Glossary Of Insurance Terms - Ohio Insurance Institute

Glossary Of Insurance Terms
(Rev. 04/07)
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Gap Insurance:
An automobile insurance option, available in some states, that covers the difference between a car’s actual cash value when it is stolen or
wrecked and the amount the consumer owes the leasing or finance company. Mainly used for leased cars. (See Actual Cash Value.)
General Average:
In ocean marine insurance, a concept which provides that, where a portion of a vessel or cargo is jettisoned to save the entire venture from
peril at sea, the resulting loss is shared by all parties involved. The owners of property that is saved contribute in proportion to the interests
suffering loss, provided the latter are free of fault in the danger and the venture ultimately is successful. (Distinct from Particular Average.)
General Damages:
In auto insurance, typically refers to awards for pain and suffering.
General Liability Insurance:
A broad term meaning liability insurance, other than automobile liability or employers’ liability, written to cover professional and commercial
risks. In respect to commercial liability, various available coverages could cover such risks as premises and operations, contractual liability,
products and completed operations.
Generally Accepted Accounting Principles (GAAP):
Generally accepted accounting principles (GAAP) accounting is used in financial statements that publicly-held companies prepare for the Securities
and Exchange Commission. (See Statutory Accounting Principles–SAP.)
Generic Auto Parts:
Auto crash parts produced by firms that are not associated with car manufacturers. Insurers consider these parts, when certified, at least as
good as those that come from the original equipment manufacturer (OEM). They are often cheaper than the identical part produced by the
OEM. (See Crash Parts; Aftermarket Parts; Competitive Replacement Parts; Original Equipment Manufacturer Parts–OEM.)
Glass Insurance:
Coverage for glass breakage caused by all risks; fire and war are sometimes excluded. Insurance can be bought for windows, structural glass,
leaded glass, and mirrors. Available with or without a deductible.
Good Driver Plan:
An auto insurance rating program that reflects the insured’s accident and traffic violation record as a factor in determining the premium.
Grace Period:
The number of days (31 in most cases) a life insurance policy will remain in force when a payment is overdue.
Graduated Drivers License:
Licenses for younger drivers that allow them to improve their skills. Regulations vary by state, but often restrict night time driving. Young drivers
receive a learner’s permit, followed by a provisional license, before they can receive a standard drivers license.
Gramm-Leach-Bliley Act:
Financial services legislation, passed by Congress in 1999, that removed Depression-era prohibitions against the combination of commercial
banking and investment-banking activities. It allows insurance companies, banks, and securities firms to engage in each others’ activities and
own one another.
Group Insurance:
A single policy covering a group of individuals, usually employees of the same company or members of the same association and their dependents.
Coverage occurs under a master policy issued to the employer or association.
Guarantee Period:
Period during which the level of interest specified under a fixed annuity is guaranteed.
Guaranteed Cost Insurance:
The life insurance sold by some companies, with all cost factors guaranteed at the time of issue. Policies of this type usually have lower premiums
than the pre-divided premiums of comparable participating policies.
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