Insurance Terms
Comprehensive – this is a term often used in the automobile insurance industry. It refers to a policy that includes collision, liability and other coverage. There is no “complete” coverage policy in the automobile insurance industry to date.
Deductible – the amount you will have to pay out of pocket before you insurance policy kicks in.
Depreciated value - this is coverage that will cover the value of the item at the time the claim is filed (it deducts for the age and condition of the item).
Claim - this is the actual demand made by the insured to the insurance company for payment based on the terms of the policy.
Exclusions - limits and conditions placed on the coverage of a policy.
Gap insurance – a separate auto insurance policy that will cover the difference between what is owed on an automobile and the amount that the insurance company will pay in the event the automobile is totaled.
Health Savings Account - pre-tax account that can be utilized for approved medical expenses.
High Deductible Health Plan - health insurance policy that covers catastrophic medical needs (or coverage after a very high deductible is met, usually $2000 and up). It is used in conjunction with a Health Savings Account.
Liability – insurance that protects the policy holder against judgments from accidents (up to the monetary limits set by the policy).
Out of Pocket - amount that the insured party is required to pay with each claim that is filed. Most often found in health insurance policies.
Pre-Existing Condition - medical conditions that limit the coverage of a health insurance policy until after a pre-determined waiting period.
Premium - is the amount of money that is paid for the insurance coverage. Some policies have yearly premiums and others have monthly or quarterly premiums.
Replacement cost - this is coverage that will pay the actual amount it costs to replace the insured item.