Glossary of Insurance Terms

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Benefit triggers

A term used to describe when to pay benefits. One type of benefit trigger is an activity of daily living (ADL). Insurance companies may use different events or types of benefit triggers to determine when benefits will begin to be paid. The triggers are described in the eligibility criteria of the policy.

Betterment

The increase in the dollar value of physical property which often occurs when new property replaces old property after a loss covered by property insurance. For example, betterment means that your repaired vehicle is better than it was before the accident. The application of the principle of indemnity would require the adjuster to reduce the insurer's payment to the insured by the amount of the recognized betterment.

Binder

A temporary or preliminary agreement to provide immediate insurance coverage until a policy can be written or delivered. May be oral or written and sets forth conditions of coverage. Often used during the interval between the coverage becoming effective and the time a formal policy is prepared and delivered. Normally it is issued for a limited period of time.

Broker

A marketing specialist who represents buyers of property and liability insurance and who deals with either agents or companies in arranging for the coverage required by the customer.