It’s a safe bet that, at some point in your life, your home- or auto-insurance policy is going to be used — whether you’re rear-ended on your way to work or a kitchen fire claims your new cabinets. Here are some basic insurance terms that can help you communicate when you need to file a claim.
Policy: The written contract stating the conditions of your insurance coverage.
Agent: The person who sells and services insurance policies.
Adjuster: A person who investigates claims and recommends settlement options based on estimates of damage and insurance policies held.
Claim: A demand made by the insured, or the insured’s beneficiary, for payment of the benefits as provided by the policy.
Indemnity: Restoration to the victim by payment, repair, or replacement.
Coverage: The scope of protection provided under an insurance policy. In property insurance, coverage lists insured perils (the cause of a loss, e.g. fire), properties covered, locations covered, individuals insured, and the limits of indemnity.
Coinsurance: Property insurance requires policyholders to carry coinsurance — insurance equal to a specified percentage of the value of property — in order to be eligible for full payment on a loss. Read more about insuring to value at grinnellmutual.com.
Actual cash value: Cost of replacing damaged or destroyed property with comparable new property, minus depreciation and obsolescence. For example, a 10-year-old sofa will not be replaced at current full value because of a decade of depreciation.
Qualifying event: An occurrence that triggers an insured’s protection.
Deductible: Amount of loss that the insured pays before the insurance kicks in.