Actuary:

A professional who assesses and manages financial risks and uncertainties, often employed by insurance companies to determine premium rates, reserves, and other statistical data.

Additional Insured:

An individual or entity added to an insurance policy who is also protected by the coverage provided by the policy, typically for a specific interest or liability exposure.

Adjuster:

An individual who investigates and evaluates insurance claims on behalf of the insurance company, determining the extent of coverage and the amount of compensation.

Adverse Selection:

The tendency for individuals with a higher risk of loss or a greater likelihood of making a claim to seek or maintain insurance coverage more than those with lower risk.

Agent:

A licensed representative of an insurance company who sells and services insurance policies on behalf of the insurer.

Annual Policy:

An insurance policy that is effective for one year and must be renewed annually to maintain coverage.

Appraisal:

The process of assessing the value of property, goods, or damages for insurance purposes, typically conducted by a qualified appraiser.

Assets:

Resources, such as cash, investments, properties, or valuables owned by an individual, company, or organization, which have financial value.

Assignment of Benefits:

The transfer of an insurance policyholder’s rights to receive benefits or claim payment to another party, such as a healthcare provider or repair contractor.

Auto Insurance:

Insurance coverage that protects against financial loss or damage resulting from accidents, theft, or other incidents involving automobiles.

Beneficiary: A person or entity designated to receive the benefits of an insurance policy or financial arrangement upon the insured’s death or another triggering event.

Binder:

A temporary or preliminary agreement of insurance coverage provided by an insurance company until a formal policy is issued.

Bodily Injury Liability:

Coverage that pays for the medical expenses, legal costs, and compensation for pain and suffering resulting from injuries caused to others by the insured.

Broker:

An intermediary who represents the insured and helps them find suitable insurance coverage from various insurance companies.

Business Interruption Insurance:

Coverage that compensates a business for income lost as a result of a covered event that disrupts normal operations, such as a fire or natural disaster.

Business Liability Insurance:

Coverage that protects a business against financial losses resulting from claims of injury or damage caused to others by the business or its products or services.

Claim:

A formal request made by an insured person or policyholder to an insurance company for

The cost-sharing arrangement in which the policyholder and the insurance company share the covered expenses in a specified ratio after the deductible has been met.

 Comprehensive Coverage:

Auto insurance coverage that protects against damage to a vehicle caused by something other than a collision, such as theft, vandalism, fire, or natural disasters.

Coverage:

The scope and extent of protection provided by an insurance policy, including specific risks, events, or circumstances covered.

Collision Coverage:

Auto insurance coverage that pays for damage to a vehicle caused by a collision with another object or vehicle.

Certificate of Insurance:

A document that provides evidence of insurance coverage, including the policyholder’s name, policy details, and limits of coverage.

Cancellation:

The termination of an insurance policy before its expiration date by either the policyholder or the insurance company.

Claim Adjuster:

An individual employed by an insurance company who investigates and assesses the validity and value of an insurance claim.

Coverage Limit:

The maximum amount that an insurance company will pay for a covered loss or event as stated in the insurance policy.

Collision Damage Waiver (CDW):

Optional coverage offered by rental car companies that relieves the renter of financial responsibility for damage or loss to the rental vehicle.

Deductible:

The amount of money an insured individual or policyholder is required to pay out-of-pocket before the insurance company begins to cover the remaining costs or expenses.

Declarations Page:

A section of an insurance policy that provides key information about the insured, policy details, coverage limits, and premium amounts.

Depreciation:

The decrease in the value of an asset over time due to factors such as age, wear and tear, or obsolescence. Depreciation may affect the amount of compensation received in an insurance claim.

Disability Insurance:

Coverage that provides income replacement or benefits to individuals who are unable to work due to a disability or illness.

Dwelling Coverage:

Insurance coverage that protects the structure of a home or dwelling against covered perils, such as fire, vandalism, or wind damage.

 Endorsement:

Also known as a rider or addendum, an endorsement is a written modification or amendment to an insurance policy that changes its terms, conditions, or coverage.

Exclusion:

A provision in an insurance policy that specifies certain perils, risks, or circumstances that are not covered by the policy.

Excess Coverage:

Additional insurance coverage that becomes effective after the primary insurance policy’s limits have been exhausted.

Expiration Date:

The date on which an insurance policy or coverage period ends unless it is renewed or extended.

Errors and Omissions Insurance (E&O):

Professional liability insurance that protects individuals or businesses in the event of negligence, errors, or mistakes made while providing professional services.

Earned Premium:

The portion of the premium that an insurance company has earned by providing coverage for a specific period of time.

Effective Date:

The date on which an insurance policy becomes active and coverage begins.

Excess and Surplus Lines Insurance:

Coverage for risks that are difficult to insure through traditional insurance markets, often provided by specialized insurers known as surplus lines insurers.

Fraud:

Intentional deception or misrepresentation made by an individual or entity to obtain benefits or advantages to which they are not entitled, resulting in false claims or false information provided to an insurer.

Flood Insurance:

Coverage that protects against property damage and losses caused by flooding, typically provided as a separate policy or as an endorsement to a homeowner’s insurance policy.

Fire Insurance:

Coverage that protects against property damage and losses caused by fire and related perils, such as smoke, explosions, or lightning.

Full Coverage:

Refers to insurance policies that provide comprehensive protection by combining different types of coverage, such as liability, collision, and comprehensive, for an insured asset or property.

Franchise Insurance:

Insurance coverage specifically designed for franchises, providing protection for the unique risks associated with operating a franchise business.

Force Majeure:

A clause in an insurance policy that excuses performance or non-performance of certain contractual obligations due to unforeseen and extraordinary events, such as natural disasters or acts of God.

Fidelity Bond:

Insurance coverage that protects businesses from financial losses resulting from fraudulent acts committed by their employees, such as theft, embezzlement, or forgery.

Grace Period:

A specified period of time after the premium due date during which an insurance policy remains in force and the premium can still be paid without penalty or coverage lapsing.

Guaranteed Issue:

A type of insurance policy that is issued to an applicant without requiring medical underwriting or assessment of health conditions.

Group Insurance:

Insurance coverage provided to a group of individuals, such as employees of a company or members of an organization, typically offering more favourable terms and rates compared to individual policies.

General Liability Insurance:

Coverage that protects individuals or businesses against financial losses resulting from claims of bodily injury, property damage, or personal injury caused by the insured’s operations, products, or premises.

Grace Period:

A specified period of time after the premium due date during which an insurance policy remains in force and the premium can still be paid without penalty or coverage lapsing.

Guaranteed Issue:

A type of insurance policy that is issued to an applicant without requiring medical underwriting or assessment of health conditions.

Group Insurance:

Insurance coverage provided to a group of individuals, such as employees of a company or members of an organization, typically offering more favorable terms and rates compared to individual policies.

General Liability Insurance:

Coverage that protects individuals or businesses against financial losses resulting from claims of bodily injury, property damage, or personal injury caused by the insured’s operations, products, or premises.

Grace Period:

A specified period of time after the premium due date during which an insurance policy remains in force and the premium can still be paid without penalty or coverage lapsing.

Guaranteed Issue:

A type of insurance policy that is issued to an applicant without requiring medical underwriting or assessment of health conditions.

Health Insurance:

Coverage that provides financial protection for medical expenses, including hospitalization, doctor visits, prescription drugs, and other healthcare services.

Homeowners Insurance:

Insurance coverage that protects the physical structure of a home, personal belongings, and provides liability coverage for accidents that occur on the property.

Hazard:

A condition or situation that increases the likelihood of a loss or damage occurring. Hazards can be physical, moral, or legal in nature.

 I

Indemnity:

The principle of insurance that states the insured should be restored to the same financial position they were in prior to the occurrence of a covered loss, without gaining a financial profit.

Insurable Interest:

A financial or legal interest that an individual or entity possesses in the subject matter of an insurance policy, providing a basis for insuring the risk.

Insured:

The person or entity covered by an insurance policy and entitled to receive the benefits and protections provided by the policy.

K

Key Person Insurance:

Coverage that provides financial protection to a business in the event of the death or disability of a key employee or owner whose expertise, knowledge, or leadership is crucial to the company’s success.

Known Loss:

A loss or event that has already occurred or is already known before the insurance policy is issued. Insurance policies typically do not provide coverage for known losses.

Kidnap and Ransom Insurance:

Coverage that protects individuals, families, or businesses against the financial losses resulting from kidnapping, extortion, or ransom demands.

L

Liability Insurance:

Coverage that protects an individual or business against financial losses resulting from claims of injury or damage caused to others by the insured’s actions or negligence.

Loss Control:

Measures or actions taken by an insured individual or business to prevent or minimize the occurrence of losses, such as implementing safety protocols, training programs, or security measures.

Loss Ratio:

The ratio of incurred losses and loss adjustment expenses to earned premiums, used as a measure of an insurance company’s profitability and claims experience.

Lapse:

The termination or expiration of an insurance policy due to non-payment of premiums within the specified grace period.

Life Insurance:

Coverage that provides a death benefit to the beneficiaries upon the death of the insured individual, typically used to provide financial protection for loved ones and cover expenses after the insured’s passing.

Long-Term Care Insurance:

Coverage that helps individuals cover the costs associated with long-term care services, such as nursing home care, assisted living, or in-home care.

Loss Adjustment Expenses:

The costs incurred by an insurance company in the process of investigating, evaluating, and settling insurance claims, including legal fees, appraisals, and administrative expenses.

Malpractice Insurance:

Coverage designed for professionals in fields such as medicine, law, or accounting to protect against claims of professional negligence, errors, or omissions.

Material Misrepresentation:

Providing false or inaccurate information to an insurance company during the application process, which can result in denial of coverage or policy cancellation.

Medical Payments Coverage:

An optional coverage in auto insurance policies that pays for medical expenses resulting from an accident, regardless of fault.

Moral Hazard:

The increased risk of loss or damage that arises due to the insured’s dishonesty, lack of integrity, or unethical behaviour.

Multiple Peril Insurance:

A policy that combines multiple coverages into a single policy, providing protection against multiple risks or perils.

Mutual Insurance Company:

An insurance company owned by its policyholders, who share in the profits and losses of the company.

Market Value:

The current value of an insured property or asset in the open market, which is used to determine the coverage amount or claim settlement.

Maximum Limit:

The highest amount an insurance policy will pay for a covered loss or claim, as specified in the policy contract.

Misrepresentation:

Providing false or misleading information to an insurance company, which can void the policy or result in denial of coverage.

Mortgage Insurance:

Insurance coverage that protects the lender in the event the borrower defaults on a mortgage loan, typically required for loans with a higher loan-to-value ratio.

Named Insured:

The individual or entity specifically identified as the insured party in an insurance policy, typically the policyholder.

Negligence:

Failure to exercise the level of care or caution that a reasonable person would in similar circumstances, resulting in harm or damage to others.

Non-Admitted Insurer:

An insurance company that is not licensed or authorized to do business in a particular jurisdiction but may still provide coverage through surplus lines or excess and surplus lines insurance.

Non-Renewal:

The decision by an insurance company not to renew a policy once it reaches its expiration date, typically due to changes in risk factors or underwriting criteria.

No-Fault Insurance:

An insurance system where each party’s own insurance company covers their losses regardless of who is at fault in an accident, typically related to auto insurance.

Notice of Loss:

A formal notification provided by the insured to the insurance company to report a loss or claim covered by the policy.

Nuclear Hazard Insurance:

Coverage that specifically addresses risks related to nuclear energy, such as damage from nuclear accidents or radiation exposure.

Nuisance:

A condition or activity that causes inconvenience, annoyance, or interference with the use and enjoyment of property, which may be covered under certain liability insurance policies.

Named Perils:

Specific risks or perils that are listed and covered by an insurance policy, as opposed to an all-risk policy that covers any risk not specifically excluded.

Net Premiums Written:

The total amount of premiums received by an insurance company after deducting premiums paid to reinsurers and premiums ceded to other insurance companies.

Occurrence:

An event or incident that results in an insured loss or claim during the policy period.

Open Enrollment:

A specific period during which individuals can enroll in or make changes to their health insurance coverage without a qualifying event.

Out-of-Network:

Healthcare providers or facilities that do not have a contract or agreement with an insurance company, resulting in higher out-of-pocket costs for policyholders who seek services from them.

Overinsurance: When the coverage amount of an insurance policy exceeds the actual value of the insured property or the potential loss that could occur.

Own Occupation:

A type of disability insurance that provides benefits if the insured individual becomes unable to perform the duties of their specific occupation, rather than any occupation.

Owner’s Policy:

A type of title insurance that protects the property owner against title defects or claims that may arise after the property is purchased.

Occurrence Policy:

An insurance policy that covers claims for incidents that occur during the policy period, regardless of when the claim is reported.

Original Equipment Manufacturer (OEM) Parts:

Replacement parts made by the manufacturer of the insured item, typically used in auto insurance claims to restore damaged vehicles to their original condition.

Open Perils:

An insurance policy that covers all risks or perils except those that are specifically excluded in the policy language.

Optional Coverage:

Additional coverage options that can be added to an insurance policy beyond the basic or standard coverage.

Policy:

A contract between an insurance company and an insured individual or entity, outlining the terms and conditions of the insurance coverage.

Premium:

The amount of money paid by the insured to the insurance company in exchange for insurance coverage.

Policyholder:

The individual or entity that owns an insurance policy and has the rights and responsibilities outlined in the policy.

Property Insurance:

Coverage that protects against damage, loss, or theft of physical property, such as homes, buildings, or belongings.

Personal Injury Protection (PIP):

A type of auto insurance coverage that pays for medical expenses and other costs resulting from injuries sustained in a car accident, regardless of fault.

Peril:

A specific event or cause of loss that is covered by an insurance policy, such as fire, theft, or natural disasters.

Professional Liability Insurance:

Coverage that protects professionals, such as doctors, lawyers, or architects, against claims of negligence, errors, or omissions in the performance of their professional duties.

Policy Limit:

The maximum amount of coverage provided by an insurance policy for a specific type of loss or claim.

Proof of Loss:

A formal document provided by the insured to the insurance company, detailing the extent and value of a loss or claim.

Pre-Existing Condition:

A medical condition that existed before the start of a health insurance policy, which may affect coverage or require additional underwriting.

Qualified Annuity:

An annuity that meets specific requirements outlined by the Internal Revenue Service (IRS) for tax-deferred treatment.

Quote:

An estimate of the premium cost and coverage terms provided by an insurance company to a prospective policyholder based on the information provided.

Quota Share Reinsurance:

A type of reinsurance arrangement where the reinsurer agrees to assume a predetermined percentage of the risk and pay a corresponding percentage of the premiums.

 Qualifying Event:

An event that triggers a special enrollment period or allows for changes to be made in health insurance coverage outside of the regular enrollment period, such as marriage, birth/adoption of a child, or loss of coverage.

Quantum:

The amount of damages or loss suffered by the insured, which is a key factor in determining the amount of compensation to be paid by the insurer.

Quitclaim Deed:

A legal document used to transfer ownership or interest in a property without making any warranties or guarantees about the title.

Quick Claim Settlement:

The prompt and efficient resolution of an insurance claim by the insurer, resulting in a speedy payment to the insured.

Quiet Enjoyment:

A provision in a property insurance policy that ensures the policyholder’s right to use and enjoy the insured property without interference or disruption.

Quotation:

A formal offer or proposal provided by an insurance company to a prospective policyholder, outlining the terms, conditions, and pricing for the requested coverage.

Qualifying Period:

The initial period of time after an insurance policy is issued during which certain coverages, such as pre-existing conditions, may not be eligible for claims.

Risk:

The possibility of loss or uncertainty of an event occurring that could result in financial loss or damage.

Reinsurance:

The process by which an insurance company transfers a portion of its risk to another insurance company, known as the reinsurer, in exchange for a premium.

Renewal:

The continuation of an insurance policy after its initial term has expired, typically with the option to renew for subsequent periods.

Rider:

Also known as an endorsement or an addendum, a rider is a document that modifies or adds coverage to an existing insurance policy.

Replacement Cost:

The cost to replace or repair damaged property with a new item of similar kind and quality, without deducting for depreciation.

Risk Management:

The process of identifying, assessing, and managing risks to minimize potential losses or damages.

Reservation of Rights:

A statement by an insurance company that it is reserving its right to investigate a claim further before making a coverage decision.

Rate:

The price of insurance coverage per unit of exposure, typically based on various factors such as risk, location, and the insured’s characteristics.

Retroactive Date:

The specific date from which coverage under a claims-made insurance policy applies to claims arising from incidents that occurred prior to the policy’s inception.

Return Premium:

The portion of the premium that is refunded to the insured if the insurance policy is cancelled before its expiration date or if there is a reduction in risk.

Subrogation:

The process by which an insurance company assumes the rights of the insured and seeks reimbursement from a responsible third party for losses paid to the insured.

Salvage:

The damaged property or goods that have been recovered by an insurance company after a loss and can be sold to recover a portion of the claim payment.

Sum Insured:

The maximum amount of money that an insurance policy will pay out in the event of a covered loss.

Self-Insurance:

A risk management strategy in which a company or individual assumes the financial responsibility for potential losses rather than purchasing insurance coverage.

Surrender Value:

The amount of money that an insurance policyholder receives if they surrender or cancel their life insurance policy before its maturity or expiration.

Surety Bond:

A contract in which a surety company guarantees the performance or payment obligations of another party, typically required in certain business or legal transactions.

Standard Deviation:

A statistical measure that indicates the extent of variation or volatility from the average or expected outcome in insurance underwriting and risk assessment.

Special Perils:

Specific risks or perils that are explicitly listed and covered by an insurance policy, as opposed to an all-risk policy that covers any risk not specifically excluded.

Sublimit:

A provision in an insurance policy that places a maximum limit on the amount of coverage available for a particular type of loss or damage.

Surplus Lines Insurance:

Coverage for risks that cannot be obtained from standard insurance companies and are placed with non-admitted insurers or specialized surplus lines carriers.

Term Insurance:

Life insurance coverage that provides protection for a specific period, typically a predetermined number of years, known as the term.

Third-Party Liability:

The legal responsibility of an insured party to compensate a third party for injury, damage, or loss caused by the insured’s actions or negligence.

Total Loss:

A situation where the cost of repairing or replacing damaged property exceeds its insured value, resulting in a complete loss and payment of the policy limit.

TPA (Third-Party Administrator):

An organization or company that manages and administers claims, benefits, and other administrative tasks on behalf of an insurance company or employer.

Terrorism Insurance:

Coverage that protects against losses resulting from acts of terrorism, such as bombings, hijackings, or other malicious activities.

Travel Insurance:

Insurance coverage specifically designed to protect against unexpected events or emergencies that may occur while traveling, such as trip cancellation, medical expenses, or lost luggage.

Tort:

A wrongful act or negligence by one party that causes injury, damage, or loss to another party, resulting in a legal liability for the responsible party.

Term Life Insurance:

A type of life insurance that provides coverage for a specified term or period, usually with a level premium and death benefit.

Title Insurance:

Insurance that protects the policyholder against financial loss due to defects or disputes in the ownership of real estate property.

Underwriting:

The process by which an insurance company assesses the risks associated with an applicant and determines the terms, conditions, and premium for providing coverage.

Underwriter:

An individual or entity responsible for evaluating risks and determining the terms, conditions, and premium for insurance coverage.

Umbrella Insurance:

A type of liability insurance that provides additional coverage beyond the limits of other primary insurance policies, offering protection against catastrophic losses or lawsuits.

Uninsured Motorist Coverage:

Auto insurance coverage that protects policyholders if they are involved in an accident with a driver who does not have insurance or lacks sufficient coverage.

Underinsured Motorist Coverage:

Auto insurance coverage that protects policyholders if they are involved in an accident with a driver who has insurance, but the coverage limits are insufficient to cover the damages.

Utmost Good Faith:

A principle in insurance contracts requiring both the insured and the insurer to disclose all material facts honestly and in good faith during the application and underwriting process.

Usual, Customary, and Reasonable (UCR):

A method used by health insurance providers to determine the maximum amount they will reimburse for a particular medical service or procedure based on prevailing rates in a specific geographic area.

Unearned Premium:

The portion of a premium that has been paid in advance but has not yet been “earned” by the insurance company because the policy period is still in effect.

Underinsured:

Refers to a situation where an individual or entity has insurance coverage, but the policy limits are inadequate to cover the full extent of a loss or claim.

Unoccupied:

Refers to a property that is vacant and not being used by the owner or occupants, typically for a specific period of time, which may impact coverage or require special insurance considerations.

Universal Life Insurance:

A type of permanent life insurance that combines a death benefit with a savings component, allowing policyholders to build cash value over time while maintaining flexibility in premium payments and death benefit coverage.

Variable Life Insurance:

A type of permanent life insurance that allows policyholders to allocate a portion of their premium payments into investment accounts, with the cash value and death benefit varying based on the performance of the investments.

Valuation:

The process of determining the value of an asset or property for insurance purposes, typically conducted by an appraiser or underwriter.

Vehicle Insurance:

Insurance coverage specifically designed to protect against losses or damages to vehicles, including cars, motorcycles, trucks, and other types of vehicles.

Voluntary Benefits:

Optional benefits offered by employers that employees can choose to enroll in or purchase, typically at their own cost, such as supplemental health insurance, disability coverage, or dental insurance.

Vacancy Clause:

A provision in an insurance policy that outlines the conditions under which coverage may be reduced or restricted if a property remains vacant or unoccupied for a specified period of time.

Viatical Settlement:

A financial arrangement where a terminally ill policyholder sells their life insurance policy to a third party, who then assumes the premiums and receives the death benefit upon the insured’s passing.

Valued Policy:

An insurance policy that pays a predetermined or fixed amount in the event of a total loss, without requiring an assessment or proof of the actual value of the insured property.

Vicarious Liability:

Legal responsibility imposed on one party for the actions or omissions of another party, typically seen in cases where an employer is held liable for the actions of their employees.

Variable Annuity:

An annuity contract that allows the policyholder to invest in a range of underlying investment options, with the value of the annuity fluctuating based on the performance of those investments.

Verification of Loss:

The process by which an insurance company investigates and confirms the details and extent of a reported loss or claim to determine the appropriate coverage and settlement.

Waiver:

The voluntary relinquishment or surrender of a right or privilege, often used in insurance to refer to the waiver of premium, where the policyholder is no longer required to pay premiums under certain circumstances, such as disability or critical illness.

Waiting Period:

The specified period of time that must pass before certain insurance benefits or coverage become effective, typically seen in health insurance policies for pre-existing conditions or disability insurance for claims eligibility.

Whole Life Insurance:

A type of permanent life insurance that provides coverage for the entire lifetime of the insured, with a cash value component that grows over time and can be accessed by the policyholder.

Workers’ Compensation:

A form of insurance that provides wage replacement and medical benefits to employees who suffer work-related injuries or illnesses, while protecting employers from potential lawsuits related to workplace accidents.

Warranty:

A provision or condition included in an insurance policy that requires the insured party to adhere to specific requirements or take certain actions to maintain coverage, often related to property maintenance or risk mitigation.

Wrap-Up Insurance:

Also known as Owner-Controlled Insurance Programs (OCIP) or Contractor-Controlled Insurance Programs (CCIP), wrap-up insurance is a type of liability insurance that provides coverage for all contractors and subcontractors working on a specific construction project.

Write-off:

The accounting practice of recognizing a loss or expense in an insurance company’s financial statements by removing or reducing the value of an asset, typically due to a total loss or uncollectible amount.

Wage and Hour Insurance:

Coverage designed to protect employers against claims related to wage and hour violations, such as unpaid wages, overtime, or employee misclassification.

Windstorm Insurance:

Insurance coverage that specifically protects against damage caused by windstorms, including hurricanes, cyclones, tornadoes, or severe storms.

Waiver of Subrogation:

A contractual provision that prevents an insurance company from seeking reimbursement or pursuing legal action against a third party who may be responsible for a loss covered under the policy.

Y

Yearly Renewable Term (YRT) Insurance:

A type of term life insurance policy that is renewed on a yearly basis, with the premiums typically increasing each year as the insured person gets older.

Yield:

In insurance and investment contexts, yield refers to the return or earnings generated by an investment or insurance product, typically expressed as a percentage.

Yellow Card:

Also known as an International Certificate of Motor Insurance, the yellow card is a document used as proof of insurance coverage for vehicles traveling across international borders.

Yield Curve:

A graphical representation of the relationship between the interest rates and the maturity dates of a set of fixed-income securities, such as bonds. The yield curve is often used to assess market expectations and economic conditions.

Young Driver Surcharge:

In auto insurance, a young driver surcharge is an additional fee or premium charged to policyholders who are young and have limited driving experience, as they are considered higher risk by insurance companies.

Z

Zero Depreciation:

Zero Depreciation, also known as Nil Depreciation or Bumper-to-Bumper coverage, is an add-on feature in vehicle insurance that provides coverage for the full cost of replacing damaged parts without deducting depreciation. It is particularly beneficial for new vehicles and helps policyholders receive higher claim settlements.