Watch any insurance TV commercial and you’re likely hear terms like ‘deductible’ and ‘premium’. Those words are part of basic insurance terminology used by both businesses and consumers. Being unfamiliar with such terms can make it difficult when purchasing the insurance policy that best suits one’s needs.
We’re listing 10 commonly used insurance terms that you’ll benefit from knowing. To find out about additional terms, visit the Glossary page at the Infinity Insurance Knowledge Center.
1. Adjuster
A claims or insurance adjuster is employed by or acts on behalf of an insurance company to examine, evaluate and settle insurance claims. The adjuster must determine the cause of loss, whether the loss is covered by the policy, the value of the loss and the amount of loss payable by the policy. After the evaluation, the adjuster will calculate the insurance company’s potential liability to the insured and negotiate to settle the case.
2. Certificate of Insurance (COI)
While some may confuse a COI with a Declaration Page because both list similar information, a COI also includes space for:
- the name of the organization requesting a certificate, known as the Certificate Holder
- the Certificate Holder’s conditions, exclusions or specific language required
3. Claim
According to Investopedia, an insurance claim is a formal request to an insurance company for coverage or compensation for a covered loss or policy event. The process for filing a claim should be smooth and efficient. Infinity uses smart technology to make the process as easy on you as possible.
4. Declaration Page
Often referred to as your "dec page," this is a one-page coverage summary that lists the insurance company name and address; name and address of policyholder; policy number and effective dates: start and end dates of coverage; the actual coverage in the contract including limits, premiums and deductibles, and where and how to file a claim. It’s recommended that all the information on this document be carefully reviewed for correctness (check for misspellings of name or incorrect address of policyholders). It's important to understand what and how much is covered, and what is excluded.
5. Deductible
The amount of money paid by the insured in a claim before the insurance company kicks in. The insurance company will deduct this amount from the claim payment. This Knowledge Center article covers deductibles extensively. Deductibles and premiums are inextricably linked: higher deductible = lower premium, and vice versa.
6. Liability Coverage
Liability insurance or coverage protects the insured against claims from injuries and damage to other people and/or property.
7. Peril
A specific cause of loss that puts an insured item, property or person at risk of injury, loss or damage. An example could be fire, windstorm, flood or theft.
8. Premium
Amount paid to insurance companies in return for taking on a portion of the risk. The amount depends on different factors, including the coverage limits and deductibles one chooses.
9. Risk
The possibility of losses, some of which is transferred from insured to insurer for a specific period according to a policy agreement. Insurance companies set prices based on their evaluation of risk.
10. SR-22/ FR-44
A Certificate of Financial Responsibility (CFR) is required by some states for high-risk drivers. The difference between an SR-22 and an FR-44 is that the second requires the purchase of additional liability insurance; currently in force in Florida and Virginia.
The preceding was a quick selection of commonly used basic insurance industry terms. For additional information on insurance vocabulary, be sure to browse our glossary page.
Make sure that you have a reliable team at your service for your insurance needs. Call an Infinity agent at 1-800-INFINITY or get an online quote today.
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