Insurance Definitions Continued
As an insurance agent in Grand Prairie, it is my obligation to share with you the definitions of insurance and how it effects you. Listed below are definitions of common insurance terms that will help you when looking for insurance quotes.
Claim – A demand made by the insured, or the insured’s beneficiary, for payment of the benefits as provided by the policy.
Coinsurance – In property insurance, requires the policyholder to carry insurance equal to a specified percentage of the value of property to receive full payment on a loss. For health insurance, it is a percentage of each claim above the deductible paid by the policyholder. For a 20% health insurance coinsurance clause, the policyholder pays for the deductible plus 20% of his covered losses. After paying 80% of losses up to a specified ceiling, the insurer starts paying 100% of losses.
Collision Insurance – Covers physical damage to the insured’s automobile (other than that covered under comprehensive insurance) resulting from contact with another inanimate object.
Commercial Lines – Refers to insurance for businesses, professionals and commercial establishments.
Commission – Fee paid to an agent or insurance salesperson as a percentage of the policy premium. The percentage varies widely depending on coverage, the insurer and the marketing methods.
Comprehensive Insurance – Auto insurance coverage providing protection in the event of physical damage (other than collision) or theft of the insured car. For example, fire damage or a cracked windshield would be covered under the comprehensive section.
Deductible – Amount of loss that the insured pays before the insurance kicks in.
Earned Premium – The amount of the premium that has been paid for in advance that has been “earned” by virtue of the fact that time has passed without claim. A three-year policy that has been paid in advance and is one year old would have only partly earned the premium.
Exclusions – Items or conditions that are not covered by the general insurance contract.
If you have further questions about these definitions or any other thing about insurance, don’t hesitate to contact us.