Dictionary of Insurance Terms -F-

-F-

• 
  Facility: A pooling mechanism for insureds
  not able to obtain insurance in the voluntary market. Insurers write and
  issue policies but cede premium and losses on those policies to a central
  pool in which all insurers share.


• 
  Factory Mutual: Mutual insurance company
  insuring only properties that meet high underwriting standards. Emphasizes
  loss prevention.


• 
  Facultative Reinsurance: A
  type of reinsurance in which the reinsurer can accept or reject any risk
  presented by an insurance company seeking reinsurance.


• 
  FAIR Plan: A facility, operating under a
  program of the government and the insurance industry, to make fire insurance
  and other forms of property insurance readily available to persons and
  businesses for whom such insurance is not easily available or affordable.


• 
  Fair Rental Value: Amount payable
  to an insured homeowner for loss of rental income due to damage that makes
  the premises uninhabitable.


• 
  Family Purpose Doctrine: Concept
  that imputes negligence committed by immediate family members while operating
  a family car to the owner of the car.


• 
  Farm Mutual: Local mutual insurance company
  that insures farm property in a limited geographical area primarily through
  assessable policies.


• 
  Farm owners- Ranch owners
  Policy: A package policy for a farm or a ranch, providing property
  and liability coverages against personal and business losses.


• 
  Federal Crime Insurance: Insurance
  against burglary, larceny, and robbery losses offered by the federal government
  where the Federal Insurance Administration has determined that an insurance
  availability problem exists.


• 
  Federal Crop Insurance: Comprehensive
  coverage at rates subsidized by the federal government for unavoidable
  crop losses, including those that result from hail, wind, excessive rain,
  drought, freezes, plant disease, snow, floods, and earthquake.
• 
  Federal Flood Insurance: Insurance
  sold by private insurers with rates subsidized by the federal government
  to persons who reside in flood zones and whose community joins the program
  and agrees to establish and enforce flood control and land use measures.
• 
  Federal Surety Bond: Type of surety
  bond required by federal agencies that regulates the actions of business
  firms. It guarantees that the bonded party will comply with federal standards,
  pay all taxes or duties accrued, or pay any penalty if the bondholder fails
  to pay.
• 
  Federal servant Doctrine:
  Common law defense blocking an injured employee from collecting workers
  compensation benefits if he or she sustained an injury caused in any way
  by the negligence of a fellow worker.
• 
  Fidelity Bond: A form of protection
  which reimburses an employer for losses caused by dishonest or fraudulent
  acts of employees.
• 
  Fiduciary: A person who holds something
  in trust for another.
• 
  Financial Responsibility
  Law: A state law under which a person involved in an automobile accident
  may be required to furnish security up to certain minimum dollar limits.
• 
  Financial Responsibility
  Law: A state law which may require motorists to furnish evidence, either
  before or after involvement in an auto accident (depending on the individual
  state’s law), of ability to pay for damages up to certain minimum dollar
  limits. These requirements commonly are met by carrying auto liability
  insurance with specified minimum limits or more.
• 
  Fire: A combustion accompanied by a flame or
  glow, which escapes its normal confines to cause damage.
• 
  Fire Insurance: Coverage for losses
  caused by fire and lightning, plus resultant damage caused by smoke and
  water.
• 
  Fire Legal Liability: Liability
  of a firm or person for fire damage caused by negligence of and damage
  to property of others. First party
  claim: a demand made by a policyholder reporting an insured event directly
  to his company.
• 
  First Party Coverage: An insurance
  coverage under which the policyholder collects compensation for losses
  from the insured’s own insurer rather than from the insurer of the person
  who caused the accident.

• Flat Schedule: A type of schedule in
  group insurance under which everyone is insured for the same benefits regardless
  of salary, position, or other circumstances.

• 
  Flex rating Law: Type of rating law
  in which prior approval of the rates is required only if the rates exceed
  a certain percentage above and below the rates previously filed.
• 
  Floaters: Insurance policies that cover property
  that can be moved from one location to another for both transportation
  perils and perils affecting property at a fixed location.
• 
  Flood Insurance: Coverage against
  loss resulting from the flood peril, widely available at low cost under
  a program developed by the private industry and the federal government.
• 
  Foreign Insurer: An insurer is a foreign
  company in any state other than the one in which it is incorporated.
• 
  Forgery or Alteration
  Coverage Form: Commercial crime insurance form by the Insurance Services
  Office that covers loss resulting from the forgery or alteration of checks,
  drafts, bills of exchange, promissory notes, and similar instruments.
• 
  Fortuitous Loss: Unforeseen and unexpected
  loss that occurs as a result of chance.
• 
  Franchise Deductible: Deductible
  commonly found in marine insurance contracts in which the insurer has no
  liability if the loss is under a certain amount, but once this amount is
  exceeded, the entire loss is paid in full.
• 
  Franchise Insurance: A form of
  insurance in which individual polices are issued to the employees of a
  common employer or the members of an association under an arrangement by
  which the employer or association agrees to collect the premiums and remit
  them to the insurer.
• 
  Franchise Insurance: Insurance
  under individual contracts issued to the employees of a common employer
  or the members of an association under an arrangement by which the employer
  or association agrees to collect the premiums and remit them to the insurer.
  The insurer usually agrees to waive its right to discontinue or modify
  any individual policy, unless its simultaneously discontinues or modifies
  all other policies in the same group.
• 
  Fraternal Insurance: A cooperative
  type of insurance provided by social organizations for their members.
• 
  Fraternal Society: A social organization
  that provides insurance for its members.
• 
  Fronting Company: A domestic insurance
  company that provides claims or administrative services to a captive
• 
  Fully Insured: Insured status of a covered
  person under the Old-Age, Survivors, and Disability Insurance (OASDI) program
  if he or she meets certain criteria: forty quarters of coverage or has
  one quarter of coverage for each year after 1950 (or after age twenty-one,
  if later) up to the year of death. disability. Or attainment of age sixty-two.
• 
  Future Increase Option: A provision
  found in some policies that allows the insured to purchase additional disability
  income insurance at specified future dates regardless of the insured’s
  physical condition.
• 
  Future Service Benefits: Benefits
  accruing for service after the effective date of coverage under the plan.