A glossary of commonly used general insurance and risk management terms.

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DECLARATIONS (DEC SHEET) – A term used in insurance for the portion of the contract which contains information such as the name and address of the insured, the property insured, its location and description, the policy period, the amount of insurance coverage, applicable premiums, and supplemental representations by the insured.

  •  the types of coverage you have elected;
  •  the limit for each coverage;
  • the cost for each coverage;
  • the types of coverage for each location covered by the policy; and
  • other information applicable to the policy.

DEDUCTIBLE – The portion of a loss that you are required to pay before your insurance coverage will respond. Deductibles can be used to reduce your physical damage premiums. For example, if you owned a policy with a $200 deductible and you suffered a covered loss totaling $1,000, you would pay the first $200 and the insurance company would pay the remaining $800. If the loss were only $200, you would pay the entire amount and the insurance company would pay nothing.

DEPRECIATION – Decrease in the value of property over a period of time due to use, wear, tear, and obsolescence. For example, if you paid $500 for a television set five years ago, its current value minus depreciation might be only $125.

DIFFERENCE IN CONDITIONS INSURANCE – A policy insuring against losses not usually covered by Fire and Business Interruption policies such as those caused by flood, earthquake, landslide and other unusual accidental occurrence. Applicable mostly to large commercial and industrial organizations, and performs much the same functions in property insurance that the Umbrella Liability does for liability coverage.

DIRECT LOSS (OR DAMAGE) – A loss, which is a direct consequence of a particular peril. Fire damage to a refrigerator would be a direct loss. Spoiling of food in the refrigerator as a result of the fire damage would be an indirect loss.

DIRECT WRITER – An insurance company, which sells its policies through salaried employees (licensed agents) who represent it exclusively, rather than through independent local agents, who represent several insurance companies.

DUAL OBLIGEE – More than one obligee on a surety bond. It may be two owners or an owner and a financial institution or an owner and a municipality, etc.

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