Insurance Terms Made Easy
Insurance can sometimes become associated with complicated terminology. While the staff at our agency can easily explain any of the seemingly complex vocabulary from the insurance world, it is never a bad idea to brush up on your knowledge in order to comfortably communicate with an agent when matters arise. Let’s start with coverage:
Coverage: a specific protection provided by a policy against the results of the hazards it is insured against. For example, if your home were to be struck by lightning, or if there was water damage from burst pipes, we are able to offer policies that cover these unforeseen occurrences. If you want coverage that takes care of you when you need it, then you’ll need to start with a quote.
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. In other words, a quote is something you can get from an independent insurance agent that estimates how much money you’ll pay each month for the type of insurance coverage you’re looking to buy.
Premium: a periodic payment by the insured to the insurance company in exchange for insurance coverage. Premium is basically just another word for cost. We offer a variety of discounts that can lower your premium as well as payment plans that can help you manage your payments in a way that works best for your budget. If a situation occurs where you need to use the insurance coverage we offer, you would then proceed to file a claim.
Claim: a demand by a person seeking to recover from a loss that may be covered by an insurance policy. This means that you, the insured, would ask us, the insurer, to pay for damages to your insured product. Whether or not your insurance policy covers the damages depends on the type of coverage you purchased with your insurance agent.
This is where the idea of exclusions comes into play.
Exclusions: specific losses not protected by the policy. Many of our policies provide comprehensive coverage, which means that any kind of loss that is direct, sudden, and accidental is covered unless your policy specifically says it is not. However, just as a car warranty wouldn’t cover wear and tear on your tires, an insurance policy will not cover damages associated with known issues. For example, if you had a leaky faucet and found black mold after a few months, your insurance policy would not cover that type of damage.
We hope these terms offer a better understanding of the insurance basics. When it comes to filing a claim or discussing your premium with our trustworthy insurance agents, always remember that insurance doesn’t have to be an intricate or difficult process and that your protection is our priority.
Sourced from Foremost Insurance: https://www.youtube.com/watch?v=jCqaO1frNf8&=&t=