Key Insurance Terms
Key insurance terms and what they mean:
Insurance can be key in establishing and maintaining financial stability during difficult times. However, insurance can also be complicated, requiring ample knowledge of coverage options. Understanding key insurance terms is crucial when seeking or assessing coverage.
Important Terms Related to Insurance Coverage
Here are some key terms that every policyholder should be aware of when purchasing or revisiting coverage:
- Premium—This is the amount you typically pay the insurance company to keep your policy active. Premiums can often be paid monthly, quarterly, semi-annually or annually.
- Deductible—This is the amount you are generally required to pay out of pocket before your insurance coverage kicks in. Higher deductibles usually mean lower premiums, but more costs when you need to use the insurance.
- Claim—This refers to requests you make to your insurance company to tap your coverage and potentially receive compensation for a loss covered by the policy.
- Coverage—This is the extent to which an insurance policy can financially protect the policyholder against potential losses.
- Policy limit—This establishes a maximum amount an insurer will pay under a policy for a covered loss.
- Exclusion—This term establishes certain conditions or circumstances for which the insurance policy will not provide benefits.
- Endorsement—This is a written amendment to an insurance policy that changes the terms of the original policy.
- Liability—This refers to a policyholder’s legal responsibility for the damage caused to another party, such as bodily injuries or property damage.
- Insured—This is a person or party listed on a policy who can benefit from coverage, such as the policyholder’s family members or employees.
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By understanding these terms, policyholders can make informed decisions about their insurance coverage and ensure their financial interests are adequately protected.
Contact the knowledgeable team at the Valera Agency today for more information or to get an instant quote for the right coverage.