Policy
Fundamentals.
Master the core concepts of insurance to make informed decisions about your protection.
1. Core Terminology
Premium
The amount you pay periodically to keep your insurance policy active.
Deductible
The amount you pay out-of-pocket before your insurance coverage kicks in.
Limit
The maximum amount an insurer will pay for a covered loss under a specific policy.
Claim
A formal request to your insurance company for payment based on the terms of your policy.
2. Primary Coverage Types
Most insurance policies are composed of different coverage "parts" that protect against specific risks.
Liability Coverage
Protects you if you're legally responsible for injuring someone or damaging their property. This is your most critical protection against lawsuits.
Collision & Comprehensive
Physical damage protection for your own assets (like your car or home). Collision covers accidents; Comprehensive covers 'acts of God' like hail, fire, or theft.
Uninsured/Underinsured
Protects you if you're hit by someone who either doesn't have insurance or doesn't have enough to cover your medical expenses.
3. Understanding Exclusions
Every policy has "exclusions"—specific situations or items that are NOT covered. Common examples include intentional acts, normal wear and tear, or specific high-risk activities.
Pro Tip:
"Always review your 'Declarations Page' annually. It's the one-page summary that lists exactly what you're paying for and what your limits are."