A Guide to Insurance Jargon

//A Guide to Insurance Jargon

A Guide to Insurance Jargon

People who come across life-changing events and new experiences often have to assume responsibilities. With increased responsibilities come the increased requirements in terms of property, vehicles, automobiles, and even health. People usually turn to insurance programs in order to secure their futures and in order to live a relatively stress-free life, and that is a great idea on its own.

Insured Home Owners in Florida

According to the National Association of Insurance Commissioners, a hike of 3.6% occurred in the number of insured homeowners in the year 2015. Florida, the Insurance Information Institute claims, had the highest average of people whose properties were insured.

While it’s great to take precautionary measures, we believe that prior to opting for an insurance plan people should take care to get acquainted with the jargon, at least with the basics. One should always tread with care, as it helps eliminate the risk of running into later complications.

In this blog we have attempted to give you a quick rundown on the major terms used in the insurance industry and jargon which you must know before signing up for any insurance plan.

Property Insurance

Property insurance is a policy whereby the insurance company is liable to pay the filer/insured persons a compensatory amount in case of property damage. The damages may include fire, flooding, natural disasters and even theft (if the property has been damaged).

When property insurance is signed, an insurance company or a banker offers guaranteed monetary relief in case of loss. The people who buy the policy have to pay a fee in return.

The Two Lines of Property Insurance

The first kind is the “property” insurance which covers physical possessions such as a house or a car or a building used for commercial purposes. This type covers for first parties.

The second is the “casualty” insurance which covers legal liabilities. This kind covers for third parties and provides support in case a third party makes a claim.

Coverage

The amount that will be covered by an insurance company in case of damage is the insurance coverage. Whether for individuals or families, coverage is of two kinds.

The first, which is the personal line policy, includes insurance for renters, homeowners, and vehicles.

The second is the commercial line policy which covers businesses and other established organizations (such as schools or restaurants). The building used for commercial purposes and the property owned by the business are both covered in a commercial line policy. They might also cover for employees and their lost earnings, injuries, etc.

Underwriting

insurance definition

Once an application is received by an insurance company, it might be accepted, rejected, or modified. If the company modifies it in terms of the coverage, etc., it is said to have been underwritten.

Issuance

When a policy is sent to a filer the person becomes an “insured” and the policy contains:

  • A declarations page which contains all the information regarding the policy and the policyholder such as the coverage
  • Any modifications made in the application such as exclusions or conditions applied

Claim

In the aftermath of loss damage to a property, an insured makes a claim, which can be either a property claim or a liability claim.

Property Claim

The insured themselves contact the insurance company and reports the claim. The person responsible for representing your claim—called the “adjuster”—will then investigate any losses and damages you might have faced. The adjuster decides if a policy is in effect and if coverage has to be paid. This is a property claim made by the first party.

Liability Claim

When a third party contacts the company to report a claim in the event that loss or damage is sustained, a liability claim is in effect. An investigation ensues and the final decision is made on the basis of the economic and non-economic damages sustained by the claimant.

Life Cycle

A policy has a particular life cycle which is linear and follows the following ordinal pattern:

  • An application is submitted
  • The application is considered for underwriting
  • A policy is issued and the payment is made by the “insured”
  • A claim is made if damage occurs
  • The policy is renewed after a certain time period

Is Your Insurance Company Refusing to Pay?

Arnesen Webb, P.A. is a team of licensed and certified property damage lawyers who assist clients in the process of insurance claims. If your Florida-based insurance company is refusing to pay you recompense for loss or damage; or if they are underpaying you and delaying, give Arnesen Webb a call at (561) 757-6000.

By |2019-01-18T11:23:22+00:00January 24th, 2019|Blog|0 Comments

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