# Insurance Glossary P–Z — Peril to Waiver of Subrogation
Part three of our complete A-to-Z insurance reference, covering P through Z. Plain-English definitions for the terms you'll actually run into on a policy or at claim time. BNW Services LLC, doing business as InsureToday24, is a licensed independent agency serving Missouri and Kansas. Call or text Lucy at (573) 594-5148 with any question.
See also Glossary A–G and Glossary H–O.
P
Peril — The cause of a loss: fire, theft, wind, hail, a collision. Named-peril policies cover only listed perils; open-peril policies cover all but the excluded ones.
Per-Occurrence Limit — The most a policy pays for a single occurrence or accident, no matter how many claimants are involved. Often paired with a larger *aggregate limit* that caps total annual payouts.
Personal Injury (Liability) — In liability policies, coverage for non-physical harms such as libel, slander, false arrest, or wrongful eviction. Distinct from *bodily injury*. (Note: in auto insurance, "PIP" means Personal Injury Protection — see Insurance Acronyms.)
Policy — The legal contract that spells out what's covered, what isn't, the limits, and the duties of both sides.
Policy Period — The span of time a policy is in force, shown on the declarations page (for example, a six-month auto term or a one-year home term).
Pre-Existing Condition — A condition that existed before coverage began. Most relevant in health and disability contexts; in property/casualty, prior damage is generally excluded.
Premium — The amount you pay for coverage, billed monthly, semi-annually, or annually. It reflects the risk the carrier is assuming. See How Premiums Are Priced.
Premium Audit — A post-term review (common in workers' comp and other commercial lines) that adjusts premium based on actual payroll or sales versus the original estimate.
Pro Rata — A proportional calculation — for example, refunding the unearned portion of a premium when a policy is canceled mid-term.
Proximate Cause — The primary cause that sets in motion an unbroken chain of events leading to a loss. Determining proximate cause helps decide whether a loss is covered.
Q
Quote — A carrier's estimated premium for a described risk, based on the information provided, before underwriting is finalized. See How Quoting Works in Missouri & Kansas.
R
Reinstatement — Restoring a lapsed policy to active status, often requiring payment of overdue premium and, for life insurance, evidence of insurability.
Reinsurance — Insurance that insurers buy to transfer part of their own risk to other companies, helping them stay solvent after catastrophes. It happens behind the scenes but underpins the whole system.
Replacement Cost (RCV) — What it costs to repair or replace property with new materials of like kind and quality, without subtracting depreciation. Costs more than ACV coverage but pays more at claim time. See Replacement Cost vs Actual Cash Value.
Rider — A written amendment to a policy that adds, removes, or changes coverage — the term commonly used in life and health insurance (the property/casualty equivalent is an *endorsement*). See Riders & Endorsements Reference.
Risk — The chance of loss, or the person/thing insured. Managing risk (avoid, reduce, retain, or transfer) is the foundation of insurance; buying a policy *transfers* risk to a carrier.
S
Salvage — Damaged property the insurer takes ownership of after paying a total-loss claim (a totaled car, for example). The insurer may recover value by selling it.
Scheduled Personal Property — Specifically listed and separately valued high-value items (jewelry, furs, fine art, firearms, cameras) added to a policy for broader coverage than standard limits allow. See Jewelry Article Floater.
Self-Insured Retention (SIR) — An amount the insured must pay out of pocket on a claim *before* coverage responds, common in commercial and umbrella policies. Unlike a deductible, the insured usually handles the claim itself up to the SIR, and the limit sits above the SIR rather than including it.
Subrogation — The insurer's right, after paying your claim, to step into your shoes and recover the money from whoever actually caused the loss. It's why your carrier may pursue an at-fault party after paying you.
Surplus Lines (Excess & Surplus / E&S) — Coverage placed with non-admitted carriers for hard-to-insure or unusual risks that standard "admitted" carriers decline. E&S markets provide flexibility but carry different regulatory protections.
T
Third-Party Coverage — Coverage that pays *others* for harm you cause (liability), as opposed to *first-party* coverage that pays you for your own loss.
Total Loss — When property is damaged beyond economical repair, or repair would cost more than the item is worth. The payout is based on the property's value and your coverage type (ACV or replacement cost).
Total & Permanent Disability (TPD) — A disability qualifying an insured for certain benefits or premium waivers under life or disability policies.
U
Umbrella Policy — Extra liability coverage that sits *above* the limits of your home, auto, or business policies, and can fill some gaps they exclude. A cost-effective way to add $1 million or more of protection. See Personal Umbrella.
Underinsured / Uninsured Motorist (UIM / UM) — Auto coverage that pays your injuries (and sometimes damage) when the at-fault driver has no insurance or not enough. Required or offered depending on state.
Underwriting — The process a carrier uses to evaluate risk and decide whether to offer coverage and at what price. See How Deductibles Work and related claims/underwriting articles.
Unearned Premium — The portion of prepaid premium for coverage not yet provided; it's refundable (usually pro rata) if you cancel early.
V
Valued Policy — A policy that pays a pre-agreed amount on a total loss rather than actual cash value, common for antiques, collectibles, and some classic autos. See Classic & Collector Vehicle.
Vacancy — A property condition that can restrict or suspend coverage. Standard policies often limit coverage on homes vacant beyond a set number of days; a vacant-property policy addresses the gap. See Vacant Property.
W
Waiver of Depreciation — A provision or endorsement that pays a claim without subtracting depreciation, effectively delivering replacement-cost value even where ACV would otherwise apply.
Waiver of Premium — A life or disability rider that keeps a policy in force by waiving premiums if the insured becomes totally disabled.
Waiver of Subrogation — An agreement (often required in business contracts) where the insured gives up — and directs the insurer to give up — the right to recover from a specific third party after a loss. Common in leases and construction contracts.
Where to Verify
The NAIC (naic.org) and Insurance Information Institute (iii.org) publish the authoritative glossaries. For Missouri and Kansas specifics, contact the Missouri Department of Commerce & Insurance (insurance.mo.gov) or the Kansas Insurance Department (insurance.kansas.gov).
Further Reading
- NAIC Consumer Insurance Glossary — https://content.naic.org/consumer/insurance-glossary
- Insurance Information Institute Glossary — https://www.iii.org/toolkit/glossary
- Investopedia — Subrogation — https://www.investopedia.com/terms/s/subrogation.asp
- III — What Is an Umbrella Policy — https://www.iii.org/article/what-personal-umbrella-liability-policy
- Kansas Insurance Department Consumers — https://insurance.kansas.gov/
References
1. National Association of Insurance Commissioners — https://www.naic.org
2. Insurance Information Institute — https://www.iii.org
3. Investopedia — https://www.investopedia.com
4. Missouri Department of Commerce & Insurance — https://insurance.mo.gov
5. Kansas Insurance Department — https://insurance.kansas.gov
Related
- Insurance Glossary A–G
- Insurance Glossary H–O
- Insurance Acronyms & Abbreviations
- Personal Umbrella
- Replacement Cost vs Actual Cash Value
Watch
- "Subrogation Explained" — Investopedia (YouTube): https://www.youtube.com/@investopedia
- "What Is an Umbrella Policy?" — Think Insurance (YouTube): https://www.youtube.com/@ThinkInsurance