Essential Terminology To Get Insurance Coverage
It doesn't matter if you're shopping for Car, House, Health, Life or Commercial insurance - if you don't know the jargon you're likely to wind up over-paying or buying the wrong insurance coverage. Here's a useful guide to some of the more crucial insurance terms to keep you on the right track.
General terms:
Deductible - Deductibles reduce the price of insurance because you pay a predetermined amount of the loss or expense BEFORE the insurer pays. You select the deductible and the higher you choose, the lower your premium.
Premium - the premium is the cost of the insurance. It is how much you or your company pays for the coverage.
Property and Casualty - this describes a part of the insurance industry that covers damage to property or persons injured in an accident. Auto, home-owners and business liability insurance fall under this category.
Life and Health - This is the other section of the insurance industry that doesn't fit under the property and casualty category.
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.
Automobile 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 aspect of your insurance coverage that compensates for losses to a 3rd party like personal injury, property impairment or pain and suffering. Householders policies also usually have liability coverage to protect you from assorted cases of personal injury suits.
No-fault - About fifty percent of the states require "no fault" insurance which pays for impairments to vehicles, property and individuals irrespective of who is at fault in the accident.
Medical 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 - A Federal law that requires companies to offer health coverage to employees for a period of time after they have left the company. The ex-employee generally pays for this insurance at group rates.
Co-payment - This is a health insurance term for how the portion you pay for a visit or procedure. After your co-payment and deductible the insurance company covers the rest of the bill.
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. - "HMOs" are created to deliver complete health coverage for a predetermined fee. But, these organizations generally call for you to use their MD's and hospitals thus restricting your selection.
P.P.O. - "Preferred Provider Organizations" are networks of doctors who charge on a fee for service basis but typically at a discount pre-negotiated by the insurance company. Thus insurance companies will usually pay a larger share of your bill if you go to one of their "preferred providers."
Life Insurance:
Annuity - These are policies that pay while a person is alive for a specified period of time. They are usually offered by life insurance companies.
Term Life - Term life is life insurance in effect only for a specified period (term) of time. If death occurs during this period, the insurance is paid. If not, the coverage must be renewed or it expires.
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 showing others how to get the best and lowest cost insurance policies for their needs. If you'd like to learn 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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