Glossary of Payday Loan Related Terms

Absolute Liability

Liability for damages even though fault or negligence cannot be proven.

Accident

An event or occurrence which is unforeseen and unintended.

Additional insured

An assured party specifically named under an insurance policy.

Adjuster

A person who investigates and settles losses for an insurance carrier.

Adjusting

The process of investigating and settling losses with or by an insurance carrier.

Adverse Selection

The tendency of persons who present a poorer-than-average risk to apply for, or continue, insurance to a greater extent than do persons with average or better-than-average expectations of loss.

Age Limits

Stipulated minimum and maximum ages below and above which the company will not accept applications or may not renew policies.

Agent

An insurance company representative licensed by the state who solicits, negotiates or effects contracts of insurance, and provides service to the policyholder for the insurer.

All-risks Policy

Coverage by an insurance contract that promises to cover all losses except those losses specifically excluded in the policy.

Amendment

A formal document changing the provisions of an insurance policy signed jointly by the insurance company officer and the policy holder or his authorized representative.

Amortization

Paying an interest-bearing liability by gradual reduction through a series of installments, as opposed to one lump-sum payment.

Assurance (Insurance)

These terms are today generally accepted as synonymous, although not originally so. The term "assurance" is used more commonly in Ca and Great Britain than in the United States.

Automobile Liability Insurance

Protection for the insured against financial loss because of legal liability for car-related injuries to others or damage to their property.

Automobile Physical Damage Insurance

Coverage to pay for damage to or loss of an insured automobile resulting from collision, fire, theft, or other perils.

Automobile Reinsurance Facility

One of several types of "shared market" mechanisms where persons who are unable to obtain such insurance in the voluntary market are assigned to a particular company, usually at a higher rate than the voluntary market. Formerly called "Assigned Risk."