Since it’s full of technical jargon, the world of insurance can be very confusing for the uninitiated. From “policy” to “claim” and “deductible” many terms sound familiar but obscure at the same time.
The following glossary will provide you with the essential definitions to understand how insurance works so you can dip your toe in these challenging waters. The words in italics are terms also included in this glossary that you must read in order to understand a given entry.
Termination of the insurance policy before the termination date. This can be done either by the insured or the insurer.
Any request or demand by a policyholder (or insured) to be reimbursed by an insurance company under the terms of their policy.
The amount of money you would pay in a loss before any payment is due by the insurer. A higher deductible will usually lower your insurance premium.
The time during which a policy remains in force after the premium is due but not paid. This period usually is 31 days, but it’s important to check carefully the terms of your policy to make sure you know the exact amount of days stipulated in it.
Compensation for a loss intended to reimburse the insured and restore them to their approximate previous financial position.
A system in which a group of people susceptible to the same risk, or risks, pool their resources so an insurance company can reimburse them for their losses.
Insurer / Insured
Also called carrier, the insurer is the company that provides insurance. On the other hand, the insured, or policyholder, is the person or company covered by an insurance company.
A measurable cost of damaged suffered by an individual. The type of loss will vary depending on the type of insurance (auto, health, property, etc.)
The contract between you (the insured) and the insurance company (the insurer).
The price that the insured pays in exchange for coverage by the insurance company. As a general rule, a higher deductible will lower your premium. Conversely, there are some factors that would raise it, such as your profession, your credit score and your claims history.
This guide has provided you with the most basic terms to navigate the world of insurance. However, it’s important to contact an expert that knows much more than the elemental insurance concepts.
At La Popular Insurance we offer auto, home, commercial, health and life insurance. With 26 years of experience, we offer extremely qualified assistance at an affordable price. Contact us today by email or telephone ( 323-566-5063 , 562-928-1960, 323-773-9793 ) to discover more about our wide range of services.