Trying to get insurance can be confusing, especially if you do not understand some of the industry terms. We want to help make getting insurance as easy as possible. Having insurance is important, and sometimes, depending on the policy, it is required by law. We broke down 15 of the most common insurance terms that our clients ask us about to help!
The amount of money you must pay on a claim while the insurance company covers the rest.
Liability is the coverage of the other party. For example: In a car accident, if you are at fault and have liability only, your insurance will cover the other vehicle and not yours.
Coverage that covers your vehicle in the event of damage or stolen that does not involve a collision.
Coverage that covers your car in the event of a collision (i.e., accident) with another vehicle or object.
The amount you pay for your insurance every month.
The one who is the holder and purchaser of the policy.
The time for which the policy provides life insurance coverage.
Riders are an additional feature that can be purchased and added to your life insurance policy. Riders can cover different life events that your base life insurance policy does not. Some Riders include:
- Accidental Death Benefit Rider
- Accidental Total and Permanent Disability Benefit Rider
- Critical illness Cover
- Hospital Cash
- Waiver of Premiums
The actual cost of replacing damaged or destroyed property with new property, in contrast to Actual Cash Value (ACV).
Actual Cash Value
The value of any property that is lost or damaged at the time of the loss, in contrast to Replacement Cost (RC).
Any person or party besides the policyholder who is added to a policy, so that they will also be covered by that policy.
Waiver of Subrogation
An authorization that prohibits an insurance carrier from recovering the money they paid on a claim from a negligent third party. For example, a business owner may require a waiver of subrogation from one of their vendors to avoid being held responsible for any claims that may happen on their jobsite.
Primary specifies that one party’s liability policy is responsible for responding to a claim first before another entity’s policy applies.
Noncontributory stops the primary party’s insurer from seeking payment from the other entity’s policy for paying a claim.
Declaration Page or Dec Page
This is a one-page coverage summary that lists the insurance company name and address; name and address of policyholder; policy number and effective dates: start and end dates of coverage; the actual coverage in the contract including limits, premiums and deductibles, and where and how to file a claim.
Above is just a small list of terms that are used in the industry. However, these are the most popular that will help you understand your policy documents. If you do not see a specific term you are looking for, a great resource is Nationwide’s Insurance Glossary. Here you will find a large list of terms that are commonly used in insurance documents. Insurance can be complicated. However, knowing some common terms will help you read through documents to ensure you have the coverage you need to protect you, your family, and business.
If you have any questions or would like a quote, you can do so here!