# Embedded and Service Contracts Glossary

> 20 terms from the Insurance book's Embedded and Service Contracts part, each defined in a line and linked to the chapter that explains it.

- **Administrator (service contracts):** the person responsible for administering service contracts and for the filings a state's service contract law requires; registers with the commissioner and keeps the records ([Service Contracts & Warranties](https://www.syntaqx.com/books/insurance/service-contracts#the-parties)).
- **Attach rate:** the share of eligible purchases on which the buyer adds the embedded coverage offered; the demand curve of an embedded program ([Embedded Insurance](https://www.syntaqx.com/books/insurance/embedded-insurance#the-money-premium-compensation-and-revenue-share)).
- **Contractual liability insurance:** a policy covering a service contract or home warranty company's obligations to holders, which in Florida can replace the unearned premium reserve when it covers 100% of claim exposure ([Service Contracts & Warranties](https://www.syntaqx.com/books/insurance/service-contracts#financial-security-the-three-options)).
- **Dealer obligor:** a vehicle dealer that is itself the provider obligated on the service contracts it sells, so the program's security depends on the dealer ([Vehicle Service Contracts & GAP](https://www.syntaqx.com/books/insurance/vehicle-service-contracts-and-gap#dealer-obligor-and-third-party-obligor-programs)).
- **Debt cancellation contract:** a loan term under which a lender agrees to cancel all or part of the debt on a specified event, regulated for national banks as a banking product rather than insurance ([Vehicle Service Contracts & GAP](https://www.syntaqx.com/books/insurance/vehicle-service-contracts-and-gap#what-the-products-are)).
- **Embedded insurance:** coverage offered inside the purchase of another product (a trip, a rental, an order, a lease, a car), by a partner who is licensed, holds a limited lines license, only refers, or sells a product that isn't insurance ([Embedded Insurance](https://www.syntaqx.com/books/insurance/embedded-insurance)).
- **GAP waiver:** a term of a credit contract under which the creditor forgives the difference between the balance owed and the vehicle's value after a total loss; the waiver form of GAP, as opposed to GAP insurance ([Vehicle Service Contracts & GAP](https://www.syntaqx.com/books/insurance/vehicle-service-contracts-and-gap#what-the-products-are)).
- **Home warranty:** a contract to repair or replace a home's systems and appliances (and in Florida, structural components) for a fee, regulated as its own line of business in some states ([Home Warranties & Product Protection](https://www.syntaqx.com/books/insurance/home-warranties-and-protection-plans#home-warranty-licensing)).
- **Limited lines license:** a narrow producer license for coverage incidental to another sale, such as travel, rental car, credit, self-storage or portable electronics insurance ([Embedded Insurance](https://www.syntaqx.com/books/insurance/embedded-insurance#who-may-sell-it-four-licensing-models)).
- **Mechanical breakdown insurance:** a policy issued by an authorized insurer covering the same failures as a service contract; excluded from the NAIC model's service contract definition ([Service Contracts & Warranties](https://www.syntaqx.com/books/insurance/service-contracts#warranty-service-contract-or-insurance)).
- **Offer presentation:** the record of an embedded offer as shown to a buyer (content version, disclosures, unselected default, the buyer's choice), kept for sold and declined offers ([Embedded Insurance](https://www.syntaqx.com/books/insurance/embedded-insurance#how-to-build-it)).
- **Provider fee:** the consideration paid for a service contract (in the NAIC model, the amount in excess of the reimbursement insurance premium); not subject to premium tax ([Service Contracts & Warranties](https://www.syntaqx.com/books/insurance/service-contracts#what-the-contract-must-say)).
- **Provider (obligor):** the person contractually obligated to perform under a service contract, which must meet the state's financial security rule ([Service Contracts & Warranties](https://www.syntaqx.com/books/insurance/service-contracts#the-parties)).
- **Reimbursement insurance policy:** a policy issued to a service contract provider under which the insurer discharges the provider's obligations to holders, including refunds, if the provider doesn't perform ([Service Contracts & Warranties](https://www.syntaqx.com/books/insurance/service-contracts#the-parties)).
- **Repair authorization:** the administrator's approval of a covered repair, with an amount and an authorization number, given before a facility repairs a vehicle or product under a service contract ([Vehicle Service Contracts & GAP](https://www.syntaqx.com/books/insurance/vehicle-service-contracts-and-gap#claims-and-repair-authorization)).
- **Service contract:** a contract for a separately stated price and a specific duration to repair, replace or maintain property after failure from defects or wear and tear; not insurance in most states when it meets the state's regime ([Service Contracts & Warranties](https://www.syntaqx.com/books/insurance/service-contracts#warranty-service-contract-or-insurance)).
- **Service dispatch:** one technician visit on one item of a home warranty or protection plan claim, with its diagnosis and repair, replace or cash decision ([Home Warranties & Product Protection](https://www.syntaqx.com/books/insurance/home-warranties-and-protection-plans#claims-as-repair-or-replace-logistics)).
- **Service warranty:** Florida's term for a consumer product service contract regulated under chapter 634, Part III ([Service Contracts & Warranties](https://www.syntaqx.com/books/insurance/service-contracts#financial-security-the-three-options)).
- **Vehicle service contract (VSC):** a service contract covering repairs to a vehicle after the factory warranty, usually sold and financed at the dealer ([Vehicle Service Contracts & GAP](https://www.syntaqx.com/books/insurance/vehicle-service-contracts-and-gap)).
- **Warranty (Magnuson-Moss):** a promise given with the product at no extra charge as part of the basis of the bargain; one that costs extra or comes after the sale is a service contract ([Service Contracts & Warranties](https://www.syntaqx.com/books/insurance/service-contracts#warranty-service-contract-or-insurance)).

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