Brokers/Producers/Agents: These are individuals or entities that sell policies to consumers. They may be independent agents/brokers, like Coverage Cat who work for themselves and sell the policies of multiple insurance companies, or they may be captive agents, who work for a single insurance company and can only sell that company's policies (i.e., State Farm only sells via captive agents). Producers are licensed by their state's insurance department and help consumers understand the coverage options available to them, as well as the terms and conditions of the policies under consideration. They may also provide assistance with the claims process if a policyholder experiences a covered loss.
Carriers or Insurers: Companies that underwrite and provide policies to consumers. Carriers evaluate the risks associated with insuring an individual or entity, determine the premiums that will be charged for coverage, and pay out claims to policyholders when they experience a covered loss. Some carriers specialize in certain types of insurance, such as life insurance or property and casualty insurance, while others offer a range of insurance products.
Claims Agent or Adjustor: An employee or contractor of the carrier who processes events and payouts on behalf of the insurer. Adjustors handle this process after the initial intake by the claims agent, but for the person who purchased the policy they serve essentially the same role.
Coverage: The amount of protection provided by a policy. In the case of renters insurance, this may include protection for personal belongings, liability, and additional living expenses. In the case of homeowners insurance, this may include protection for the home itself, personal belongings, and liability. In the case of auto insurance, this may include protection for the vehicle itself, personal belongings, and liability.
Deductible: The amount of money that the policyholder is required to pay out-of-pocket before the insurance company will cover a claim.
Exclusions: Events or circumstances that are not covered by a policy. Exclusions are listed in the policy and may include intentional acts or criminal activities.
Personal belongings: The items owned by the policyholder that are covered by a policy. In the case of homeowners, renters, or condo insurance this may include items such as furniture, clothing, electronics, and other personal possessions. In the case of auto insurance this may include items such as clothing, electronics, and other personal possessions that are in the vehicle at the time of a covered loss.
Liability: The legal responsibility for damages or injuries caused to others. Renters, homeowners, auto, and umbrella insurance usually include liability coverage, which can protect the policyholder from financial responsibility in the event of a lawsuit.
Limits: The maximum amount of money that the insurance company will pay for a covered claim.
Perils: The specific events or circumstances that are covered by a policy. Homeowners, condo, and renters insurance policies usually cover perils such as fire, theft, and certain natural disasters. Umbrella insurance policies cover perils such as accidents, injuries, and property damage.
Premium: The amount of money that the policyholder is required to pay for their policy. The premium is paid on a monthly or annual basis.
Rider: A provision that can be added to a policy to provide additional coverage or protection. Riders are often used to add coverage for high-value items, custom car parts or equipment in auto insurance or jewelry or collections in homeowners, renters, and condo insurance.
Underwriters: Individuals or teams of professionals who work for insurance carriers and evaluate the risks associated with providing insurance coverage to potential policyholders. Underwriters play a critical role in helping insurers manage their risks and ensure that they are able to pay out claims to policyholders when necessary.
Additional living expenses: Also known as loss of use, these are costs that may be incurred if the policyholder's rental unit becomes uninhabitable due to a covered event, such as a fire or natural disaster. These expenses may include temporary housing and other necessary expenses.
Association policy: A type of policy that covers the common areas and exterior of a condominium building, as well as any shared amenities, and is purchased and managed by the condominium association.
Condo insurance: A type of policy that provides coverage for the individual unit owner of a condominium.
Homeowners Association (HOA): A homeowners association is a nonprofit organization that manages a community of homes. It is made up of homeowners who live in the community and is responsible for enforcing the rules and regulations set forth in the community's governing documents, such as a homeowner's association covenant or deed restrictions. The HOA often handles maintenance and improvements for common areas within the community.
Homeowners insurance: A type of policy that provides coverage for the physical structure of a home, as well as the personal belongings and liability of the individuals who own the home.
National Flood Insurance Program (NFIP): Is a program run by the Federal Emergency Management Agency (FEMA) that provides flood insurance to homeowners, renters, and businesses in participating communities. The program is designed to help protect people and property from the financial impact of flood damage and to help communities recover from flood events.
Residential Condominium Building Association Policy (RCBAP): a type of insurance policy that covers the common areas of a condominium building, such as the lobby, hallways, and elevators. The policy is typically purchased by the condominium association and covers damages to the building's common areas as well as liability for injuries that occur within the common areas.
Renters insurance: A type of policy that provides coverage for the personal belongings and liability of individuals who rent their living space, such as an apartment or house. Renters and condo insurance does not include replacement cost of the home so it's cheaper than homeowners insurance.
Replacement cost: The cost to replace an item with a new item of similar quality and value. Homeowners and renters insurance policies provide coverage on a replacement cost basis, which means that the policy will pay the cost to replace damaged or stolen items.
Special Flood Hazard Area (SFHA): is a designated area on a flood map that has a high risk of flooding. These areas are identified by the Federal Emergency Management Agency (FEMA) and are typically located in floodplains or other areas prone to flooding. Property owners in an SFHA are required to purchase flood insurance if they have a mortgage from a federally regulated or insured lender.
Structure of the home: The physical structure of a home, including the walls, roof, and foundation. Homeowners insurance provides coverage for the structure of the home in the event of a covered loss, such as a fire or natural disaster.
Unpaid principal balance (UPB): is the remaining amount of money that a borrower owes on a loan. It is the amount of the loan that has not yet been paid off, including any unpaid interest and fees. The UPB is typically reduced over time as the borrower makes payments on the loan.
Unit owner: An individual who owns a unit in a condominium building and is responsible for insuring the interior of the unit.
Coverage A: Also known as dwelling coverage, provides protection for the physical structure of the policyholder's home, including the walls, roof, and other permanent fixtures. This coverage can help pay for the repair or replacement of the policyholder's home if it is damaged by a covered event, such as a fire or severe weather. Coverage A is chosen based on the estimated replacement cost of the home.
Coverage C: Also known as personal property coverage, provides protection for the personal belongings of the policyholder, such as furniture, clothing, and appliances. This coverage can help pay for the repair or replacement of the policyholder's personal property if it is damaged by a covered event, such as a fire or theft. The amount of coverage C that is included in a homeowners policy is often based on a percentage of the dwelling coverage (coverage A), and may be subject to certain limits and exclusions.
Coverage E: Also known as personal liability coverage, provides protection for the policyholder against claims or lawsuits that result from accidents or injuries that occur on their property or that are caused by the home’s enumerated inhabitants. This coverage can help pay for the policyholder's legal expenses and any damages they may be required to pay if they are found to be liable for an accident or injury. Coverage E may also provide coverage for certain incidents that occur off the policyholder's property, such as accidents involving their pets or damage caused by their personal belongings.
Coverage B: Also known as other structures coverage, provides protection for structures on the policyholder's property that are NOT attached to the main dwelling, such as sheds, garages, and fences. This coverage can help pay for the repair or replacement of these structures if they are damaged by a covered event, such as a fire or severe weather. The amount of coverage B that is included in a homeowners policy is often based on a percentage of the dwelling coverage (coverage A), and may be subject to certain limits and exclusions.
Coverage F: Medical bills or payments associated with an event in the home.
Auto insurance: A type of policy that provides coverage for vehicles, including cars, trucks, and motorcycles.
Collision coverage: Coverage that protects the policyholder's vehicle in the event of a collision with another vehicle or object.
Comprehensive coverage: Coverage that protects the policyholder's vehicle from losses caused by events other than a collision, such as theft, fire, or natural disasters.
First Notice of Loss (FNOL): The initial report that a policyholder makes to their carrier when they experience a covered loss. This notice includes basic information about the loss, such as the date and time it occurred, a description of what happened, and the policyholder's contact information. The first notice of loss is an important step in the claims process that initiates the investigation into the loss and helps the insurer determine what is covered under the policy.
Medical payments coverage: Coverage that helps pay for medical expenses for the policyholder and passengers in the event of an accident.
Uninsured/underinsured motorist coverage: Coverage that protects the policyholder in the event of an accident caused by another driver who does not have adequate insurance.
Excess liability: The amount of liability coverage that is provided by an umbrella policy beyond the limits of your existing policies.
Umbrella insurance: A type of personal liability insurance that provides additional coverage beyond the limits of your existing policies, such as your auto or homeowners insurance.
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