. A stock corporation may also pay a dividend to its policyholders if it writes participating insurance. In either event, the amount is payable on the basis of certain savings in losses or expenses realized by the insurer on that participating class of business.
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Domestic Company
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An insurance company incorporated or organized under state law is a domestic insurer in that particular state.
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Double Indemnity
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Twice the life insurance benefit, payable if death is caused by accident. Multiple indemnity is often available beyond that of double indemnity for death due to certain accidents.
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Duty to Defend
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A provision in commercial and personal liability insurance policies where the insurer has the right and duty to defend lawsuits against the insured, even when those suits are considered false, groundless, or fraudulent.
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Dwelling
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A house in which people live, as distinguished from a store, factory or any other building.
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Services