It doesn’t matter if you are shopping for Auto, Home, Health, Life or Business insurance - if you don’t know the lingo you are liable to end up paying too much or getting the wrong coverage. Here’s a handy guide to some of the more important insurance terms to keep you on the right track.
General Terms:
Deductible - Deductibles are applied in auto, health and homeowners insurance to trim back the total cost of insurance, by your accepting some of the damages or disbursements prior to the insurance company paying for the balance. Usually you select the quantity of the deductible and the higher the quantity you select, the lower your premium.
Premium - This is simply the amount you or your company pays to the insurance company in exchange for their coverage and benefits provided.
Property and Casualty - Property and casualty is the term for that segment of the insurance industry that pays for damage to property or for personal injury. This includes auto, home-owners and business liability insurance among other things.
Life and Health - This is the part of the insurance industry that covers life and health insurance as opposed to property and casualty.
Umbrella Policy - This is broader coverage than the original underlying policy. For example, a homeowner’s policy that also includes a general liability provision of $1 million for personal lawsuits might be considered an umbrella policy.
Car Insurance:
Collision - Like the name implies, this is the aspect of your car insurance that compensates for fixing damages to your car following the deductible.
Comprehensive - This term also applies to car insurance and it’s that aspect of your insurance coverage that compensates for “non-collision” types of damage like fire, water, malicious mischief or theft.
Liability - this is the part of your coverage that pays for damage done to a third party such as bodily injury, property damage or pain and suffering. Homeowners policies also typically have liability provisions to protect you against various types of personal injury lawsuits.
No-fault - Half of the states have no-fault insurance which pays for losses no matter who is at fault in the accident.
Health Insurance:
Ancillary Care/Coverage - Ancillary is just a fancy term for “additional” or “extra” or “related.” It applies to comprehensive policies that for example, only cover basic health benefits but also have added (ancillary) coverage for prescription drugs or eye care, etc.
Cobra - The “Consolidated Omnibus Budget Reconciliation Act” is a Federal law that requires companies to offer extended health care coverage to terminated employees for a period of time. This coverage is typically paid for by the ex-employee but at group rates.
Co-payment - An amount much your insurance requires you to pay for each visit to the doctor’s office, or for other care. The insurance company then pays the remainder of the bill assuming the deductible has been met.
Fee for Service - This is health Insurance that permits you to choose any Doctor and covers some predetermined share of “reasonable and customary” fees. You then pay the remainder.
H,M.O. - “Health Maintenance Organizations” are designed to provide comprehensive medical coverage for a set fee. However, these organizations typically require that you use their Doctors and facilities thus limiting your choice.
P.P.O. - “PPOs” are networks of physicians who offer their services at a discount negotiated by the insurance company. Thus insurers will normally pay a bigger portion of your expenses when you use these “preferred providers.”
Life Insurance:
Annuity - Annuities are special types of policies that pay benefits while a person is alive for a specified period of time. They are sometimes connected to Life insurance policies.
Term Life - Term life is a form of insurance bought for a specified time (or term). If the insured dies during this time period, the insurance is paid. If not, the insurance coverage expires or must be renewed to keep the benefit.
Universal Life - A Life policy connected to an investment account and market rates. The benefits are not set but change based on the returns achieved.
Whole Life - A standard life policy that accrues cash value over the life of the policy and with preset premiums. The insurance benefit is also a set at an assured amount.
Chris Carbukel enjoys helping people get the best and most economical insurance policies for their needs. If you’d like to know more visit his new website Insurance-Price-Quotes.org where you can learn how to get the best deals on all kinds of insurance including finding the best Home Insurance Comparison.
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