You know, talking about insurance gets complicated. From the seemingly endless changes that occur every so often to keeping transparent with potential and long-term clients, “talking shop” tends to result in too many questions with technical answers. We’ll be first to admit, insurance may not be the most exciting conversation. We believe a major reason talking insurance can be daunting comes down people getting lost in the lingo. Condensing complex topics into very basic explanations may be easy for some but harder for others. It’s never too late to learn the basics and brush up on terminology.
When it comes to talking to your agent, their goal is to be as transparent as possible, but what if you don’t even know the basics? We’re here to help you with some “Insurance 101”.
First: What is insurance?
Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.
Simply put, insurance is financial protection against losses that can incur in a person’s life.
What about policies and coverage?
Insurance policies are contracts that give an individual or entity terms of agreement between them and the insurance company. These contracts serve as a procedural plan of action in case a loss occurs. Policies cover financial obligations that may be too much of a burden to pay at a single moment.
Whatever you plan on having coverage for will be the basis of the policy and will be listed in plain English.
What is a “loss”?
Legal definition: “A loss is the injury or damage sustained by the insured in consequence of the happening of one or more of the accidents or misfortunes against which the insurer, in consideration of the premium, has undertaken to indemnify the insured.”
What does this mean?
A loss can mean many things, but for a basic look, we will consider this an accident or unfortunate event in your daily life. If you have been injured in said accident, the insurance company may help you pay for expensive bills that may result from this event. This is where you need to understand your coverage.
Fun fact: This one word has spawned over thousands of businesses employing millions of people per year! All of whom are looking to protect others! How cool is that?
How many types are there?
It is hard to get definitive answers due to the sheer amount of coverage available for almost anything you can think of. Luckily, insurance categories exist and help you to prioritize what to shop for. The major categories are as follows:
- Auto Insurance – Coverage for vehicles against unfortunate events
- Homeowners & Renter’s Insurance – Coverage of your physical property and personal property
- Life & Health Insurance – Coverage of your personal health and wellness
- Business Insurance – Coverage of a company, and its innerworkings
- Umbrella – Additional financial backing paired with other policies
While these “big 5” major insurance segments are broad, each of them will have subcategories and even niche markets. Remember, the skies the limit. Oh, that reminds us, the sky may be a source of natural disasters, which is why there are also markets for hurricanes, wind, flood, and other atmospheric and earth-related perils.
So, can anything be insured?
It’s 2020 after all and anything is possible! We’re sure there is a book on bizarre and uncommon insurance policies. We published a blog outlining a few unconventional businesses that we have been able to insure. Check it out here!
Will there be more articles like this one?
We’re so glad you asked, we’ve been hard at work wrapping up some amazing resources for you. We have some big stuff to announce so please stick around! Your best bet is to check out our blog to be in the loop!
What if I want to talk to you now?
Feel free to drop us a line at service@harrisinsurance.com.
Or call us (during our business hours) to speak to an agent at 850.244.2111
If you’re looking for a one-stop solution to filing a claim or paying your monthly insurance bills, check this article out!
LEGAL DISCLAIMER
Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.
