Definition Series for the Insurance Illiterate: Underwriting

Definition of Underwriting [uhn-der-rahyt-ing] // the process an insurance company uses to determine if someone is eligible for insurance and, if so, how much that person should pay for insurance. You do not have to take a 100-question exam to get insurance, but underwriters do want to know as much information as possible. Different elements […]

Definition Series for the Insurance Illiterate: Replacement Costs

Definition of a Replacement Cost [ri-pleys-muh-nt kawst] // the cost to repair or replace property with material of similar kind and quality at today’s prices without deduction for depreciation. It’s like Actual Cash Value but without  depreciation. EXAMPLE OF REPLACEMENT COST John is a decent golfer unless he’s keeping score. He hits the links once […]

Definition Series for the Insurance Illiterate: Premiums

Definition of a Premium [pree-mee-uh m] // an amount of money paid to an insurance company in return for an insurance policy. It’s a money transaction. A “buy this get that” situation. EXAMPLE OF PREMIUM “Hi, I’m Steve. I’m kind of new to this. I was getting a quote on my home and it said […]

Definition Series for the Insurance Illiterate: Peril

Definition of Peril [Per-uh l] // exposure to or cause of a possible loss, such as bodily injury or property damage (fire, lightning, theft). In plain English, something bad that happened. EXAMPLE OF PERIL “My dog Mr. Snuggles ate our couch. Is this an insured peril?” INSURELY SAYS… If Mr. Snuggles rips through your couch […]

Definition Series for the Insurance Illiterate: Deductible

Deductible [dih-duhk-tuh-buh l] Definition of Deductible // the amount you agree to pay out of pocket for damage resulting from a specific loss or insured peril. The things about an accident is that you never see it coming. Even a physic. When disaster happens, a deductible is your agreed upon amount of money that you […]

Definition Series for the Insurance Illiterate: Appraisal

Appraisal [a-prazel] Definition of Appraisal // an evaluation of your insurance claim by an authorized person to properly value your damaged property or item(s). Unfortunately, your insurance company can’t just take your word for it (trust issues and the law) because your property and/or items might need to be appraised by someone who is approved […]

Definition Series for the Insurance Illiterate: Actual Cash Value

Let’s face it when shopping for home insurance, you’ve probably come across a few terms that leave you feeling baffled. Even the explanation of these terms is not very helpful, and you might as well be reading a book in German. You want to be an informed shopper and we want you to feel confident […]