insurance glossary

As you begin your quest for insurance information, there are several terms that will frequently appear. Here's a brief overview of the most common:

Benefit: The cash payout when a term ends, or when a claim is filed.

Claim: The act of requesting a benefit payout from your insurance company.

Co-Pay: In medical insurance, this is the up-front fee you pay for every office visit. Generally, this is broken down into different scales for primary care physicians, specialists, urgent care clinics, and emergency room visits.

Condo Policy: A homeowners policy written for the owner of a condominium. Does not cover the structure.

Coverage: The actual dollar amount of your insurance protection. This is often broken down into separate categories, like liability, comprehensive, and collision.

Coverage Limit: The maximum amount of money your insurance policy allows either for the life of the policy, or per year. Most often used in auto insurance (with regard to repairs) and health insurance (with regard to treatment limits), but can be seen in all types of policies.

Deductible: The amount you pay out-of-pocket when filing a claim. You can reduce the amount of money you spend on premiums by raising your deductible.

Discount: Reductions in the amount you pay in premiums, given if you meet certain qualifications.

Exclusions: Items, specified or not, that your insurance does not cover.

Earthquake Insurance: Special insurance policies written specifically to provide benefits in the event of earthquake induced damage.

Hazard Insurance: Also Homeowners Insurance, coverage for a home or condo, that provides benefits in the event of certain hazards, like fire, wind, lightning, or burglary.

Homeowner's Insurance: See hazard insurance.

Insurance Policy: The contract that spells out your coverage.

Insured, or Named Insured: The person or people named in an insurance policy. The customer.

Insurer: The insurance company.

Liability: Legal exposure.

Premium: The monthly, semi-annual, or annual payments you make in order to obtain coverage.

Rental Insurance: Insures the contents of a rental property – like a condo policy for people who rent.

Rider: Addenda to an insurance policy extending coverage, or specifying conditions. For example, people with significant amounts of valuable jewelry may have to add a rider to their homeowner's policy with increased coverage.

Term: The specified period of coverage. This is NOT limited to term life insurance. For example, auto insurance is generally sold in six month terms.