Insurance terms you need to know

Here’s a glossary of insurance terms for you to look at.

Insurance terms you need to know

Certain topics have jargon that one must be familiar with in order to achieve full understanding. In the case of insurance, there are a lot of terms related to it, you can even make a dedicated dictionary for it which can be quite a hassle. With that said, we’ve listed about 26 terms that are often associated with insurance, just be aware of the definitions as the following terms might come across when you consider insuring yourself or your other valuables in the future.

If you’re a little overwhelmed by this list, don’t worry, we have a simpler article that lists down 10 of the most important and most common terms that you will need to know and understand. 

Why should you be familiar with these terms?

Car insurance Philippines

Insurance may be a tricky subject. For the uninitiated, you may find it difficult to process certain words that mean something else given a different context. Understanding these terms will help you better-navigate the world of car insurance, and even insurance in general.

  1. Insured - It could either be a person or entity that an insurance policy provides coverage for. 
  2. Insurer - Pertains to the company or organization that provides insurance policies to the insured. 
  3. Carrier - Carrier is another term for ‘insurer’ which pertains to the insurance company that provides you with your policy.
  4. Adjuster - Also known as a ‘claim examiner’, the adjuster is responsible for investigating a claim. Through this, they are able to determine whether the loss is covered by the policy or not.
  5. Agent - An insurance agent is the one who sells insurance policies for an insurance company or carrier. They could either sell insurance for a single carrier or several carriers. 
  6. Assured - This term refers to the person who is insured or a policyholder. 
  7. Claim - A claim actually refers to any request for payment within the bounds of an insurance policy.
  8. Claimant - This refers to the person or entity requesting payment from an insurer. 
  9. Coverage -  Specific protections or benefits provided by your preferred insurance company. You can find the following on your declarations page. Plus, it’s also outlined in your policy or contract.
  10. Declarations page - A page containing important information regarding your insurance policy and what is covered. 
  11. Named insured - Refers to a named individual or entity that an insurance policy covers which can be found on the declaration page.
  12. Damage - In insurance, damage refers to the loss or harm done to a person or property.
  13. Damages - Don’t confuse this with damage, as damages pertain to the actual money one individual or party must legally pay to another. 
  14. Deductible - It’s the amount of money that the insured must pay before the insurance company takes over. In other words, it will be the amount of your share with the damages covered by the insurance company. 
  15. Estimate - It refers to the overall repair or replacement cost of a property when damaged. An estimate is provided through conducting proper inspection and evaluation.
  16. Liability - Liability is the responsibility one party has for causing damage, injury, or loss to a person, property, or any other entity.
  17. Limits - In the insurance context, limits usually pertain to the maximum amount of protection the insurance company agrees to pay for a specific coverage in any given claim. For more information, you can find this at your policy declaration page.
  18. Loss - The term loss refers to the damage caused to insured property. 
  19. Premium - In the insurance context, premium refers to the amount of money the insured must pay the insurance company in exchange for coverage. 
  20. Policyholder - This term usually appears on the declarations page, with it pertaining to the person or entity an insurance policy covers.
  21. At-fault - ‘At-fault’ is associated with the person who is liable for the damages caused to the insured.
  22. Bodily injury - From the name itself, this term pertains to an injury of a person sustained from an accident.
  23. Covered loss - A covered loss refers to any damage or injury that an insurance policy provides protection for. 
  24. Actual cash value - Actual cash value is one such method of valuing the insured property. This is done by subtracting the amount of depreciation from the initial cost of the property. Notably, actual cash value coverage is a less expensive insurance option during moset cases.
  25. Electronic Funds Transfer (EFT) - It’s a payment method wherein the insurance company electronically deposits the amount into your bank account. 
  26. Replacement cost coverage - A way of insuring your property without subtracting depreciation due to normal use or wear and tear.