No matter what type of insurance you're getting for your family, whether it's home, health, auto, or life insurance, there's a lot of jargon around the policies and benefits that might confuse you. Additionally, since over 5% of insured homes had a claim filed in 2019, according to the International Information Institute, understanding the terminology is critical to getting the most out of your policy.

What Is an Insurance Claim?

One of the most common things you'll see in insurance policies is talk about a “claim.” An insurance claim is a formal, written request for the insurance company to provide coverage or financial reimbursement for a service based on the contract.

What Are Aggregate Limits?

An aggregate limit on a policy is the absolute maximum that an insurance company is willing to cover for losses within a specified period. Typically, this term is used in liability insurance policies, and the timeframe is around one calendar year.

What Is an Insurance Policy?

An insurance policy is the agreement between an individual or business and the insurance company. The policy details what payments are expected from the individual or business, and what that coverage constitutes from the insurance company in case of loss, medical procedures, and more.

What Is a Deductible?

One of the most common words in insurance terminology is “deductible.” A deductible is an amount the insurer is expected to pay out-of-pocket before the insurance company picks up the bill. Therefore, if your deductible is $1,000 and you get a bill for $1,500, then insurance will only pay the excess $500.

What Is Liability Insurance?

Liability insurance is commonly used in business. It simply refers to the insurance policy allowing the insurance company to make payments to third-party entities if the insured person is found to be at fault for losses or damages sustained.

What Is an Insurance Premium?

An insurance premium is the agreed amount that the person getting the insurance is required to pay to receive the insurance policy's benefits. This premium is typically a monthly charge, but some insurance policies might offer a yearly premium at a discounted rate.

Learning the terminology around insurance can help you better prepare for picking the best policies for your needs. Additionally, it will help you to compare benefits, coverage, and more across many insurance companies. If you have more questions about insurance terminology, contact Ramsey Family Insurance. We're happy to help.