It’s true: from riders to deductibles, insurance can be confusing sometimes. However, knowing a few industry terms makes things a lot easier. That’s why we have rounded up 10 terms you need to know to make sense of insurance.
30/60/25
This term describes the minimum liability levels required for auto and motorcycle insurance in Texas. This is how it breaks down:
- At least $30,000 of coverage for injuries per person.
- Up to a total of $60,000 per accident.
- $25,000 of coverage for property damage.
To learn more about auto insurance in Texas, check out this previous post.
Actual Cash Value (ACV)
This term is commonly used in home, auto, and business insurance. ACV refers to the cost of replacing your personal property minus depreciation. Not to be confused with the cash value component of a life insurance policy (see below).
Cash Value
Cash value is a part of some types of life insurance. While term life insurance offers only a death benefit, some permanent insurance policies also include a cash value component, which works like an investment account that allows you to build capital. Not to be confused with “actual cash value” (see above).
Claim
When you ask your insurance company to reimburse you for a problem covered by your policy (for example damage to your home or your car), you are filing a claim.
Coverage
This refers to the level of protection provided by an insurance policy. In some cases (as with auto insurance) there are legal minimum coverage requirements. In other cases, you are free to decide the level of coverage that makes sense for you.
Declarations Page
Also called “dec page,” the declarations page is usually the front page of an insurance policy. It includes basic information such as the name of the policyholder, the property covered by the policy (for example, your car), and the premiums you have agreed to pay.
Deductible
Is the amount you agree to pay out of pocket before your insurance kicks in. Choosing a high deductible is one of the simplest ways of lowering your premiums. However, you should make sure to keep your deductible reasonable so that you are able to cover it should an accident happen.
Policy
This term refers to the written insurance contract between the insurance company and the policyholder (you).
Premiums
This is the amount you agree to pay (usually every month) in exchange for insurance coverage. Depending on the type of insurance you need, there are different strategies to lower your premiums. Contact the experts at BZBee Insurance if you’d like to learn more.
Rider
Also called an endorsement, a rider is an optional add-on to an insurance policy. This allows you to get more personalized protection. For example, when you insure your motorcycle, you can ask your insurance agent to include a rider for custom parts or road assistance.
Looking for Insurance in Houston, Texas? BZ Bee Is Here to Help!
From life insurance to auto insurance and everything in between, BZ Bee Insurance Services is the way to go. We are located in Houston, Texas, and serve clients all over the Lone Star state.
To get a free quote, just contact us by email (ayalamariaeugenia@yahoo.com) or telephone (832-729-8114), or fill out the contact form on this website.
