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Insurance Demystified: 4 Frequently-Used Technical Terms You’ve Always Been Meaning to Ask About

25 May
Insurance Demystified: 4 Frequently-Used Technical Terms You’ve Always Been Meaning to Ask About

Insurance Demystified: 4 Frequently-Used Technical Terms You’ve Always Been Meaning to Ask About

Getting insurance is supposed to be one of the most common-sense decisions a person can make.  Unfortunately, from the moment people initiate this process, they suddenly become bombarded by complicated red tape and head-scratching jargon. According to a research study conducted by the Insurance Research Council (IRC) and co-sponsored by The Hanover Insurance Group “Nearly one in eight U.S. motorists is driving around uninsured and putting insured drivers at greater risk in the event of an auto accident.” One of the many reasons why people shy away from getting auto insurance is because of how confusing the industry terminology is.  Here are a few helpful explanations to guide you on your path towards getting proper coverage:

 

1.    What is an Adjuster?

An insurance adjuster is someone whose role within an insurance company is to settle any claims which have been filed by policyholders.  Adjusters examine every claim in detail to certify that payments are made based on the terms of an insurance contract.

 

2.    What is an Appraisal?

An insurance appraisal is basically a calculation of cash value.  These calculations are done depending on what type of insurance you’ve purchased, or the specific situation requiring an appraisal. Appraisals can either be conducted to determine the cash value of property, or the cash value of damage caused to property.

 

3.    What is a Claim?

An insurance claim is a formal request filed by a policyholder in order to receive financial compensation through an insurance policy.  In other words, if an accident happens and you want to make use of the coverage you’re paying for, you’ll have to let your insurance company know by filing a claim. An insurance claim can either be filed with the insurer that issued your policy, or with a completely separate insurance company you’ve never transacted with. It all depends on who or what is to blame for damage to property.

 

4.    What is a Deductible?

A deductible is essentially a down-payment of cash which you as the policyholder agree to pay out-of-pocket in the event of an accident.  This down-payment places some financial responsibility in your hands as the policyholder. It does so by setting a threshold for when an insurance company should step in and compensate victims for damages.  If damages fall below the threshold, then you have to cover the costs out-of-pocket regardless. If damages exceed the threshold however, then the insurance company will pay for all the financial obligations which exceed your down-payment.

 

Conclusion:

If you ever find yourself sitting across the table from an insurance agent, and everything they’re saying sounds like Greek, don’t be afraid to slow things down and make your discomfort known.  Even though you might feel embarrassed about not knowing the lingo, it’s more important for you to have a proper understanding of the contracts you’re entering into.  Read up as much as you can before committing to an insurance policy, and ask as many questions as necessary.  Arm yourself with knowledge so that you can make smart and efficient choices. For more information, visit our website or give us a call at 1-800-639-7654 to find out how Adriana’s Insurance Services can help you stay safe. We got you covered!