August 30th, 2012
Insurance lingo can sometimes be hard and confusing. There are a lot of words out there. We've already brought you a comprehensive Car Insurance Cheat Sheet, so we decided to also develop one for general insurance − to help you understand the insurance realm just a little bit more!
80/20 Insurance - Two parties in an accident agree that one driver is 80% at fault, while the other is 20% at fault. This can lessen the financial pain of getting into accident, as neither party is completely at fault.
Actual Cash Value - The cost of replacing damaged items at current full prices minus depreciation.
Actuary - A person, usually a specialist, who calculates the statistics of insurance such as rates.
Agent - A person who sells and manages insurance policies. There are two categories: independent and direct. An independent agent represents two or more carriers and sells policies based on the customer. A direct agent represents only one carrier and sells only their policies.
Amendment - A change to the basic policy contract.
Arbitration - The process of settling a dispute through an impartial party.
Bodily Injury Coverage - Covers you for damages you cause in an accident that is deemed your fault to other people involved. For example, it pays for other people’s medical bills if you injure them in an accident. You may still be sued for more money if the medical bills exceed the maximum your insurance company will cover.
Broker - A person who sells insurance solely in the clients' interest, not a company's.
Broker-Agent - A person who is licensed as an agent and a broker. This means that they represent certain insurers but will also search the market for better rates for their clients.
Burial Insurance - This is specialized insurance that pays only for the expenses related to the policyholders funeral costs. In short, it's a way of financing a funeral month by month.
Claim - Notice to your insurer that, under your policy, you may be entitled to a recovery of loss.
Claimant - The person, usually you or a third party, who has the right to the recovery of a loss.
Copayment - A fee you have to pay for health care services, in addition to what you insurance covers.
Deductible - The portion you are responsible for paying before the insurance will kick in. For example, if there is $2,500 of damage to your vehicle and you have a $500 deductible, you will pay the first $500 and the insurance company will pay the remaining $2,000.
Group Discounts - You can save on car insurance simply by being part of an association. Such organizations include military, alumni associations, credit unions, and the peace corps association. If you are part of any kind of association you should check to see if they qualify you for a group discount.
Homeowner's Insurance - This insurance will protect your physical property, along with the personal property that resides inside your house. It also covers injuries that people may receive while on your property.
Limits of Liability - Caps on the dollar amounts of coverage that you are entitled to receive under the policy.
Master's Policy - Part of the Condominium Association's policy that explains exactly what the insurance covers for you.
Named Perils - Specific incidents written in the insurance policy that will be completely covered if they occur.
Ordinance or Law Coverage - This coverage pays the extra cost to rebuild your home so that it meets new or updated building codes. It only applies if your home was not up to these codes when it was first built. It is also called the Building Code Upgrade Coverage.
Parametric Insurance - This type of insurance coverage uses parameters measured by independent agents to determine whether or not compensation will be rewarded.
Renter's Insurance - This insurance protects the property that you rent against theft and natural disasters.
Satellite Insurance - Governments and big company's will obtain liability insurance for their satellites. After all, they are pretty expensive to build.
Title Insurance - Mandatory insurance that protects the owner of a home in the case that a past claim or other problem arises from a previous owner.
Umbrella Insurance - This is additional liability insurance that protects you in the event that you are sued for a large amount of money. Auto and home insurance have limits, so if you want protection against a lawsuit, umbrella coverage is the way to go.
Underwriting - This is the process used by insurance carriers to decide how much coverage you can obtain and how much you'll pay. It's based on your evaluated riskiness and exposure. It pretty much comes down to how risky you are to insure and at what denomination the carrier is willing to insure you.
At CoverHound, we know that your time and money is precious. That’s why we’ve made finding insurance quotes easy. Check us out today to learn more about ways to save.