Every industry has its own lingo. Do you know the language of insurance? Consumers often see common insurance terms, but many are unsure how to define them or what they mean.
The following are a few of the most common terms and definitions. Becoming familiar with these will help you navigate insurance purchases, questions and claims.
Actual cash value: Coverage equal to the value of your damaged property minus depreciation.
Adjuster: This person determines losses to resolve insurance claims.
Comprehensive coverage: This part of your auto insurance covers damage to your vehicle that is related to damage from events such as vandalism, theft and fire but is unrelated to collision.
Deductible: Your deductible is what you pay out of pocket before your policy begins to cover the rest of the claim. Higher deductibles mean lower premiums.
Depreciation: This is the decrease in value of your property because of wear and tear that usually occurs over time and through regular use.
Exclusion: Damage or acts that won’t be covered under your insurance policy are in the exclusion.
Liability: If you become legally responsible for personal injury or damage to someone else’s property, liability insurance will protect you from bearing the cost.
Premium: Paid annually, semiannually, or monthly, this is the amount you pay for your insurance policy.
Replacement value: Regardless of a damaged item’s depreciated value, this coverage provides the money you need to replace damaged property with a new item.
Rider: This expands or limits the benefits of an insurance policy.
Underwriting: This is the process through which your insurance company reviews your policy application and sets the appropriate premium for coverage.
If you have any questions regarding any insurance or coverage term or issue, call our office today, and we’ll be happy to provide the answers.