Understanding Insurance Terms
We at Castell Insurance know the language used by the insurance industry can be confusing. We want to make sure that you clearly understand your options and know precisely what you’re paying for.
Here are some terms we use for types of coverage. There are also a variety of other terms that might be unfamiliar to you. We hope this glossary helps make the world of insurance easier to understand.
Additional Living Expenses
If you can’t live in your home because of a covered loss, your insurance company may pay the necessary increase in living expenses while damage is assessed and your home is repaired or rebuilt.
Broad Form Liability Coverage
Helps protect you from expenses related to injuries or property damage you or your watercraft cause in an accident. Some policies also cover certain accidental fuel spill liabilities and wreckage removal.
Any medical insurance program that has a deductible greater than 1850.00 per year is considered Catastrophic.
C.L.U.E. (Comprehensive Loss Underwriting Exchange) is a claims history database created by ChoicePoint that enables insurance companies to access consumer claims information when they are underwriting or rating an insurance policy. It typically contains up to five years of personal auto or personal property claims history.
You can order a C.L.U.E. report:
LexisNexis Personal Reports
Call toll free 1-866-312-8076
Or you can request a copy from the seller of a home you are purchasing.
The amount paid by the patient after the deductible is met. Traditionally either 20%, 25%, 30%, 50% of contracted amount.
Pays to repair your auto, classic auto, motorcycle, RV damages caused by an accident. Your agent can help you determine the limits you need based on the agreed value of your vehicle.
Individual programs with a deductible less than 1850.00 per year, and include at least prescription drug coverage and maternity coverage.
Group programs may have a higher deductible but usually include prescription and Maternity coverage.
Amount negotiated by the insurance company and the doctor or hospital for a specific procedure.
- For Part D
Coverage that is at least as good, or better than Medicare Coverage. Typically most group programs are considered creditable. Leaving “Creditable” coverage allows for a waiver of the Late Enrollment Penalty (LEP) for Part D.
- For Individual Major Medical
Most group policies are considered “Creditable” . This allows for the purchase of individual programs with a waiver of pre-existing waiting periods. 24 months is the required period of Creditable coverage for full waiver of all waiting periods.
Custom Parts & Equipment Coverage
Many motorcycle owners like to customize their rides, and some policies pay for customized parts and equipment, often at no extra charge. Ask Castell Insurance for details.
When you get insurance, you agree to pay up to a certain amount out-of-pocket in case of a loss. This amount is called your “deductible.” The deductible you choose often affects how much you pay for your premium. For example, a higher deductible usually means a lower premium. In the case of a covered loss, you’ll only be required to pay your deductible, and the insurance company usually covers the excess, up to the applicable limit for that loss under your policy.
Emergency & Roadside Assistance
For auto, boat and personal watercraft, emergency assistance pays for the cost of towing or emergency service. For RVs, it also covers housing and transportation costs if your RV becomes uninhabitable and covers the loss of personal property in your RV. Some policies also provide roadside assistance for motorcycles.
Sometimes used interchangeably with “umbrella”, “excess liability” refers to extended liability coverage. This coverage is meant to supplement your insurance coverage if the damages exceed your liability coverage. Be sure to talk to Castell Insurance about what your excess liability covers.
This applies as the Deductible does. 3 coinsurance maximum amounts before the insurance company will pay 100%.
This is typically 3 deductibles for a Family. Regardless of how many family members are on a program. If one member of the family gets sick 3 deductibles must be met before the insurance company will pay anything. This is the reason that most couples and families should all have individual policies, and not be listed as dependents on one program.
Companies and businesses often purchase this coverage to protect them against loss from employee dishonesty (such as theft of money, equipment, or other assets).
Health Maintenance Organization- A group of Doctors or health care providers that are contracted with or paid by the insurance company, The patient must use these doctors EXCLUSIVELY, or the insurance will not pay for a procedure.
Identity theft occurs when someone steals your personal information and uses it to open accounts or incur charges without your permission. Thieves can access your personal information in a variety of ways, such as stealing your personal mail, your wallet, or hacking your computer files. The thief then uses your identity to rack up debt in your name or perhaps to issue fake IDs. For more information on identity theft and tips on prevention visit the FTC’s Identity Theft Site.
Providing indemnity means to financially restore someone after a loss, through payment, repair or replacement.
An Credit Based Insurance Score (CBIS) is derived from information on your credit report. It is a number that measures likelihood of having an insurance claim – not a measure of credit worthiness. Insurers use CBIS along with a number of other factors, including driving records, claims history, and the type of home or vehicle owned, to evaluate new and renewal auto and homeowner insurance policies.
Medical Coverage (Home)
Covers medical expenses for guests if they are injured on your property, and in certain cases covers people who are injured off of your property. It does not cover healthcare costs for you or other members of your household.
Medical Coverage (Auto, Boat & Personal Watercraft, Motorcycle, RV)
Provides for your passenger and your medical expenses that are the result of an accident.
Liability & Personal Liability Coverage
For homeowners, this coverage applies if someone is injured or property is damaged and you are to blame. The coverage applies anywhere in the world. When choosing liability coverage for your home, auto, boat, personal watercraft, or RV, consider things like how much money you make and what you own. Your liability coverage should be high enough to protect your belongings if you are sued.
Out of Pocket Maximum
The amount of CO-INSURANCE, that must be paid by the patient, in a calendar year before the insurance company pays 100%.
Personal Property Coverage
Your home is filled with furniture, clothes, sports equipment, and other items that mean a lot to you. This coverage helps repair or replace these items if they are lost, stolen or destroyed as a result of an insured event.
Personal Watercraft (PWC)
A personal watercraft (PWC) is a recreational watercraft that the rider sits or stands on, rather than inside of, as in a boat. Models have an inboard engine driving a pump jet that has a screw-shaped impeller to create thrust for propulsion and steering.
Physical Damage Coverage for Watercraft
Pays to repair the damage done to your watercraft due to an accident. It also generally pays to repair or replace your watercraft for insured situations such as theft, fire, vandalism or other non-collision damages that occur in or out of the water
Preferred Provider Organization-A group of healthcare providers who are contracted with the insurance company. The patient may go out of network to see other providers but, will pay a higher percentage of the cost.
Simply put, a premium is the payment you make in exchange for one term of policy coverage.
Property or Dwelling Coverage
Typically pays to repair or rebuild your home if it’s damaged or destroyed by an insured event.
Scheduled Personal Property Coverage
If you have special possessions such as jewelry, art, antiques or collectibles, you may want to talk to your agent about this additional coverage.
Umbrella insurance is the coverage that may kick in when your losses under other insurance policies, such as homeowner’s and auto coverage, have exceeded policy limits.
Underwriting is the process of assessing risks when deciding whether to issue a policy of insurance.
Uninsured/Underinsured Motorist Coverage
Pays for damages associated with bodily injury or death from an accident caused by an uninsured, underinsured or hit-and-run driver, as defined by the law in the jurisdiction where the accident occurred, who is at fault. It also covers you if you are hit as a pedestrian.
Unattached Equipment Coverage
Pays to repair or replace equipment that isn’t permanently attached to your boat or personal watercraft. This includes items like life jackets and water-skis.