Insurance terms and concepts- Do you know them all?

Are you considering purchasing an insurance policy but have no idea what they are talking about? Do you feel like you’re getting lost in the sea of jargon and acronyms? If so, it’s time to brush up on your insurance terms and concepts! Read on for the definitions of 20 of the most commonly used terms in the insurance industry.

 

Life Insurance
There are several reasons to consider buying life insurance. There’s no one reason that makes sense for everyone, but it does make sense for most people to have a policy in place for their family’s protection. Life insurance helps loved ones meet unexpected expenses, pay off debts or save money for future goals such as college tuition. It also serves as a financial safety net if a family member suffers from a disability or requires long-term care.

 

Disability Insurance
When an employee is disabled due to illness or injury, there are usually two kinds of insurance that provide financial help: short-term disability (STD) and long-term disability (LTD). STD pays out a percentage of your salary, typically 60% to 66%, for as long as three months, but will not pay out in excess of 26 weeks.

 

General Liability Insurance
This kind of insurance is designed to help protect your business from legal liability (liability in case someone gets hurt on your property, for example). Some general liability policies also provide coverage for property damage. General liability insurance covers accidents at your business premises, but some policy may include coverage if an employee is driving a company vehicle and gets into an accident.

 

Auto Insurance
You may have a car, but do you understand your auto insurance coverage? When it comes to your auto insurance policy, there are two parts to be aware of: liability coverage and collision/comprehensive coverage. It’s important to note that these coverages are legally required in every state; however, some people choose to carry more coverage than is legally required. Keep reading for more info on these essential auto insurance policies.

 

Pet Health Insurance
What is pet health insurance? Pet health insurance allows owners to take their pets to any veterinarian they choose, saving time and money. Coverage can be individual or group coverage. People with pre-existing conditions should have no problem obtaining coverage through a group plan. Individual plans tend to be more expensive than group plans. There are several options for arranging payment, such as a fixed amount each month, per claim, or in one lump sum at enrollment.

 

Business Owners Policies (BOP)
A business owner’s policy (BOP) combines property, liability, medical payments to others, and medical payments to yourself into one bundle that protects against these exposures. An umbrella policy can be added on top of a BOP to provide broader protection against some types of additional liability. These are usually purchased by an individual but sometimes businesses buy them for their officers or key employees.

 

Homeowners Policies Section
Section I (Coverage A) Coverage A includes seven sections of coverages that are important to a home insurance policy. These coverages include: 1. Dwelling, 2. Other Structures, 3. Personal Property, 4. Loss of Use, 5. Hazardous Activities/Storing or Manufacturing Materials/Pollution Exclusion, 6.

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