Extended Glossary of Common Insurance Related Terms

UMBRELLA POLICY

Coverage for losses above the limit of an underlying policy or policies such as homeowners and auto insurance. While it applies to losses over the dollar amount in the underlying policies, terms of coverage are sometimes broader than those of underlying policies.

UNBUNDLED CONTRACTS

A form of annuity contract that gives purchasers the freedom to choose among certain optional features in their contract.

UNDERINSURANCE

The result of the policyholder’s failure to buy sufficient insurance. An underinsured policyholder may only receive part of the cost of replacing or repairing damaged items covered in the policy.

UNDERWRITING

Examining, accepting, or rejecting insurance risks and classifying the ones that are accepted, in order to charge appropriate premiums for them.

UNDERWRITING INCOME

The insurer’s profit on the insurance sale after all expenses and losses have been paid. When premiums aren’t sufficient to cover claims and expenses, the result is an underwriting loss. Underwriting losses are typically offset by investment income.

UNEARNED PREMIUM

The portion of a premium already received by the insurer under which protection has not yet been provided. The entire premium is not earned until the policy period expires, even though premiums are typically paid in advance.

UNINSURABLE RISK

Risks for which it is difficult for someone to get insurance. (See Insurable risk )

UNINSURED MOTORISTS COVERAGE

Portion of an auto insurance policy that protects a policyholder from uninsured and hit-and-run drivers.

UNDERINSURED MOTORIST BODILY INJURY COVERAGE

Underinsured motorist bodily injury coverage is available in some states, where it may be mandatory.

This coverage pays for your medical expenses, lost wages, and other damages when you or your passengers are injured in an accident caused by a driver who has insufficient insurance coverage.

This coverage typically pays the difference between your coverage and the other driver's bodily injury coverage. The amount paid by underinsured motorist bodily injury coverage is capped at the limit you select.

UNDERINSURED MOTORIST PROPERTY DAMAGE COVERAGE

Underinsured motorist property damage coverage is available in some states, where it may be mandatory.

This coverage protects you if your vehicle is damaged in an accident caused by a driver who has insufficient insurance coverage. Other specific protection afforded by this coverage varies from state to state.

This coverage pays the difference between the coverage limit you select and the other driver's property damage coverage limit. The amount paid by underinsured motorist property damage coverage is capped at the limit you select.

UNINSURED MOTORIST BODILY INJURY COVERAGE

Uninsured motorist bodily injury coverage is available in some states, where it may be mandatory.

This coverage pays for your medical expenses, lost wages, and other general damages when you or your passengers are injured in an accident caused by a driver who has no insurance. Uninsured motorist coverage also pays for injuries sustained in hit-and-run accidents.

The amount paid by uninsured motorist bodily injury coverage is capped at the limit you select.

UNINSURED MOTORIST PROPERTY DAMAGE COVERAGE

Uninsured motorist property damage coverage is available in some states, where it may be mandatory.

This coverage protects you if your vehicle is damaged in an accident caused by a driver who has no insurance. Other protection afforded by this coverage varies from state to state..

The amount paid by uninsured motorist bodily injury coverage is capped at the limit you select. In some states, you will need to pay a deductible each time you make a claim.

UNINSURED/UNDERINSURED MOTORIST BODILY INJURY COVERAGE

In some states, both uninsured and underinsured motorist bodily injury are bundled into a single coverage. In the states where it is offered, this coverage may be mandatory.

This coverage pays for your medical expenses, lost wages, and other damages when you or your passengers are injured in an accident caused by a driver who has insufficient or no insurance coverage. This coverage also pays for injuries sustained in hit-and-run accidents.

The amount paid by uninsured/underinsured motorist bodily injury coverage is capped at the limit you select.

UNIVERSAL LIFE INSURANCE

A flexible premium policy that combines protection against premature death with a type of savings vehicle, known as a cash value account, that typically earns a money market rate of interest. Death benefits can be changed during the life of the policy within limits, generally subject to a medical examination. Once funds accumulate in the cash value account, the premium can be paid at any time but the policy will lapse if there isn’t enough money to cover annual mortality charges and administrative costs.