When you’re traveling or going on vacation, you download Duolingo or ask Google Translate to tell you how to order your favorite latte – but it can feel a bit trickier when it comes to translating your insurance policy. That’s where Cheep Insurance comes in!
We’ve put together some commonly used insurance words to help you understand what your broker is talking about when they contact you to discuss your policy.
Quote
Before you buy insurance, you get a quote. It’s like asking how much something will cost before you decide to buy it. While the quotes that brokers provide need to be confirmed by the insurance company, if you are honest with your broker, the price should be correct, or reasonably close.
Coverage
Coverage describes what tangible items your insurance protects. For example, car insurance may cover damage to your car if it is in an accident, and home insurance covers your home and personal belongings.
Peril
A peril is simply the cause of the damage. For example, if you have a house fire, the “peril” covered under your insurance policy is fire.
Premium
This is the amount of money you pay to have insurance coverage. Your premium is the price you pay per year for your insurance policy. This is usually broken into monthly payments, depending on how you choose to pay.
Deductible
If something happens and you need to use your insurance, this is the amount of money you must pay before your insurance starts to help. For example, if you are in a car accident and the cost to repair your vehicle is $5000 and you have a $500 deductible, you will have to pay the first $500 before the insurance pays the rest.
Claim
When something bad happens and you need to use your insurance, you make a claim. Reporting a claim is how your insurance company is notified that they need to reach out to you and let you know what the next steps are, and how you get paid for damages.
Liability
Liability basically means responsibility. If you cause an accident, your insurance might help pay for the damage you caused. That’s called liability coverage. You may hear “PLPD” or “Liability only” for car insurance – this is the minimum coverage you need on your car insurance to drive in Canada – so, if you cause damage to a person or property while driving your vehicle and are found legally responsible, liability insurance covers some or all the damage.
Binding Coverage
This means finalizing your insurance policy or a change to your insurance policy. Your broker can “bind coverage” on the phone or via email for you, ensuring you have coverage immediately, even if the insurance company does not complete the policy or make the change until a few days later.
Endorsement
Sometimes, you might want to change or add something to your insurance policy. Making an endorsement just means making a change to your current policy terms or coverages.
It’s always better to ask questions and understand, rather than feel left in the dark – that’s what the Brokers at Cheep Insurance are here for, we’re your Rosetta Stone. If you have questions about the wordings or coverages of your policy, reach out to our Service Team today!
Most policies insured with Cheep Insurance are Agency Bill/IFS financed policies. You can determine who manages your payments by following the directions below. If you are still not sure who manages your payments, call our team as funds paid directly to the insurance company when they should go to IFS will cause large delays.