Here's a glossary of common insurance terms that might help you navigate the world of insurance better:
- Premium - The amount you pay for your insurance policy, typically on a monthly or annual basis.
- Deductible - The amount you pay out of pocket before your insurance starts to cover costs.
- Coverage - The extent of protection provided under an insurance policy.
- Claim - A request made by the insured to the insurance company for payment based on the terms of the insurance policy.
- Policyholder - The individual or entity who owns an insurance policy.
- Underwriting - The process by which an insurer evaluates the risk of insuring a home, car, or individual.
- Beneficiary - The person designated to receive the benefits from an insurance policy, typically in the case of life insurance.
- Exclusion - Specific conditions or circumstances that are not covered by the insurance policy.
- Liability - Responsibility for damages or injuries to others; in insurance, it often refers to coverage for damages or injuries that the policyholder is legally responsible for.
- Rider - An amendment to an insurance policy that alters the coverage or terms.
- Indemnity - A principle of insurance which provides that when a loss occurs, the insured should be restored to the approximate financial condition they were in before the loss, no better and no worse.
- Actuary - A professional who analyzes the financial consequences of risk and uncertainty, often involved in calculating premiums, deductibles, and other insurance policy factors.
- Adjuster - An insurance claims agent charged with evaluating an insurance claim to determine the insurer's liability under the terms of the policy.
- Renewal - The process of extending an insurance policy beyond its original term by mutual agreement between the insurer and the policyholder.
- Term Life Insurance - Life insurance that provides coverage at a fixed rate of payments for a limited period, the relevant term.
- Whole Life Insurance - Life insurance that remains in force for the insured's whole life and typically pays a benefit upon the person's death, whenever that may be.
- Universal Life Insurance - A type of flexible permanent life insurance offering the low-cost protection of term life insurance as well as a savings element, which is invested to provide a cash value buildup.
- Collision Coverage - Insurance that helps to repair or replace the policyholder’s car after an accident.
- Comprehensive Coverage - Insurance that covers damage to the policyholder’s car caused by something other than a collision, such as theft, fire, or vandalism.
- Co-insurance - A type of insurance in which the insured pays a share of the payment made against a claim.