With all kinds of different coverages for all kinds of different needs, insurance can be very confusing. And to make it even more challenging, at times it probably seems like insurance websites and policy documents are written in a completely foreign language.

Of course, that's why we recommend working with an independent agent like ours at Saunders Insurance Agency—someone who is on your side during the process and who can explain everything you need to know.

Even if you do work with agents at Saunders Insurance Agency, it's good to have a little basic knowledge about insurance. Below are definitions for some common terms that will help you understand your coverage a little better.

GENERAL INSURANCE TERMS

·   Actual Cash Value: This type of coverage pays according to what an item was worth at the time it was damaged—it takes depreciation and wear and tear into account. For example, if you could have sold your couch for about $200 just before it was damaged, that's the actual cash value, even if a similar new couch would cost $1,000.

·   Replacement Cost: This pays the amount it would cost to replace a damaged item with a new one (such as the $1,000 couch above). It does not factor in depreciation or wear and tear.

·   Adjuster: A person who works for an insurance company to evaluate losses and settle claims.

·   Additional Insured: Someone who is not the policyholder, but is still covered by an insurance policy.

·   Declarations Page: This is what creates a contract between you and the insurance company. It describes who owns the policy, what property is covered and for how much, etc.

·   Deductible: The amount you agree to pay out of pocket before your insurance coverage kicks in. For example, if the cost to fix your car is $2,000, but your deductible is $1,000, you would pay $1,000 of the total cost. Typically, a higher deductible means a lower premium.

·   Endorsement: This is a change to your insurance policy's coverage, usually made through a special form.

·   Exclusion: Something specifically listed in your policy that is not covered by the policy.

·   Liability: Your responsibility for injuries or damage to other people or property. You purchase insurance to protect against liability and other risks.

·   Loss of Use: When damage from an accident or other cause prevents someone from being able to live in their home or drive their car.

·   Med Pay (Medical Payments): This pays for medical expenses for those covered by your policy in the event of an auto accident, regardless of fault. It also covers medical expenses for guests if they are injured on your property, but unless it is a car accident, it usually does not cover injuries someone suffers on their own property.

·   Premium: The amount you pay for an insurance policy.

·   Subrogation: When an insurance company pays a claim, and then seeks damages from a third party who was responsible for causing the damage or loss. For example, your insurance company might pay for your car to be fixed even though an accident wasn't your fault—and then pursue reimbursement from the person who was at fault.

·   Term: The period of time your insurance policy is in effect, usually six or 12 months.

·   Umbrella: A policy that provides additional liability coverage. It kicks in after your other insurance policies have reached their coverage limits.

·   Underwriting: The evaluation process insurance companies use to determine if they will provide coverage to a customer.

AUTO INSURANCE TERMS

·   Aftermarket Parts: Vehicle parts made by a different company than the one that manufactured those originally included with the vehicle.

·   Bodily Injury Coverage: Covers expenses for physical injuries, such as hospital bills or medical care. Ohio’s minimum requirement is $25,000 per person / $50,000 per accident, but we recommend purchasing at least a $100,000 per person / $300,000 per accident limit and more if possible.

·   Collision Coverage: This pays for damage to a vehicle caused by you or someone else covered by your policy.

·   Comprehensive Coverage: If your vehicle is damaged by something you could not control, such as fire or a tree falling, comprehensive coverage applies.

·   Uninsured/Underinsured Motorist (UIM): Pays for your damages and expenses if another driver is at fault in an accident but does not have enough insurance to cover your costs.

HOMEOWNERS INSURANCE TERMS

·   Additional Living Expenses: Coverage for expenses above your usual living expenses, such as if you have to stay in a hotel because you can’t live in your damaged home.

·   Catastrophe: A disaster, such as a hurricane or tornado, that impacts a specific area and results in significant damage.

·   Flood Insurance: Typically, standard homeowners policies do not provide coverage for flooding—it must be purchased separately.

·   Home Contents: These are the things inside your house that aren't fixed to the structure, such as your furniture, appliances, etc.

·   Peril: A specifically defined risk, such as hail, flooding, wind, etc.

·   Scheduled Personal Property: Separate coverage for high-value items, such as expensive jewelry, that exceed the limits of your policy or are otherwise excluded.

If something isn't clear when you're buying or considering insurance, don't be afraid to ask questions! Saunders Insurance Agency’s agents are here to help you get the coverage you need—and make sure you understand it, too.