Glossary-C

C-Share Variable Annuities: A type of variable annuity with no upfront or surrender charges, allowing full liquidity at any time.

Capacity: The maximum risk an insurer can underwrite, based on its financial strength and surplus.

Capital: The financial resources, including equity or retained earnings, that support an insurer’s operations and ability to cover risks.

Capital Markets: Financial markets where equity and debt instruments are traded.

Captive Agent: An insurance agent who sells policies exclusively for one company.

Captives: Insurance companies formed and owned by non-insurance businesses to insure their own risks.

Car Year: A unit measuring one vehicle insured for one full year, used in auto insurance.

Case Management: A coordinated approach to medical care aimed at improving outcomes and controlling costs.

Catastrophe: A significant event causing large-scale insured losses, often exceeding $25 million.

Catastrophe Bonds: High-yield securities used by insurers to transfer catastrophe risk to investors.

Catastrophe Deductible: A higher deductible applied to losses from natural disasters to limit insurer exposure.

Catastrophe Factor: A statistical measure of the frequency of catastrophic losses in a region over 40 years.

Catastrophe Model: A computer-based tool that estimates potential losses from disasters using geographic and demographic data.

Catastrophe Reinsurance: Reinsurance coverage specifically for catastrophic events to protect insurers from large losses.

Cell Phone Insurance: Insurance that covers loss or damage to cell phones, often sold with the device.

Chartered Financial Consultant (ChFC): A professional designation for financial planners who complete advanced coursework in financial services.

Chartered Life Underwriter (CLU): A professional designation for life insurance specialists with expertise in insurance, investments, and taxes.

Chartered Property/Casualty Underwriter (CPCU): A professional designation for property/casualty insurance experts requiring exams and experience.

Claims-Made Policy: An insurance policy that covers claims made during the policy period, regardless of when the incident occurred.

COBRA: A federal law allowing continued health insurance coverage after employment ends, at the individual’s expense.

Coinsurance: A cost-sharing arrangement where the policyholder pays a portion of covered expenses, in property or health insurance.

Collateral: Property pledged as security for a loan that can be seized if the loan isn’t repaid.

Collateral Source Rule: A legal principle that excludes evidence of compensation from other sources in liability cases.

Collision Coverage: Auto insurance that pays for damage to your car from a collision, regardless of fault.

Combined Ratio: A metric that shows the percentage of premiums used to pay claims and expenses; below 100% indicates profit.

Commercial General Liability Insurance (CGL): A broad policy covering various liability exposures of a business.

Commercial Lines: Insurance products designed for businesses, covering risks like liability, property, and workers’ compensation.

Commercial Multiple Peril Policy: A package policy combining property, liability, and other coverages for businesses.

Commercial Paper: A short-term, unsecured promissory note used by firms to finance operations.

Commission: A percentage of the premium paid to insurance agents or brokers for selling policies.

Community Rating Laws: Laws requiring insurers to offer health coverage to all at the same rate within a geographic area, regardless of health status.

Competitive State Fund: A state-run workers’ compensation insurance provider that competes with private insurers.

Completed Operations Coverage: Insurance that covers liability for damages occurring after a contractor finishes work.

Comprehensive Coverage: Auto insurance covering damage not caused by collisions, such as theft, fire, or natural disasters.

Compulsory Auto Insurance: The minimum auto liability coverage required by law to legally drive a vehicle.

Contingent Liability: Liability for the actions of third parties for whom a business is legally responsible.

Coverage: Another term for insurance or the protection provided under a policy.

Crash Parts: Car parts, typically sheet metal, most often damaged in collisions.

Credit: A financial arrangement where payment is deferred in exchange for future repayment.

Credit Derivatives: Financial instruments used to manage or transfer credit risk.

Credit Enhancement: Methods like insurance or guarantees used to improve a bond’s credit rating and reduce interest costs.

Credit Insurance: Insurance protecting businesses from customer defaults on payments.

Credit Life Insurance: A policy that pays off a borrower’s loan if they die before repayment.

Credit Score: A numerical measure of an individual’s creditworthiness, often used in insurance underwriting.

Crime Insurance: Coverage for financial losses due to theft, burglary, or robbery.

Crop-Hail Insurance: Private insurance covering damage to crops from hail, fire, or lightning.

DISCLAIMER: The definitions provided in this glossary are intended to offer a general understanding of common insurance terms used within the industry. They may not apply in all states or to every insurance or financial product. This resource is for informational purposes only and does not constitute an insurance contract. Coverage terms, conditions, and exclusions vary—please consult your actual Parkway Insurance Group policy documents for complete details. In the event of any discrepancies between these definitions and your official policy, the policy provisions will take precedence. This content does not replace or fully explain the rights and obligations of policyholders, insurance agents, or insurance carriers. For questions about your specific coverage, please contact Parkway Insurance Group directly or refer to your policy language.
Glossary information has been adapted from trusted industry sources, including III.org (the Insurance Information Institute).