Different Insurance Terms

Here are some common insurance terms explained:

1. Premium: The amount of money an individual or business pays to an insurance company in exchange for coverage against specified risks.

2. Policy: A contract between an insurance company and the policyholder that outlines the terms and conditions of the insurance coverage, including the coverage limits, exclusions, and premiums.

3. Deductible: The amount of money that the policyholder must pay out of pocket before the insurance company begins to cover the costs of a claim.

4. Coverage: The extent of protection provided by an insurance policy against specified risks or perils. Coverage can vary depending on the type of insurance policy and the specific terms of the policy.

5. Claim: A formal request made by the policyholder to the insurance company for payment or reimbursement of expenses covered under the insurance policy.

6. Policyholder: The person or entity that owns an insurance policy and is entitled to receive the benefits of the coverage provided by the policy.

7. Insurer: The insurance company that provides coverage and assumes the risk of loss or damage specified in the insurance policy in exchange for payment of premiums.

8. Beneficiary: The person or entity designated to receive the benefits of an insurance policy in the event of the policyholder's death or other specified circumstances.

9. Underwriting: The process by which an insurance company evaluates and assesses the risks associated with insuring a particular individual or property, and determines the terms and conditions of coverage.

10. Exclusion: Specific risks, perils, or circumstances that are not covered by an insurance policy, and for which the insurance company will not provide compensation or benefits.

11. Endorsement: A written amendment or modification to an insurance policy that alters or adds coverage, terms, or conditions to the original policy.

12. Liability: Legal responsibility or obligation for damages or injuries caused to another person or property, for which the policyholder may be held accountable and may be covered under an insurance policy.

Understanding these insurance terms can help policyholders make informed decisions when purchasing insurance coverage and navigating the claims process.