Insurance terms, defined.
The words that appear on quotes, declarations pages and renewal notices in Florida, explained in a sentence or two.
General
- Premium
- The amount you pay for a policy, monthly or yearly.
- Deductible
- The part of a covered loss you pay before the insurer pays the rest.
- Declarations page
- The first page of a policy. It lists who and what is insured, the limits, the deductibles and the premium.
- Limit
- The most an insurer will pay for a covered loss under a part of the policy.
- Exclusion
- Something a policy states it does not cover, such as flood on a homeowners policy.
- Endorsement
- A change added to a policy that widens, narrows or clarifies its coverage.
- Underwriting
- The insurer's review of an application to decide whether to offer coverage and at what price.
- Independent agency
- An agency appointed by several insurers and owned by none of them, so it can compare options for a client.
- Binding
- The point at which coverage is confirmed and in force. A quote or a form request does not bind coverage.
Home and flood
- Hurricane deductible
- A separate deductible for damage from a declared hurricane, usually 2%, 5% or 10% of the home's insured value. It applies once per calendar year with the same insurer.
- Replacement cost
- Coverage that pays for a new item or repair without deducting for age and wear.
- Wind mitigation inspection
- A report on the features that help a home resist wind, such as roof straps and shutters. Insurers must give credits for them, and the report is valid for five years.
- Four-point inspection
- An inspection of the roof, electrical, plumbing and air conditioning, often required for homes more than about 20 years old.
- Citizens
- Citizens Property Insurance Corporation, Florida's state-backed insurer for homes that cannot get a comparable private policy.
- Takeout offer
- An offer from a private insurer to take over a Citizens policy. If it is within 20% of the Citizens premium, the policy can no longer stay with Citizens.
- Loss of use
- Coverage for hotel and extra living costs when a covered loss leaves your home unfit to live in.
- Catastrophic ground cover collapse
- Coverage every Florida home policy includes. Broader sinkhole coverage is optional.
- NFIP
- The National Flood Insurance Program, the federal program that covers up to $250,000 for a home and $100,000 for contents.
- Flood zone
- A mapped measure of year-round flood risk that affects insurance. It is different from an evacuation zone, which is based on storm surge.
- Waiting period
- The time between buying a policy and coverage starting. Federal flood policies normally have a 30-day wait.
Auto
- Personal injury protection (PIP)
- Required Florida coverage that pays 80% of your medical bills and 60% of lost wages up to $10,000, whoever caused the crash.
- Property damage liability
- Required Florida coverage for damage you cause to someone else's vehicle or property, with a $10,000 minimum.
- Bodily injury liability
- Coverage that pays when you injure someone else. It is optional at registration in Florida.
- Uninsured motorist coverage
- Pays your injuries when the driver at fault has no injury coverage or too little.
- Stacked coverage
- Uninsured motorist coverage whose limit is multiplied by the number of vehicles on the policy.
- Collision
- Pays to repair or replace your own car after a crash, whoever was at fault.
- Comprehensive
- Pays for damage to your car from theft, flood, hail, fire or a falling tree.
- SR-22
- A certificate your insurer files with the state to prove you carry liability coverage, usually required for three years.
- FR-44
- A filing required after a DUI in Florida, with much higher liability limits than an SR-22.
Health and Medicare
- Open enrollment
- The yearly window for buying a Marketplace health plan: November 1 to January 15.
- Premium tax credit
- Monthly savings on a Marketplace plan for households with income between 100% and 400% of the federal poverty level.
- Qualifying event
- A change such as losing coverage, marriage, a birth or a move that gives you 60 days to enroll outside open enrollment.
- Out-of-pocket limit
- The most you pay for covered care in a year. After that the plan pays in full.
- Network
- The doctors and hospitals a plan has contracts with. Care outside it can cost more or not be covered.
- Medicare Advantage
- A private plan that combines Medicare Parts A and B, usually with drug coverage, a network and a yearly out-of-pocket limit.
- Medicare Supplement
- A standardized policy that pays costs Original Medicare leaves behind and works with any provider that accepts Medicare.
- Part D
- Medicare prescription drug coverage from a private plan.
- Annual Notice of Change
- The letter a Medicare plan sends each September listing next year's changes to costs and benefits.
Life and business
- Term life insurance
- Life coverage for a set period, usually 10 to 30 years, at the lowest cost.
- Whole life insurance
- Coverage for life with a fixed premium and a cash value that builds over time.
- Beneficiary
- The person or people you name to receive a life insurance payout.
- Rider
- An addition to a life policy, such as waiver of premium on disability.
- General liability
- Business coverage for injury or property damage the business causes to others, including legal defense.
- Business owner's policy
- A package that combines general liability, property and lost income coverage for a small business.
- Certificate of insurance
- A one-page proof of coverage that customers, landlords and building departments ask a business for.
- Workers' compensation
- Coverage for medical care and lost wages when an employee is hurt on the job.
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