Have you ever spoken on the phone with your agent and been confused by their use of insurance terminology? You’re not alone! Understanding your insurance policy can be difficult if you do not understand the wordage, so we came up with a list of important insurance terms to know so that you’re not as overwhelmed next time you talk to your agent.
The most important insurance terms to know:
Policy: Written contract between you and your insurance agency outlining and verifying the legality of your insurance agreement.
Claim: A notification by the insured to their insurance company that a covered loss has occurred. The claim needs to be validated by the insurance company in order for them to provide compensation.
Deductible: Amount of money you need to pay out of pocket in the event of a claim before your insurance agency pays. If you’re unsure about how much your deductible is, make sure to ask your insurance agent in order to avoid any surprises.
Premium: Amount you will need to pay either on a monthly or annual basis in order to fund your insurance coverage. Failure to pay your insurance premiums results in cancellation of your coverage.
Loss: Includes bodily injury or damage to your property as a result of a covered accident.
Exclusion: A loss that your insurance company will not cover. Some exclusions include: a loss resulting from the insured breaking the law, damage caused by preventable wear and tear, and loss resulting from a catastrophic event.
Endorsement: An amendment, addition, or deletion of a part of an existing insurance policy. For example, if you needed to add a new vehicle to your auto policy, this would necessitate an endorsement.
While there are many insurance terms that may come up in your correspondence with your agent, these 7 are the most important to know. Even if you never speak on the phone with your agent, these insurance terms will certainly appear in your policy; needless to say, understanding the basics of your insurance policy is essential because you should know what you’re paying for! Contact us at 610-335-1139 if you’d like further clarification on these terms or to request a quote.
Call Risk Averse Insurance in Media, PA to discuss your business or personal insurance. Risk Averse Insurance is an insurance agency in Delaware County that specializes in providing high-quality insurance products at an affordable price.