Insurance Glossary

A person who represents only one insurance company and is restricted by agreement from submitting business to any other company, unless it is first rejected by the agent’s captive company. (See EXCLUSIVE AGENT)

Insurers that are created and wholly owned by one or more non-insurers, to provide owners with coverage. A form of self-insurance.

Term used for statistical recording purposes to refer to a single incident or a series of closely related incidents causing severe insured property losses totaling more than a given amount, currently $25 million.

A percentage or dollar amount that a homeowner must pay before the insurance policy kicks in when a major natural disaster occurs. These large deductibles limit an insurer’s potential losses in such cases, allowing it to insure more property. A property insurer may not be able to buy reinsurance to protect its own bottom line unless it keeps its potential maximum losses under a certain level.

Probability of catastrophic loss, based on the total number of catastrophes in a state over a 40-year period.

Using computers, a method to mesh long-term disaster information with current demographic, building and other data to determine the potential cost of natural disasters and other catastrophic losses for a given geographic area.

Catastrophic Ground Cover Collapse offers protection if the insured property experiences all of the following: Geological activity that results in the abrupt collapse of the ground cover A depression in the ground cover clearly visible to the naked eye Structural damage to the building, including the foundation The insured structure being condemned and ordered to be vacated by the governmental agency Structural damage consisting merely of the settling or cracking of a foundation, structure or building does not constitute a loss resulting from a catastrophic ground cover collapse.

Citizens is responsible for paying hurricane and other covered claims to its policyholders. If Citizens funds are depleted after a catastrophic event, resulting in a deficit, assessments are levied according to Florida law. This ability to levy assessments provides Citizens with resources to pay claims after an event. Below is a summary of the Emergency Assessment. A broad base of property and casualty policyholders, including Citizens policyholders, is assessed directly by their insurer at renewal. For each of the 3 Citizens accounts, this assessment may not be more than 10 percent of the policy premium or 10 percent of the remaining deficit, whichever is greater. That means that assessable policyholders could be assessed a maximum of 30 percent of assessable premium if there is a deficit in each of the 3 Citizens accounts. The Emergency Assessment can be spread over multiple years, which could reduce the burden on Florida policyholders.