Millennials often get a bad rap from those senior to them. The older generations see us as irresponsible, or maybe a little too free spirited. We are usually price-conscious, but we still expect quality and service. One thing that most people don't realize about millennials is that while we are price-conscious, we are still concerned about protecting our assets, and we’re willing to pay for insurance to do so.
If you’re a millennial, here’s a list of terms that you’ll hear from your insurance agent and/or see on your policy. (We borrowed these definitions from A.M. Best, a nationally-recognized insurance company rating organization, and tweaked some of them to remove some insurance jargon. You can find a more comprehensive list of terms on A.M. Best’s resources site here!)
Adjuster - A representative of the insurer who seeks to determine the extent of the insurer's liability for loss when a claim is submitted.
Captive Agent - A representative of a single insurer (or fleet of insurers) who is obliged to submit business only to that company. (Examples: Geico, State Farm, Allstate)
Claim - A demand made by the insured (you) for payment of the benefits as provided by the policy.
Coverage - The scope of protection provided under an insurance policy.
Deductible - The amount of loss that the insured (you) pays before the insurance kicks in. (You might be familiar with this based on a comprehensive and collision deductible on your car insurance policy, or a hurricane deductible on your homeowners insurance policy.)
Exclusions - Items or conditions that are not covered by the general insurance contract.
Hazard - A circumstance that increases the likelihood or probable severity of a loss. For example, the storing of explosives in a home basement is a hazard that increases the probability of an explosion.
Indemnity - Restoration to the victim of a loss by payment, repair or replacement.
Independent Agent - An agent who represents at least two insurance companies and (at least in theory) services clients by searching the market for the most advantageous price for the most coverage.
Liability - Broadly, any legally enforceable obligation.
Liability Insurance - Insurance that pays and renders service on behalf of an insured for loss arising out of his responsibility, due to negligence, to others imposed by law or assumed by contract.
Peril - The cause of a possible loss.
Policy - The written contract effecting insurance.
Premium - The price of insurance protection for a specified risk for a specified period of time.
Reinsurance - In effect, insurance that an insurance company buys for its own protection. The risk of loss is spread so a disproportionately large loss under a single policy doesn't fall on one company.
Renewal - The automatic re-establishment of a policy effected by the payment of another premium.
Total Loss - A loss of sufficient size that it can be said no value is left. The complete destruction of the property. (The term is sometimes used to mean a loss requiring the maximum amount a policy will pay.)
Underwriting - The process of selecting risks for insurance and classifying them according to their degrees of insurability so that the appropriate rates may be assigned. The process also includes rejection of those risks that do not qualify.
If you’re ever unsure about what a term or coverage is, or don't understand it, just email us! We would love to help you. You should always understand what you are purchasing, especially when it comes to insurance!