Midland-Odessa and West Texas folks want to know their insurance will cover them. Sometimes, that takes understanding insurance terminology we often use in the industry. Welcome to our glossary of insurance terms, designed to help you understand the key concepts and terminology used in home, auto, commercial, and life insurance. This resource is intended to provide clear definitions that can assist you in making informed decisions about your insurance needs.
Home Insurance Terms
- Deductible: The amount you pay out of pocket for a claim before your insurance coverage kicks in.
- Premium: The cost of your insurance policy, typically charged monthly or annually.
- Liability Coverage: Protects you if someone is injured or their property is damaged and you are to blame.
- Actual Cash Value (ACV): The value of your property, considering depreciation, at the time of the loss.
- Replacement Cost: The cost to replace damaged property with new property of similar kind and quality, without deducting for depreciation.
Auto Insurance Terms
- Collision Coverage: Pays for damage to your vehicle resulting from a collision with another car or object.
- Comprehensive Coverage: Covers damage to your vehicle caused by events other than a collision, such as theft, fire, or natural disasters.
- Uninsured/Underinsured Motorist Coverage: Provides protection if you’re in an accident caused by a driver who either has no insurance or insufficient insurance.
- Policy Limit: The maximum amount an insurance company will pay for a covered loss.
- No-Fault Insurance: A type of auto insurance where policyholders are compensated by their own insurer, regardless of who caused the accident.
Commercial Insurance Terms
- General Liability Insurance: Protects businesses from financial loss resulting from claims of injury or damage caused to others by you or your employees.
- Workers’ Compensation: Covers medical costs and a portion of lost wages for employees who become injured or ill on the job.
- Professional Liability Insurance (Errors & Omissions): Protects professionals against claims of negligence or harm due to professional services provided.
- Business Interruption Insurance: Compensates for lost income and helps pay for ongoing expenses if your business is unable to operate due to a covered loss.
- Commercial Property Insurance: Covers damage to your business property and equipment from covered events like fire, theft, and natural disasters.
Life Insurance Terms
- Beneficiary: The person or entity designated to receive the death benefit of a life insurance policy.
- Term Life Insurance: Provides coverage at a fixed rate of payments for a limited period of time, the relevant term. After that period, coverage expires without value.
- Whole Life Insurance: Permanent life insurance with a cash value component in which the policyholder can accumulate wealth.
- Universal Life Insurance: A type of permanent life insurance that offers adjustable premiums and has the potential to accumulate cash value over time.
- Death Benefit: The amount paid to the beneficiary upon the death of the insured.
We provide this glossary to educate on insurance terms. For more detailed information on specific policies or situations, please contact our insurance professionals.
