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It doesn’t matter if you’re shopping for Car, House, Health, Life or Commercial insurance – if you don’t know the jargon you’re likely to wind up over-paying or buying the wrong insurance coverage. Here’s a useful guide to some of the more crucial insurance terms to keep you on the right track.

Insurance (in general):

Deductible – Deductibles are used in auto, health and homeowners insurance to reduce the overall cost of insurance by you assuming some of the damages or expenses BEFORE the insurance company pays for the remainder. Usually you choose the amount of the deductible and the higher the amount you choose, the lower your insurance premium.

Premium – the premium is the cost of the insurance. It is how much you or your company pays for the coverage.

Property and Casualty – this identifies a part of the insurance industry that handles impairment to property or individuals hurt in an accident. Auto, householders and commercial liability insurance fall into this category.

Life and Health – This is the part of the insurance industry that covers life and health insurance as opposed to property and casualty.

Umbrella Policy – This is broader coverage than the original underlying policy. For example, a homeowner’s policy that also includes a general liability provision of $1 million for personal lawsuits might be considered an umbrella policy.

Automobile Insurance:

Collision – Collision insurance covers the damages to your vehicle from a collision or accident.

Comprehensive – Comprehensive insurance covers the “non-collision” types of losses to your vehicle like fire, flood, vandalism or theft.

Liability – this is the aspect of your insurance coverage that compensates for losses to a 3rd party like personal injury, property impairment or pain and suffering. Householders policies also usually have liability coverage to protect you from assorted cases of personal injury suits.

No-fault – About 50% of the states have “no fault” laws which require insurance companies to pay for damages to vehicles, property and person no matter who is at fault in the accident.

Medical Insurance:

Ancillary Care/Coverage – Ancillary is a term for “extra” or “additional” or “associated.” It is for insurance policies that not only cover common health benefits but also have additional (ancillary) insurance coverage for prescription medicine or eye care, etc.

Cobra – Cobra is a U.S. law that compels organizations to offer extended health-care insurance coverage to dismissed employees for a specified time period. This insurance coverage is generally paid for by the ex-employee but at group rates.

Co-payment – An amount much your insurance requires you to pay for each visit to the doctor’s office, or for other care. The insurance company then pays the remainder of the bill assuming the deductible has been met.

Fee for Service – This is the type of health Insurance that allows you to select any Doctor and pays for some agreed percentage of “reasonable and customary” fees. You then end up paying the difference.

H.M.O. – HMOs give comprehensive medical coverage for a set fee. But they require you to use their facilities and medical employees thus limiting your choice.

P.P.O. – “PPOs” are networks of physicians who offer their services at a discount negotiated by the insurance company. Thus insurers will normally pay a bigger portion of your expenses when you use these “preferred providers.”

Life Insurance:

Annuity – These are policies that pay while a person is alive for a specified period of time. They are usually offered by life insurance companies.

Term Life – Term life is a form of life insurance purchased for a specific period (term) of time. If the person dies during this period, the insurance is paid. If not, the coverage expires or must be renewed to maintain the benefit.

Universal Life – A Life insurance policy attached to a savings vehicle tied to market interest rates and where the benefits are not fixed but may change within limits.

Whole Life – A traditional life insurance policy that accumulates cash value over the life of the policy at a fixed rate and with pre-determined premiums. The insurance benefit is also a fixed and guaranteed amount.

Chris Carbukel enjoys helping others buy the best and most economical insurance policies for their needs. If you’d like to know more visit his new website Insurance-Price-Quotes.org where you can learn how to get the best deals on all kinds of insurance including finding the best Home Insurance Comparison.