Insurance Abbreviations
86 abbreviations · part of Business & Finance Abbreviations
Abbreviations from auto, home, renters, life, disability, annuity, business liability, workers' compensation and marine insurance, plus the industry's own vocabulary for underwriting, claims and reserves. Many appear on declarations pages, certificates of insurance and policy forms, and each entry explains what the coverage pays for and how it differs from similar coverages. Insurance is regulated state by state in the US and nationally elsewhere, so required coverages and limits vary by location; health insurance terms are covered separately.
| Abbreviation | Stands for | Description |
|---|---|---|
| ACORD | Association for Cooperative Operations Research and Development | Nonprofit standards organization for the insurance industry that publishes data standards and the standardized forms used across the US, such as the ACORD 25… |
| ACV | Actual cash value | Claim valuation method that pays the cost to replace damaged property minus depreciation for age and wear, so an older item or roof is worth much less than a new one. |
| AD&D | Accidental death and dismemberment insurance | Limited coverage that pays a benefit if the insured dies or loses a limb, eyesight, hearing or speech as a direct result of an accident. |
| AI | Additional insured | Person or organization added to someone else's liability policy by endorsement, gaining coverage for claims arising from the named insured's work, such as a property… |
| ALE | Additional living expenses | Homeowners and renters coverage, often labeled Coverage D or loss of use, that pays increased costs such as hotel bills, restaurant meals and temporary rent when a… |
| AOP | All other perils | Deductible that applies to most property claims, such as fire, theft or water damage, as distinct from separate, often larger deductibles for hurricanes, named storms… |
| BI | Bodily injury liability | Auto and general liability coverage that pays for injuries the policyholder causes to other people, including medical bills, lost wages, pain and suffering and legal… |
| BOP | Business owner's policy | Package policy for small and midsize businesses that bundles commercial property, general liability and business income coverage into one policy, usually at a lower… |
| CAR | Contractors' all risks insurance | Construction insurance covering physical damage to a project under construction, materials and often third-party liability, from start of work until handover. |
| CAT | Catastrophe | Insurance industry term for an event, such as a hurricane, wildfire, earthquake or severe convective storm, that causes very large insured losses affecting many… |
| CDW | Collision damage waiver | Optional rental car product in which the rental company agrees not to hold the renter responsible for damage to the vehicle, technically a waiver rather than insurance. |
| CGL | Commercial general liability | Standard business liability policy form, published by the Insurance Services Office, that most US insurers use for general liability coverage. |
| CLUE | Comprehensive Loss Underwriting Exchange | LexisNexis database of home and auto insurance claims, typically covering the past seven years, that insurers check when quoting new policies. |
| COI | Certificate of insurance | One-page document issued by an insurance agent or insurer summarizing a policyholder's coverage, including insurers, policy numbers, dates and limits, used to prove… |
| COLI | Corporate-owned life insurance | Life insurance a company buys on its employees, typically executives, naming itself as beneficiary, often to fund benefits or protect against the loss of key people. |
| COLL | Collision coverage | Auto physical damage coverage that pays to repair or replace the policyholder's car after it hits another vehicle or object, or rolls over, regardless of fault, minus a… |
| COMP | Comprehensive coverage | Auto physical damage coverage for losses other than collisions, such as theft, vandalism, fire, hail, flood, falling objects, broken glass and hitting a deer, subject… |
| CPI | Collateral protection insurance | Auto insurance a lender buys and charges to a borrower whose required physical damage coverage on a financed vehicle has lapsed, protecting the lender's interest in the… |
| CSL | Combined single limit | Liability limit expressed as a single amount, such as $500,000, that applies to all bodily injury and property damage from one accident, instead of separate split limits. |
| CSV | Cash surrender value | Amount a policyholder receives if they cancel a permanent life insurance policy or annuity, equal to the cash value minus any surrender charges and outstanding loans. |
| CTP | Compulsory third party insurance | Mandatory Australian motor insurance covering liability for death or injury to other people caused by the vehicle, bought with or alongside vehicle registration. |
| D&O | Directors and officers liability insurance | Insurance protecting company directors and officers against personal losses from lawsuits alleging wrongful acts in managing the company, such as breach of fiduciary… |
| DOI | Department of insurance | State government agency that licenses insurers and agents, approves rates and forms in many lines, monitors solvency and handles consumer complaints. |
| DOL | Date of loss | Date on which an insured event, such as an accident, fire or storm, occurred, used to determine which policy applies and whether coverage was in force. |
| DP-3 | Dwelling property 3 special form | Landlord policy for a rental home owned but not occupied by the policyholder, covering the dwelling on an open-perils basis and optionally fair rental value and… |
| E&O | Errors and omissions insurance | Professional liability coverage that protects businesses and professionals, such as consultants, real estate agents, insurance agents and software firms, against claims… |
| E&S | Excess and surplus lines | Market for insuring risks that standard licensed (admitted) insurers decline, such as unusual businesses, high-hazard properties or new exposures, placed with… |
| EL | Employers' liability insurance | Coverage for an employer's legal liability when an employee sues over a work injury or illness, protecting against claims outside the workers' compensation system; in… |
| EOI | Evidence of insurance | Document confirming that property insurance is in force, issued to a mortgage lender or landlord, typically on ACORD forms for residential or commercial property. |
| EPLI | Employment practices liability insurance | Coverage for claims by employees or job applicants alleging discrimination, harassment, wrongful termination, retaliation or other violations of employment rights… |
| FIA | Fixed indexed annuity | Insurance contract that credits interest based on a market index such as the S&P 500, subject to caps or participation rates, while guaranteeing that the account will… |
| FNOL | First notice of loss | Initial report to an insurer that a loss has happened, such as a car accident, burst pipe or theft, which starts the claims process. |
| FPI | Force-placed insurance | Property insurance a mortgage servicer buys and charges to a borrower whose own homeowners coverage lapsed, protecting the lender's collateral, usually at a much higher… |
| FR-44 | FR-44 certificate of financial responsibility | Form used in Florida and Virginia that certifies a driver convicted of DUI or similar offenses carries higher-than-normal liability insurance limits. |
| GAP | Guaranteed asset protection | Optional insurance that covers the difference between what a driver owes on a car loan or lease and the vehicle's actual cash value if it is totaled or stolen. |
| GL | General liability insurance | Business insurance that pays for claims that the company caused bodily injury or property damage to others, or personal and advertising injury such as libel, along with… |
| GUL | Guaranteed universal life | Universal life policy designed mainly for a lifetime guaranteed death benefit at a lower premium than whole life, with little or no cash value accumulation. |
| GWP | Gross written premium | Total premium an insurer writes on policies during a period, before deducting reinsurance and before recognizing it as earned over the policy term. |
| HO-3 | Homeowners 3 special form | Most common US homeowners policy form, covering the house on an open-perils basis, meaning all causes of loss except those excluded, and personal belongings on a… |
| HO-4 | Homeowners 4 contents broad form | Renters insurance policy covering a tenant's personal belongings against named perils, plus personal liability and additional living expenses, without covering the… |
| HO-5 | Homeowners 5 comprehensive form | Homeowners policy covering both the dwelling and personal property on an open-perils basis, broader than the HO-3, usually offered for newer or higher-value homes. |
| HO-6 | Homeowners 6 unit-owners form | Condominium owner's policy covering the interior of the unit, improvements, personal belongings, liability and loss assessments, complementing the association's master… |
| IBNR | Incurred but not reported | Estimate of claims for losses that have already happened but have not yet been reported to the insurer, recorded as a reserve on the balance sheet. |
| IDV | Insured declared value | Maximum sum an Indian motor insurance policy pays if the vehicle is stolen or declared a total loss, based on the manufacturer's listed price adjusted by depreciation… |
| ILIT | Irrevocable life insurance trust | Trust created to own life insurance so that the death benefit stays out of the insured's taxable estate and passes to beneficiaries under the trust's terms. |
| ILS | Insurance-linked securities | Investments whose returns depend on insurance losses, such as catastrophe bonds that pay investors high yields but lose principal if a defined disaster occurs… |
| ISO | Insurance Services Office | Verisk subsidiary that develops standardized policy forms, rules and loss cost data used by most US property and casualty insurers, such as the commercial general… |
| ITV | Insurance to value | Ratio of a property's insurance limit to its full replacement cost; insurers expect adequate ITV and may apply a coinsurance penalty if a property is underinsured. |
| IUL | Indexed universal life | Universal life policy whose cash value earns interest linked to a stock index such as the S&P 500, subject to a cap and usually a 0% floor, without investing directly… |
| LAE | Loss adjustment expense | Cost of investigating, defending and settling claims, separate from the claim payments themselves. |
| LTC | Long-term care insurance | Insurance that pays for extended personal care services, such as help with bathing and dressing, at home, in assisted living or in a nursing home, triggered when a… |
| LTD | Long-term disability insurance | Insurance that replaces part of income, commonly around 60% of salary, when a disability lasts beyond an elimination period, often 90 to 180 days, potentially paying… |
| MEC | Modified endowment contract | Life insurance policy funded with more premium than federal limits allow under the "seven-pay test," which loses some tax advantages: loans and withdrawals are taxed as… |
| MedPay | Medical payments coverage | Optional auto or homeowners coverage that pays reasonable medical expenses for injured people regardless of fault, in modest amounts such as $1,000 to $10,000, often… |
| MGA | Managing general agent | Specialized insurance intermediary with authority from insurers to underwrite, price and bind policies, and often handle claims, usually for niche or hard-to-place risks. |
| MVR | Motor vehicle record | Official driving history kept by a state, listing license status, violations, accidents, suspensions and DUI convictions. |
| MYGA | Multi-year guaranteed annuity | Fixed annuity that pays a guaranteed interest rate for a set term, typically three to ten years, similar to a certificate of deposit but issued by an insurer with… |
| NAIC | National Association of Insurance Commissioners | Organization of the chief insurance regulators of the 50 states, the District of Columbia and five US territories that develops model laws, financial reporting… |
| NCD | No-claims discount | Premium discount, used in British and many other motor insurance markets, that grows for each consecutive year a driver goes without making a claim, often reaching 60%… |
| NFIP | National Flood Insurance Program | FEMA-run program that sells flood insurance to homeowners, renters and businesses in participating communities, since standard homeowners policies exclude flood damage. |
| OCIP | Owner-controlled insurance program | Single insurance program bought by a project owner to cover all contractors and subcontractors on a large construction project, typically including general liability… |
| P&C | Property and casualty insurance | Branch of insurance covering damage to property, such as homes, cars and buildings, and legal liability for injuring others or damaging their property. |
| P&I | Protection and indemnity insurance | Marine liability insurance covering shipowners' third-party risks, such as crew injuries, cargo damage claims, collisions with fixed objects, pollution and wreck… |
| PD | Property damage liability | Auto insurance coverage that pays for damage the policyholder causes to other people's property, such as cars, fences and buildings, in an at-fault crash. |
| PI | Professional indemnity insurance | Commonwealth term for insurance covering professionals against claims that negligent advice or services caused a client loss, the equivalent of errors and omissions… |
| PIP | Personal injury protection | Auto insurance coverage that pays medical expenses, lost wages and sometimes funeral and household services for the driver and passengers after an accident, regardless… |
| PL | Public liability insurance | British, Irish and Australian term for insurance covering claims by members of the public for injury or property damage caused by a business's activities, the… |
| PUA | Paid-up additions | Small blocks of fully paid whole life insurance purchased with policy dividends or extra premiums, each adding to both the death benefit and cash value. |
| RCV | Replacement cost value | Amount needed to repair or replace damaged property with new materials of like kind and quality, without deducting depreciation. |
| ROP | Return of premium | Feature or rider on term life or disability insurance that refunds some or all premiums paid if the insured outlives the term or makes no claims, in exchange for a much… |
| SIR | Self-insured retention | Amount the insured must pay itself, including defense costs, before a liability policy responds, common in large commercial programs. |
| SLI | Supplemental liability insurance | Rental car coverage that raises third-party liability protection above the state minimum the rental company provides, often to $1 million. |
| SPIA | Single premium immediate annuity | Annuity bought with a lump sum that begins paying guaranteed income right away, often for life, converting savings into a pension-like stream of payments. |
| SR-22 | SR-22 certificate of financial responsibility | Form filed by an auto insurer with a state motor vehicle agency to prove that a high-risk driver carries at least the minimum required liability insurance. |
| STD | Short-term disability insurance | Insurance that replaces part of an employee's income, often 50% to 70%, for a few weeks to several months when illness, injury or childbirth prevents work. |
| TPA | Third-party administrator | Company that handles administrative work for self-funded employer health plans, such as processing claims, managing enrollment, providing customer service and arranging… |
| TPFT | Third party, fire and theft | Middle level of UK motor insurance, covering liability for injury and damage to others plus loss or damage to the policyholder's own car from fire or theft, but not… |
| UBI | Usage-based insurance | Auto insurance priced on actual driving, collected through a smartphone app, plug-in device or connected car data, measuring factors such as mileage, hard braking… |
| UIM | Underinsured motorist coverage | Auto insurance that pays when an at-fault driver has insurance but not enough to cover the victim's injuries. |
| UL | Universal life insurance | Permanent life insurance with flexible premiums and a cash value account that earns interest, letting policyholders adjust payments and death benefits within limits. |
| UM | Uninsured motorist coverage | Auto insurance that pays for injuries to the policyholder and passengers, and in some states vehicle damage, when the at-fault driver has no liability insurance or in a… |
| UW | Underwriting | Process of evaluating and pricing risk to decide whether to offer insurance or a loan and on what terms, and by extension the underwriter or underwriting department… |
| VUL | Variable universal life | Universal life policy whose cash value is invested in subaccounts similar to mutual funds, offering market growth potential but no guaranteed minimum return. |
| WC | Workers' compensation | Insurance employers buy, required in nearly every US state, that pays medical care, lost wages, rehabilitation and death benefits to employees injured or made ill by… |
| WL | Whole life insurance | Permanent life insurance with fixed premiums, a guaranteed death benefit and guaranteed cash value growth for the insured's entire life. |
| WOS | Waiver of subrogation | Endorsement or contract clause in which an insurer gives up its right to recover a claim payment from a third party who caused the loss, often required in construction… |
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