Are you looking for commercial, car, house, health, life, or commercial insurance? It is possible that you will pay too much for the wrong coverage or get the wrong terminology if you don’t know what the terms mean. This guide will help you understand the terminology of insurance to ensure you get exactly what you need.
General Terminology:
Deductible – Deductibles can be applied to auto, homeowner, and health insurance to reduce the overall cost. You pay for some of the damage before the insurance company pays their share. The deductible you choose will determine the premium.
Premium – The premium is the cost for insurance. It’s the cost of insurance coverage that you or your company pay.
Property and Casualty is a section of the insurance industry that deals with property damage or injuries caused by an accident. This category includes auto, householders, and commercial liability insurance.
Life and Health – This section of the insurance industry covers life and medical insurance, as opposed to property or casualty.
Umbrella Policy – This policy provides a wider coverage than the original underlying one. An umbrella policy could be a homeowner policy with a $1 million general liability clause for personal lawsuits.
Automobile Insurance Terminology
Collision – This is, as the name suggests, the portion of your auto insurance policy that covers the cost of repairing damage to your vehicle after you have met your deductible.
Comprehensive – This is also a term that applies to car insurance. It refers to the part of your insurance that covers “non-collision” types damage such as fire, water or malicious mischief.
Liability – This is insurance that covers losses to third parties like personal injury, property loss or pain and suffering. Liability coverage is usually included in householder policies to protect you against various personal injury lawsuits.
No-fault Insurance – Around fifty percent of states require no-fault insurance. This covers impairments to vehicles and property, regardless of who was at fault for the accident.
Medical Insurance Terminology
Ancillary Care/Coverage: Ancillary refers to “extra”, “additional”, or “associated.” This is insurance that covers common health benefits, but also provides additional (ancillary), insurance coverage for prescription medicine and eye care, among other things.
Cobra – Federal law that requires employers to provide health coverage for employees after they leave the company. This insurance is generally paid for by the ex-employee at group rates.
The co-payment is the amount your insurance company requires you to pay for every visit to the doctor’s office or for any other care. After the deductible is met, the insurance company pays the rest of the bill.
Fee for service – This type of insurance allows you to choose any doctor, and the insurer will pay a percentage of “reasonable” and “customary” fees for each doctor in your region. The remainder is your responsibility.
H,M.O. HMO – These organizations are designed to provide complete health coverage at a fixed fee. These organizations usually require you to use their hospitals and doctors, which can limit your choice.
P.P.O. P.P.O. – These are care providers that charge a flat fee and then negotiate a discount. When you use their preferred providers, your insurance company will cover a greater portion of your expenses.
Life Insurance Terminology:
Annuity – Annuities can be special types of policies that pay benefits for certain periods of time while a person remains alive. These are often offered by life insurance companies, and can be added to a life policy.
Term Life – Term insurance is only available for a specific period of time. The insurance will be paid if the insured dies during that period. The coverage must be renewed if it is not renewed.
Universal Life – A combination of a life insurance policy and a savings plan linked to market rates. The benefits are not guaranteed but can be modified within limits.
Whole Life – This policy has a fixed rate return and a pre-determined premium. It builds cash value during its term. Also, the insurance benefit is set.
Once you have an idea of what you want, it’s time to start shopping. You can find insurance companies online that will provide you with fast, informative rates for almost any category. To get the best deal, you can’t beat an educated shopper. You can now consider yourself an informed shopper when you are looking for insurance.