Simplifying Insurance Terms

    March 8, 2017

    Each industry or field has its own list of words that are exclusive to that industry. Certainly the words are used by experts to communicate effectively. In this article, we will help take out the guesswork. So the next time you read through a contract with insurance terms.

    Policyholder

    An individual or entity that buys insurance coverage from an insurance company.

     

    Policy

    Insurance TermsA written contract between a policyholder and an insurance company. Naturally it stipulates the insurance coverage type and how much the insurer will pay when a claim is made.

    Policy term

    This is the period in which a policy is active.

    Premiums

    The amount of money a policyholder pays monthly or yearly to maintain a policy.

    Ombudsman

    A regulatory board that settles disputes between policyholders and auto insurance companies.

    Claim

    A request made by a policyholder to an insurance company for compensation, which is in line with the terms and conditions of his/her policy

    What does Claimant  mean in insurance terms

    A person or entity (usually a policyholder) that files for an insurance claim.

    Risk

    A policyholder’s probability of submitting an insurance claim. In most cases, the higher the risk, the higher some premiums levied on the policyholder.

    Agent

    An individual that sells insurance policies on behalf of insurance companies.

    Underinsured

    A policyholder is underinsured if his/her insurance does not fully cover the highest amount of possible damage or loss.

    Write-off

    A vehicle is considered to be a write-off or totalled if it is damaged beyond repair or if it costs more to repair than to buy.

    Cancellation

    The termination of an insurance policy by an insurance company or policyholder before it expires.

    Depreciation

    The reduction in value of a fixed asset such as a vehicle or building due to wear and tear. A vehicle depreciates every time it is driven.

    Loss 

    The amount of money that an insurance company pays whenever a valid insurance claim is paid out.

    Amendment

    An alteration to the outline of the original insurance policy contract.

    Commission

    An amount of money expressed as a percentage of the premium paid to an agent by an insurance company as compensation for services rendered.

    Arbitration

    A method of settling a dispute between two parties through an impartial third party. The Ombudsman arbitrates disputes between policyholders and insurance companies.

    Coverage

    The benefits and protection granted to a policyholder by an insurer for having an insurance policy.

    Inception date

    The date on which the coverage of an insurance policy begins to be in effect.

    Expiration date

    The date on which the coverage of an insurance policy ceases to be in effect.

    Fraud

    The act of presenting a false claim or lodging a falsified claim with the intention of receiving funds from an insurer. It also a prosecutable criminal offence.

    Anti-theft device

    It’s an active or passive device that prevents the theft of cars and can result in the policyholder paying low premiums.

    What does Primary residence mean in insurance terms

    This is the place where the policyholder will mainly live during the length of the policy.

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    All info was correct at time of publishing