Property And Casualty Insurance Terminology
Sam Friedman (Editor-in-Chief, National Underwriter, Property & Casualty Edition) gives expert video advice on: What is an "insurance claim"? and more...
What is an "insurance premium payment"?
Essentially an insurance premium payment is what you owe for the insurer to offer you coverage. It's the bill you are going to get that says you have to pay this premium. You either pay it in full; many carriers will offer you an installment plan. If you do pay on installment there might be some additional charges, so you should ask about that when you see your agent. Essentially, the insurance premium payment is just the amount of money the insurance company needs to collect from you in order to assure you complete coverage.
What is an "insurance deductible"?
An insurance deductible is the amount of loss that you pay out of your own pocket, even if you have insurance. This is negotiated as part of the policy with your insurance agent and carrier. Usually it's pretty standard, for example a $250 or $500 deductible on your homeowner's insurance policy. One of the reasons an insurance deductible is in place is to discourage people from putting in small claims in abundance. The insurance is really there to cover you in case of a catastrophic, serious loss. If, for instance, you have a $500 deductible and you have a $5,000 loss, you would pay the first $500 and then the insurer would pick up the rest from there.
What is an "insurance claim"?
An insurance claim is when you suffer a loss for which you want your insurer to cover you. It could be that your home is damaged, roof perhaps is partially blown off in a windstorm, tree comes down and bangs into your garage, someone slips and falls in your icy driveway and files a suit against you, your building is burglarized and you lose some of your property. In any of those cases what you do is you file an insurance claim, which is essentially documentation saying what you lost, what the circumstances of the loss were and at that point the insurer will examine this. If everything checks out they will reimburse you under the terms of the policy, so that you can either repair the damage, replace any items that are lost or defend yourself against any suits that are filed by individuals you might have harmed.
What is an "insurance adjuster"?
An insurance adjuster is an individual sent by an insurance company to examine a claim. Essentially, an insurance adjuster is there to verify what kind of loss you had and what the circumstances were, so the insurance company can go ahead and pay the claim. For instance, if you have a windstorm that blows a tree into the garage and severely damages it, the insurance adjuster will take pictures of the tree still sticking out of your garage, for example, and take a look from the interior to see what kind of damage was done. The insurance adjuster will report back to the insurer, and then the insurer can proceed with paying the claim.
What is "insurance coverage"?
Insurance coverage is pretty much the terms of the deal. When you pay a premium you're getting certain circumstances or personal property covered by the insurer. It could be your home. It could be your personal possessions. It could be your personal assets if someone is injured by you and sues to try to recover for that. The insurance coverage terms lay out what types of situations and properties are insured, what kind of conditions they are insured under and what the limits are of coverage. In other words, insurance coverage is how much the insurer is willing to pay to make you whole again.