Insurance terms, in plain English

What property was worth immediately before a loss, accounting for depreciation — not what you paid for it and not what a new replacement costs.

This is usually the basis for a totalled-vehicle payout, which is why the figure often surprises people.

The person or entity you name to receive a life insurance death benefit.

Beneficiary designations on the policy generally control the payout, and a will does not override them. Review them after any marriage, divorce, birth, or death.

Temporary proof that coverage is in place while the full policy is being issued.

The accumulating account within a permanent life policy that you can generally borrow against or surrender.

Loans reduce the death benefit if unpaid, and surrendering ends the coverage.

A request to the insurer for payment under the terms of your policy.

A window after a life policy is issued during which the insurer can investigate and rescind coverage for material misrepresentation on the application.

The practical implication: answer application questions accurately, because an error found later can cause a claim to be denied.

The maximum an insurer will pay for a covered loss. Policies often have several limits applying to different parts of the coverage.

A score built from credit report information and designed to correlate with insurance claims, used by many insurers in pricing where state law permits.

It is not your credit score and weights things differently. Several states prohibit or heavily restrict its use in auto rating.

The summary page of your policy listing who and what is covered, the limits, the deductibles, and the premium.

This is the single most useful document to have in front of you when comparing quotes.

The amount you pay toward a covered loss before the insurer pays. Raising it lowers your premium and raises your out-of-pocket cost at claim time.

Something a policy specifically does not cover.

Exclusions are where two similar-looking policies usually differ most. Read them before comparing prices.

A window after a policy is delivered during which you can review it and cancel for a refund. Length varies by product and state.

A period after a missed premium payment during which coverage remains in force and the policy can be brought current.

Coverage issued without health questions or underwriting, within a stated age range.

Typically includes an initial period during which death from natural causes returns premiums rather than the full benefit.

A genuine stake in the continued life or property being insured. It's required for a policy to be valid.

The termination of coverage for non-payment of premium.

A lapsed policy may be reinstatable within a limited window, sometimes requiring evidence of insurability.

The identifier the insurer uses for your specific contract. It appears on the declarations page, your ID cards, and every piece of correspondence.

Worth telling whoever would have to make a claim where to find it. Families lose time at the worst moment looking for it.

A condition that existed before coverage began or during a waiting period. Commonly excluded, particularly in pet insurance.

Definitions vary between insurers, including whether a resolved condition still counts. Ask specifically.

What you pay for coverage, usually monthly or annually.

In pet insurance, the share of a covered bill the plan pays after the deductible is met.

Ending one policy and taking another in its place.

Most states impose specific disclosure requirements when a life policy is being replaced. Never cancel the old policy until the new one is issued and in force.

An optional addition that changes a policy's coverage, usually for extra premium.

The insurer's process of assessing risk to decide whether to offer coverage, and on what terms.

Auto coverage that responds when the at-fault driver has no insurance or not enough of it. Availability and requirements vary by state.

Time between when a policy starts and when certain coverage becomes available.

Different waiting periods often apply to different things within the same policy.