A-to-Z Insurance Glossary
A fun and simple guide to insurance terms, plus an overview of different insurance categories—without the boring jargon!
Types of Insurance & What They Cover
Auto Insurance 🚗
Covers damage to your car, other people's cars, injuries from accidents, and sometimes even theft. Basically, it keeps you from crying too hard if your car gets smashed.
Health Insurance 🏥
Pays for medical bills, hospital stays, surgeries, and sometimes even check-ups. It's like having a financial first aid kit for when life hits you with a medical emergency.
Property Insurance 🏡
Protects your home or business building from disasters like fires, floods, and break-ins. Because your house is expensive, and life loves surprises.
Disability Insurance 🏋️♂️
Pays you if you can't work due to illness or injury. Think of it as financial crutches while you recover.
Life Insurance 💀💰
Gives money to your family (or whoever you choose) when you pass away. Basically, your way of saying, "I got you," from the afterlife.
Travel Insurance ✈️
Covers lost luggage, trip cancellations, medical emergencies abroad, and sometimes even delays. Because vacations shouldn't be stressful.
Business Insurance 🏢
Protects businesses from risks like lawsuits, property damage, and employee injuries. Keeping entrepreneurs from losing their minds (and money).
Specialty Insurance 🎸
Covers unique things like pets, weddings, collectibles, and even body parts (yes, celebs insure their legs!). If it's rare, weird, or valuable, there's probably insurance for it.
Education Insurance 🎓
Saves and secures funds for your child's education in case of emergencies. Because tuition fees don't wait for financial stability.
A-to-Z Insurance Glossary
A – Actual Cash Value (ACV)
The amount your insured item is worth today, after accounting for depreciation. (Spoiler: It's always less than you paid.)
B – Bodily Injury Liability
Pays for injuries you cause to others in a car accident. Because fixing people is way more expensive than fixing cars.
C – Collision Coverage
Pays to repair your car after an accident, no matter who's at fault. Like a "reset" button for your ride.
D – Deductible
The amount you pay out of pocket before your insurance kicks in. Think of it as your financial "skin in the game."
E – Exclusion
Specific situations or conditions your policy won't cover. Always read the fine print!
F – Free Look Period
A grace period (usually 10-30 days) where you can cancel your policy and get a full refund if you're not satisfied.
G – Grace Period
The extra time you have to pay your premium after the due date before your policy lapses. Don't push it too far, though!
H – Hazard
A condition or situation that increases the likelihood of a loss, like driving in a storm or storing fireworks in your garage.
I – Indemnity
The principle that insurance restores you to the financial position you were in before a loss—no more, no less.
J – Joint Policy
A policy that covers two or more people, like a married couple or business partners.
K – Key Person Insurance
A policy that protects a business from financial loss if a key employee (like the CEO) dies or becomes disabled.
L – Liability
Your legal responsibility for damages or injuries caused to others. Liability insurance covers these costs.
M – Moral Hazard
When someone takes bigger risks because they're insured. For example, driving recklessly because you know insurance will cover the damages.
N – No-Claim Bonus
A discount on your premium for not making any claims during the policy period. It pays to be careful!
O – Out-of-Pocket Maximum
The most you'll have to pay in a year for covered services. After this, your insurance covers 100% of costs.
P – Premium
The amount you pay for your insurance policy, usually monthly or annually. Think of it as your membership fee for peace of mind.
Q – Quotation
An estimate of how much your insurance will cost. It's not final until you sign the policy.
R – Rider
An add-on to your policy that provides extra coverage for specific situations, like flood damage or critical illness.
S – Subrogation
When your insurance company steps into your shoes to recover money from a third party who caused your loss.
T – Term Life Insurance
A policy that provides coverage for a specific period (e.g., 10, 20, or 30 years). If you pass away during the term, your beneficiaries get the payout.
U – Underwriting
The process insurers use to evaluate your risk and decide whether to offer you coverage—and at what price.
V – Valuation
The process of determining the value of your insured property, like your home or car.
W – Waiting Period
The time you have to wait before certain coverages kick in, like for pre-existing conditions in health insurance.
X – Exclusion
Specific situations or conditions your policy won't cover. Always read the fine print!
Y – Yearly Renewable Term
A type of term life insurance that renews every year, usually with increasing premiums.
Z – Zero Deductible
A policy with no deductible, meaning the insurance company pays for covered losses from the first dollar.