Insurance language can sound a bit confusing. The insurance industry has definitions and terms that most people do not use regularly. Understanding basic insurance definitions can assist you when discussing your insurance policy with an agent.
Knowledge of insurance terminology can help you, as a consumer, to make better choices when you shop for a policy. You will have a better understanding of what you are purchasing and whether the coverages fit your protection needs.
What is actual cash value?
This term is commonly used with homeowners insurance. It is the amount to either replace or repair property with property equal to the replacement value minus depreciation.
Who is an adjuster?
An insurance professional who evaluates losses and settles claims.
What is an appraisal?
This is particularly important in property insurance. An appraisal is used to determine a property's insurable value, or the amount of a loss.
What does at-fault mean?
The person who is at fault may be liable for damages as a result of being held legal responsibility for an accident or loss.
What is bodily injury liability coverage?
This can cover the injuries an auto insurance policyholder causes to someone else in a collision.
Who is a captive agent?
Someone who sells insurance for only one company or group.
What is an insurance claim?
A request for payment to an insurer from a policyholder. The request is made to cover a loss or damage.
What is a deductible?
The portion of loss a policyholder must pay out of their own pocket toward a covered loss, typically for certain coverages in homeowners, renters or auto policies. The insurance company will deduct this amount from any payment of a claim. Higher deductibles usually mean lower premiums.
What are the declarations?
These are part of a policy that states the name and address of the policyholder, the policy period, the amount of the coverage, premiums, deductibles and supplemental information.
What is depreciation?
A property will decrease in value over time, which is called depreciation.
What are exclusions?
These are provisions of an insurance policy referring to hazards, perils, circumstances, or property not covered by the policy.
Who is an independent agent?
A licensed insurance agent who can represent more than one insurance company.
What is liability coverage?
Insurance policies provide this coverage to protect a policyholder in the event they are legally obligated to pay because of bodily injury or property damage caused to another person.
Who is an insured?
The person or entity legally who the insurance company covers with a policy.
What is peril?
A risk or event that causes a loss, such as a fire or theft.
What is an insurance premium?
What a person pays for having an insurance policy. Premiums are ordinarily paid monthly, bi-annually or annually.
What is real property?
This is land and buildings or other structures on the land.
What are riders or endorsements?
There is a standard insurance policy, and the riders can be attached to the policy to better meet the insured’s needs. Endorsements are the same thing and are commonly used in homeowners, renters life or auto insurance policies.
What is risk?
It is the chance of loss or the person or entity that is insured.
What is subrogation?
The legal process in which an insurance company, after paying a loss, seeks to recover the amount of the loss from another party who is legally liable for it.
What is underwriting?
It is the way the insurance industry evaluates a risk and classifies the ones that are acceptable. An insurer’s underwriting guidelines will determine how much coverage a person will be allowed and, ultimately, the premium that will be charged.
We make the words understandable
East Street Insurance provides excellent products and services for consumers in Ohio, and we can find you the type of coverage you need. Our East Street Insurance agents do not want our clients to be confused about their policy. Feel free to ask any question to clarify what a term means and how it may apply to you.
Insurance can be confusing, and our agents are here to make it a bit less confusing. Our agents are not just selling insurance policies, they are here to help educate you on your policy.
Our reason for educating buyers is simple. The more you know about insurance, the better your decisions will be. Knowing about insurance terminology will help assist you in finding the coverage that best fits your needs for your home and belongings.
We offer many discounts to lower the cost of your coverage.
Feel free to contact us Feel free to contact us at your convenience. We are here to help you, and we would appreciate the opportunity to tell you more about us and provide you a policy you can trust!
*The information in this article was compiled from a variety of sources and is intended to provide helpful tips only.