Insurance terms made easy – Foremost

Insurance has its own terms which can be tough to understand sometimes. This beginner’s guide to insurance terminology will teach you the must-haves to put in your dictionary.

For the precise definitions, please refer to your insurance policy.

Claim:

A demand by a person or business seeking to recover from an insurer for a loss that may be covered by an insurance policy.

Coverage:

The specific protection provided by a policy against the results of the hazards insured against.

Deductible:

A certain dollar amount beyond which insurance protection begins. The insured assumes the loss up to the deductible limit and the insurer pays the remainder, up to the policy limit.

Exclusions:

The section of the policy contract that specifies the losses not protected by the policy. Many of Foremost’s policies provide Comprehensive coverage – that means that any cause of loss that’s direct, sudden and accidental is covered, unless it is specifically excluded in the policy. This is broader coverage than a Named Peril contract, which provides coverage only for the causes of loss (perils) that are listed (named) in the policy.

Peril:

The specific event causing a loss, such as fire, windstorm or accidental death.

Policy:

The written contract effecting insurance, or the certificate thereof, by whatever named called, and including all clauses, riders, endorsements, and papers attached thereto and made a part thereof.

Premium:

A periodic payment by the insured to the insurance company in exchange for insurance coverage. Foremost offers a wide variety of discounts that can lower your premium, and we offer payment plans that can help you manage your premium payments in a way that works with your budget.

Replacement Cost:

The cost of replacing or repairing property using new materials of like kind and quality without deduction for depreciation.

Risk:

The hazard or chance of loss on any particular item of insurance. The term “risk” usually is used in a general way to designate the entire subject matter of insurance covered under a policy or upon which an application for insurance has been received. Risk is also sometimes used to designate a policyholder.

Quote:

The rate at which an insurance company indicates its willingness to assume certain liabilities or provide coverage under an insurance policy. A quote is an approximation of the premium for a given policy.

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