The world is full of uncertainties and there is always danger around the corner. Therefore, risk management is something that we need to protect us from these unfortunate events. The most common risk management is insurance. Insurance comes in many types and there is one in almost every entity. One of the most common is car or vehicle insurance. This insurance is great help financially in the likely event of road accidents. You can get a claim in exchange of your premiums. I know, terms like “premiums” and “claim” can be confusing for the uninitiated. So, let me shed some light regarding these things.
Needless to say, one must need to understand and know the insurance lingo before even attempting to dwell into the intricacies of automotive insurance. It is through getting knowledge and information that one is able to get the best and most effective insurance policies. Employing a broker is a good idea but entrusting them with every little thing is not. It is to your advantage if you attempt to know more about insurance so you can work things out on your own without any help from brokers. This way, you make your own wise decisions while saving some hard-earned cash.
Here are some basic definitions:
- Insurer – the company or organization that provides the insurance plan to the insured
- Insured – sometimes referred to as the insuree, it is the person that owns the insurance policy
- Policy – the document or contract between the insured and insurer
- Premium – the monthly payment made by the policy holder to maintain the validity of policy
- Claims – demand for payment in accordance with an insurance policy
The person that mediates between you and the insurance companies is what the industry call a broker. The insurance broker is different from an insurance agent because the latter can offer different proposals or bids from various providers of insurance while the latter is merely an agent of a specific insurance company.
For an event that you encountered an accident, a car crash for instance, you–as a policy holder–should submit a request to your insurer to reimburse or pay you for the damages and expenses that occurred in such incident. This won’t be a problem as long as it is covered by your insurance. This request for financial assistance from an insurance provider is known as a “claim”.
There are numerous terms to learn when it comes to specific insurance like automotive and the ones given is only the tip of the iceberg but fundamental. You can search on the internet and educate yourself. There are countless of websites and posts about these things.