Accidental Death and Dismemberment Insurance - Insurance that pays benefits to a beneficiary should a policyholder die as a result of an accident or if the policyholder suffers a dismemberment (loss of a limb, finger, eyesight, or hearing).

Alien Insurance Company - A company domiciled outside the United States.

A.M. Best Rating - A.M. Best is the world′s oldest and most authoritative insurance rating and information source, recognized within the insurance industry as the unbiased standard for excellence. An A.M. Best Rating is the company′s annual measurement of insurance companies. An insurer with an ‘A’ rating shows a strong capacity to meet its obligations to policyholders over extended periods of time.

Collateral - Property pledged by a borrower to protect the interest of the lender.

Collateral Protection Insurance (CPI) - A single interest insurance that covers damage to automobiles and other types of loan collateral. When a borrower fails to produce proof of comprehensive and collision insurance, the lending institution may opt to protect their interests by adding CPI to a loan. The premium, based on the current loan balance, is then added to the borrower′s payments.

Comprehensive Coverage - Coverage that protects the borrower and lien holder from expense caused by loss or damage to the collateral from any cause, except collision.

Credit Life - Credit Life (& disability) insurance pays a borrower′s loan when death, accident or illness prevents the borrower from working. Premiums are based on a percentage of the outstanding balance of the borrower′s loan or account balance.

Debt Protection - Non-insurance loan products that pay borrowers when real life events temporarily prevent them from fulfilling their financial commitments.

EDI - Acronym for Electronic Data Interchange, a means of electronic transmission of information. State National receives insurance information from carriers via EDI.

Flood Insurance - Flood insurance provides guaranteed flood certifications, force-placed insurance, and tracking for the life of each mortgage loan in compliance with the National Flood Insurance Reform Act of 1994. Properties located in specific flood hazard areas must have flood insurance to receive federal loan funding.

Guaranteed Auto Protection (GAP) - GAP insurance decreases a lending institution′s risk of deficient loans while helping borrowers meet their financial obligations. Typical insurance only pays the depreciated value, while GAP covers the full new vehicle loan balance in the event of catastrophic damage or theft.

InsurTrak - State National′s proprietary insurance tracking system designed exclusively for collateral protection insurance.

IVR - Acronym for Interactive Voice Response. Borrowers can use State National′s IVR system to immediately obtain the insurance status for their loan.

Licensing Authority - Licensing Authority is the state-by-state authorization an insurer must have in order to conduct business. In order to operate nationwide, an insurer must have licensing authority in all 50 states plus the District of Columbia.

Lienholder - The lending institution to which the borrower pledges collateral. Also referred to as loss payee, mortgagee or third party interest.

Managing General Agent (MGA) - An agent authorized by an insurance company to manage its business in a specific geographic territory. Activities performed by the MGA on behalf of the insurer may include marketing, underwriting, issuing policies, collecting premiums, appointing and supervising other agents, paying claims, and negotiating reinsurance.

Mortgage Program - Mortgage Insurance protects mortgage property against fire and other types of damage.

Policy - A written contract or certificate of insurance.

Property and Casualty Insurance - Insurance for accidents that cause direct physical loss to property (“Property”) or physical/personal injury (“Casualty”).

Reinsurers - A reinsurer is an “insurer for an insurer.” It provides a company with additional capacity to write insurance or expand into new markets by agreeing to assume a portion of risk.

Remarket - The selling or re-leasing of property which has been reclaimed as a consequence of a default or returned to the lessor at the end of the lease term.

Repossession - The reclaiming of ownership of property for failure to pay installments due.