Common Insurance Terms Defined

Whether you're beginning the new year with a new insurance policy, preparing to submit a claim, upgrading an existing policy, or simply seeking a better knowledge of your coverage, it's necessary to become familiar with specific common insurance phrases. Bearingstar has completed your assignment for you.

We have created this list of some of the most often used insurance terminology and definitions. While our agents are always ready to answer inquiries, this guide can also serve as a quick reference when examining one of your policies and encountering any of these phrases.

Actual cash value (ACV): Your policy can be structured in several ways that affect the amount you get when filing a claim. Actual cash value is one method computed by removing depreciation from the property's replacement cost.

Replacement cost: In contrast to the actual monetary worth, replacement cost refers to the expense of replacing a piece of property without deducting for everyday usage or wear and tear. For instance, if you have auto insurance, replacement cost coverage will pay you to replace your vehicle with an exact or comparable model.

Injury to the body: An injury sustained in an automobile accident or on your property. You may be responsible for this if you are found to be at fault.

Carrier: This term refers to the insurance provider that provides you with coverage. For instance, Bearingstar is the agency, whereas Arbella is one of our insurance providers.

Claim: A request for your insurer to pay for anything covered by your policy. This might be everything from a car collision to a house fire. When you file a claim, you request that your insurer investigate and compensate you for any losses or damages.

Coverage: The protections and benefits a policyholder receives.

Damages are the amount of money that one party is legally obligated to pay another for tangible losses or liabilities.

Deductible: The amount you are responsible for paying toward an insured loss. The deductible is removed from your claim reimbursement when a tragedy strikes your home, or you are involved in a car accident.

Liability: A person's legal responsibility for causing harm, injury, or loss to another. For instance, if you are at fault in a car accident and the other driver is wounded. As a result, you may be declared accountable and ordered to pay damages.

Limits: The maximum amount your insurance provider will pay for a covered claim. You are liable for paying any amount that exceeds the insurance company-set maximum.

Loss: Damage suffered to an insured automobile or property. This also serves as the basis for an insurance claim.

Premium: The amount paid by an insured for an insurance policy. This is usually a monthly, quarterly, or annual insurance premium payment.