Dictionary of Insurance Terms -D-

-D-

• Damage to Property of Others:
  Damage covered up to $500 per occurrence for an insured who damages another’s
  property. Payment is made despite the lack of legal liability. Coverage
  is included in Section II of the homeowners policy.


• Debenture: A bond that is backed only by
  the general credit of the issuing corporation. No specific property is
  pledged as security behind the loan.


• Declarations: Statements in an insurance
  contract that provide information about the property or life to be insured
  and used for underwriting and rating purposes and identification of the
  property or life to be insured.


• Declination: The insurer’s refusal to
  insure an individual after careful evaluation of the application for insurance
  and any other pertinent factors.


• Deductible: An amount which a policyholder
  agrees to pay, per claim or per accident, toward the total amount of an
  insured loss.


• Dental Insurance: Individual or group
  plan that helps pay costs of normal dental care as well as damage to teeth
  from an accident.


• Dependent Benefits: Social Security
  benefits available to the spouse or children of a Social Security beneficiary.


• Deposit Premium: The premium deposit
  paid by a prospective policy holder when an application is made for an
  insurance policy. It is usually equal, at least, to the first month’s estimate
  premium and is applied toward the actual premium when billed.


• Depreciation: A decrease in the value
  of property over a period of time due to wear and tear or obsolescence.
  Depreciation is used to determine the actual cash value of property at
  time of loss. (See Actual Cash Value)


• Difference in
  Conditions Insurance (DIC): “All-risks” policy that covers other perils
  not insured by basic property insurance contracts, supplemental to and
  excluding the coverage provided by underlying contracts.


• Direct Loss: Financial loss that results
  directly from an insured peril.


• Direct Placement: Sale of an entire
  issue of bonds or stock by the issuer to one or a few large institution
  customers such as an insurance company without trying to market the issue
  publicly.


• Direct Premiums Written: Property
  and casualty insurance premiums written (less return premiums), without
  any allowance for premiums for assumed or ceded reinsurance.


• Direct Response System: A marketing
  method where insurance is sold without the services of an agent. Potential
  customers are solicited by advertising in the mail, newspapers, magazines,
  television, radio, and other media.


• Direct Writer: The industry term for
  a company which uses its own sales employees to write its policies. Sometimes
  refers to companies which contract with exclusive agents.


• Directors’ and Officers’ Liability:
  the exposure of corporate managers to claims from shareholders, government
  agencies, and employees, and others alleging mismanagement.


• Disability: a physical or a mental impairment
  that substantially limits one or more major life activities of an individual.
  It may be partial or total. (See Partial Disability; Total Disability.)


• Disability Benefit: Periodic payments,
  usually monthly, payable to participants under some retirement plans, if
  such participants are eligible for the benefits and become totally and
  permanently disabled prior to the normal retirement date.


• Disability Income Insurance:
  A form of health insurance that provides periodic payments to replace income
  when an insured person is unable to work as a result of illness, injury,
  or disease.


• Disappearing Deductible: Deductible
  in an insurance contract that provides for a decreasing deductible amount
  as the size of the loss increases, so that small claims are not paid but
  large losses are paid in full.


• Dismemberment: Loss of body members
  (limbs), or use thereof, or loss of sight due to injury.


• Disposable Personal Income:
  The personal income less personal tax and nontax payments. It is the income
  available to people for spending and saving.


• Dividend: A return of part of the premium
  on participating insurance to reflect he difference between the premium
  charged and the combination of actual mortality, expense and investment
  experience. Such premiums are calculated to provide some margin over the
  anticipated cost of the insurance protection.


• Dividend: (1) An amount returned to a policyholder
  by an insurance company out of its earnings. (2) In capital stock companies,
  a share of the profits distributed to stockholders.


• Dividend: Portion of the premium which is
  returned to the insured because of favorable experience by the company.


• Dividend: A policy holder’s share in the
  insurer’s divisible surplus fund apportioned for distribution, which may
  take the form of a refund of part of the premium on a participating policy.
  The term is also used for a stockholder’s share of the portion of a corporation’s
  earnings that is distributed in cash or additional stock.


• Dollar Threshold: In no-fault auto
  insurance states with the dollar threshold, it prevents individuals from
  suing in tort to recover for pain and suffering unless their medical expenses
  exceed a certain dollar amount.


• Domestic Insurer: An insurance company
  is a domestic company in the state in which it is incorporated.


• Donor: The person making a gift.


• Dramshop Law: Law that imputes negligence
  to the owner of a business that sells liquor in the case that an intoxicated
  customer causes injury or property damage to another person. Usually excluded
  from general liability policies.


• Dread Disease Insurance: Insurance
  providing an unallocated benefit, subject to a maximum amount, for expenses
  incurred in connection with the treatment of specified diseases, such as
  cancer, poliomyelitis, encephalitis and spinal meningitis.


• Driver Education Credit: Student
  discount or reduction in premium amount for which young drivers become
  eligible on completion of a driver education course.


• Dwelling Property 1: Property
  insurance policy that insures the dwelling at actual cash value, other
  structures, personal property, fair rental value, and certain other coverages.
  Covers a limited number of perils.


• Dwelling Property 2: Property insurance
  policy that insures the dwelling and other structures at replacement cost.
  It adds additional coverages and has a greater list of covered perils than
  the Dwelling Property 1 policy.


• Dwelling Property 3: Property
  insurance policy that covers the dwelling and other structures against
  direct physical loss from any peril except for those perils otherwise excluded.
  However, personal property is covered on a named-perils basis.