Sometimes, dealing with your insurance can feel like you need a special dictionary. Well, good news: we've got one for you! Knowing what basic insurance terms mean can clear a lot up. Check out some of the most frequently used terms, and you’ll be an insurance lingo pro in no time.
The part of auto insurance that provides medical care and income replacement benefits to insured persons injured in a car collision, regardless of who caused the accident.
An adjuster reviews and settles claims on behalf of the insurance company. The adjuster could be an employee of the insurance company or an independent contractor hired by the company.
An individual authorized by an insurance company to create, modify and terminate contracts of insurance, to arrange to do so or to advise on contracts of insurance.
Physical improvements beyond mere maintenance or repairs that augment the value of a property. So, for example, if you finish the basement or your house, or add a deck. These are “betterments” and your insurance should be adjusted so they are covered properly,
A term, mostly used in automobile insurance, meaning physical injury as a result of a car collision.
Business Interruption Insurance:
Various types of insurance against business expenses and loss of income resulting from a fire or other insured peril.
If something you have insured is damaged by something you’re covered for, and now you want the money to fix or replace it you make a claim. A claim is how you “use” your insurance.
One who makes a claim.
Words in a policy which describe certain specifications, limitations or modifications.
Two or more persons or companies who may be sharing a loss. A company whose policy covers the same risk as that of one or more other companies is a co-insurer whether the policies are written separately or together.
A type of automobile insurance coverage that pays for the cost of repairing the insured vehicle if it is damaged in a collision or other incident.
Comprehensive Automobile Coverage:
A type of insurance that covers you against loss or damage resulting from numerous miscellaneous causes such as fire, theft, windstorm, flood, vandalism, etc., but does not include loss by collision or upset.
Conditions are terms of insurance contracts that impose obligations an insured person must satisfy in order to preserve coverage.
To protect with insurance or the insurance protection provided.
This describes those things you are insuring against loss or damage, like your house, and the kind of loss or damage it’s ensured against.
A specified sum agreed upon by the insurer (that’s us, AMA!) and insured (that’s you!) that you agree to pay before we cover the rest of the claim. So, if your auto collision claim will cost $5,000 dollars, we might cover $4,500 if you have a $500 deductible that you pay first.
Driver Training Credit:
To encourage driver education courses at schools and colleges, many insurers grant premium rebates to applicants for automobile insurance who have successfully completed an approved training program. This is because you are a lower risk to the insurance company if you have been properly trained in how to drive a car.
An amendment or addition added to an agreement between parties (such as an insurance policy), which alters the terms of the agreement.
Additional coverage for movable items, like jewellery or antiques, beyond what’s included in the basic homeowner policy. Also called a “rider” or “endorsement.”
Your insurance policy is the contract you have with an insurance provider. What you pay and what you’re covered for.
Liability insurance pays for the damages or losses suffered by others for which the insured person is legally responsible (say, for instance, if you are found legally responsible for someone being seriously injured at your home, like if your dog attacks them).
Is the maximum amount your insurance company will pay out on a specific claim. This could range from $2000 for a stolen bike, to the entire replacement value of your house.
Loss or damage not insured:
These are events or scenarios that are not insured.
Notice of Loss:
A document detailing the losses and the circumstances surrounding how they occurred required by insurance companies immediately after an accident or other loss.
Often called “cause of loss”, peril is an event that results in damage or loss to your property or belongings. Like a fire, fire is a peril.
This is all your “stuff” – possessions owned by an you other than real estate or buildings (not attached to the land).
This is what you pay a year in exchange for coverage. Usually it’s talked about as yearly amount.
A chance of loss or injury for which an insurance claim may be submitted.
For a risk to be insurable, related events that could result in a claim must be unexpected. For example, the possibility that a visitor to a your home will injure herself by falling on the steps is an insurable risk because such a fall would be unexpected. Expected losses, such as the gradual wearing-out of clothes or the rotting of fruit, are not insurable risks.