Rodriguez Law Group, Inc.
Date: December 11, 2024
The notion of insurance policies can be intimidating. The language is specialized and complicated. Even professionals in the insurance field take time to refresh their knowledge of the terminology because it can be difficult to comprehend.
It helps to be familiar with basic insurance terms, especially when dealing with legal matters.
Here are some common terms to help you understand your insurance policy better.
1. Insurance Company: Also known as the insurer or insurance provider. This is a financial institution that sells insurance policies to individuals and businesses to protect against financial losses.
2. Insurance Policy: A legal contract between an insurance company and an individual or business that outlines the terms and conditions of coverage.
3. Policy Number: The number used by the insurance company to identify your policy.
4. Insured/ Policyholder: The insured is the individual or business that is protected by the insurance policy. The policyholder is the person or business that purchases and holds the policy.
5. Insurance Adjuster: An adjuster is a representative of your insurance company who investigates claims. Their responsibility is to the insurance company.
6. Insurance Agent: A person who acts as a representative for the insurance company and sells insurance on a commission basis. They sell the policy to people looking to be insured.
7. Policy Premium: A policy premium is the amount of money charged to the insured for coverage. This amount can be paid in full or over a monthly period.
8. Deductible: The deductible is the amount of money the policyholder agrees to pay out-of-pocket before they will shoulder the cost of a claim.
9. Coverage: This is the protection and benefits provided by the insurance contract. Often, coverage is related to damages that occur to people or property. The coverages range from very broad to specific depending on the policy and the situation. Some examples include collision, liability, bodily injury, and comprehensive.
10.Coverage Limits: The coverage limit is the maximum amount of payment the insurance company will make for a specific type of coverage. If an insured has an auto insurance policy with collision coverage of $10,000.00, then that is the coverage limit.
11.Named Peril: A peril is the direct cause or source of a loss and includes direct or indirect damage the insured sustains. If your house is damaged by a high wind event, then wind is the peril.
12.Cancellation: This is the termination of an insurance contract before the end of the policy period by the insured or the insurer. The insured can cancel their policy in writing or by discontinuing payments. The insurer can cancel the policy if the policy terms are breached.
13.Lapse: This is a period when someone goes without insurance coverage. If someone fails to renew their insurance policy, they have a lapse in coverage.
14.Claim: A claim is any formal request or demand for payment under the terms of an insurance party. Claims can be made by the policyholder or a third party.
15.Loss: A loss is direct or accidental damage to an insured property and is the basis for filing an insurance claim.
16.Damages: Refers to the losses, costs, or expenses that an insurance policy covers.
17.Renewal and Expiring Term: This is the period in which the policy provides coverage. It begins on a renewal date and ends on the expiring date. Many insurance companies automatically renew the policy at the expiring term.
In Conclusion: Having a good understanding of your policy is the first step to having peace of mind when a damaging event strikes. You will know the who, what, when, and how of filing a claim with your insurance company. Seek clarification from a representative of the insurance company if you do not understand the terminology within your policy.
If you have legal questions or need representation, contact us at 626-888-5206.
We can guide you through your personal injury, property damage, real estate, conservatorship and civil defense matters.
Disclaimer: This is not legal advice but general educational material. This does not create an attorney & client relationship. You should consult an attorney in your locale.
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