Insurance has its own terms which can be confusing and tough to understand. Here's a cheat sheet on some basic insurance terminology:
Claim. A demand by a person or business seeking to recover from an insurer for a loss that may be covered by an insurance policy.
Coverage. The specific protection provided by a policy against the results of the hazards insured against.
Deductible. A certain dollar amount beyond which insurance protection begins. The insured assumes the loss up to the deductible limit and the insurer pays the remainder, up to the policy limit.
Exclusions. The section of the policy contract that specifies the losses not protected by the policy.
Peril. The specific event causing a loss, such as fire, windstorm or accidental death.
Policy. The written contract effecting insurance, or the certificate thereof, by whatever named called, and including all clauses, riders, endorsements, and papers attached thereto and made a part thereof.
Premium. A periodic payment by the insured to the insurance company in exchange for insurance coverage.
Replacement Cost. The cost of replacing or repairing property using new materials of like kind and quality without deduction for depreciation.
Risk. The hazard or chance of loss on any particular item of insurance. The term "risk" usually is used in a general way to designate the entire subject matter of insurance covered under a policy or upon which an application for insurance has been received.
Quote. The rate at which an insurance company indicates its willingness to assume certain liabilities or provide coverage under an insurance policy. A quote is an approximation of the premium for a given policy.
Comments