GLOSSARY

Declarations The first part of the contract, and contains information derived from the insurance application, which provides the information for rating risk. All declarations contain the name of the insured, the insurer, and the property or activity to be insured, the period covered, the policy number, and the amount of the premium. Property insurance also lists the location of the property, and the size of deductible.

DEDUCTIBLE The amount of loss paid by the policyholder. Either a specified dollar amount, a percentage of the claim amount, or a specified amount of time that must elapse before benefits are paid. The bigger the deductible, the lower the premium charged for the same coverage.

DIRECT PREMIUMS Property/casualty premiums collected by the insurer from policyholders, before reinsurance premiums are deducted. Insurers share some direct premiums and the risk involved with their reinsurers.

DIRECT WRITERS Insurance companies that sell directly to the public using exclusive agents or their own employees, through the mail, by telephone or via the Internet. Large insurers, whether predominately direct writers or agency companies, are increasingly using many different channels to sell insurance. In reinsurance, denotes reinsurers that deal directly with the insurance companies they reinsure without using a broker.

DOMESTIC INSURANCE COMPANY Term used by a state to refer to any company incorporated there.