Think insurance is confusing? That may have something to do with the specialized vocabulary that's been developed to describe the many concepts, tools, and policy types unique to the industry. But you don't have to be an insurance outsider... Here are some insurance terms to help you become a savvy consumer.
- Appraisal: An assessment of the value of something, often by an expert.
- Actual cash value: The amount you paid for something minus the amount it's depreciated.
- Liability insurance: A type of policy that protects you if someone else gets injured or their property is damaged, and it's your responsibility.
- Beneficiary: The group, individual, trust, or charity that is named to receive any benefits from your life insurance policy.
- Claim: When you experience a loss covered by your insurance policy and make a formal request to receive benefits.
- Deductible: This is the amount you must pay out of pocket before your insurance benefits kick in.
- Peril: The specific potential causes of damage or loss covered by your insurance policy.
- Premium: This is the amount you pay to maintain your insurance policy each month, and is based on your level of risk.
- Reinsurance: When an insurer purchases insurance to protect their own risk.
- Replacement cost: The cost of replacing something without taking into account its depreciated value.
- Risk assessment: When you work with an insurer to determine your level of personal or business risk and to decide the cost of your policy.
- Umbrella policy: This type of policy can cover costs after your regular policy has been exhausted, or cover perils that may not be covered by your primary policy.
For all of your insurance questions, call or contact Wilson, Timmons & Wallerstein, Inc. today.