Much of the difficulty of insurance comes down to vocabulary. Understanding a handful of common terms makes your documents far easier to read.
Core policy terms
The premium is the amount you pay for coverage. The deductible is the amount you pay out of pocket before coverage applies. The limit is the maximum the policy will pay for a covered loss. The declarations page is the personalized summary of your policy. Together, these four terms describe the basic financial structure of nearly every policy.
An endorsement, or rider, is an amendment that changes the standard policy. An exclusion is something the policy specifically does not cover. Understanding these terms helps you see how a policy is built from grants of coverage, limits, and exceptions.
People and parties
The named insured is the person or entity the policy is written for. An additional insured is a party added to the policy, often by endorsement, who receives some of its protection. The insurer or carrier is the company that issues the policy and pays covered claims. The agent is the person who sells and services the policy.
Knowing who is who in the insurance relationship helps you direct your questions to the right party and understand the roles each plays in your coverage.
Claims terms
A claim is a request for payment under the policy. An adjuster is the person who evaluates a claim. A loss is the event or damage for which a claim is made. Subrogation is the process by which an insurer that has paid a claim seeks recovery from a responsible third party.
These terms appear throughout the claims process. A basic familiarity with them allows you to follow the process and communicate clearly when a claim is underway.