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.

General terms:

Deductible - Deductibles reduce the price of insurance because you pay a predetermined amount of the loss or expense BEFORE the insurer pays. You select the deductible and the higher you choose, the lower your premium.

Premium - This is simply the amount you or your company pays to the insurance company in exchange for their coverage and benefits provided.

Property and Casualty - this describes a part of the insurance industry that covers damage to property or persons injured in an accident. Auto, home-owners and business liability insurance fall under this category.

Life and Health - This is the other section of the insurance industry that doesn’t fit under the property and casualty category.

Umbrella Policy - This is a general term implying broader coverage than a basic policy would typically offer can. For example, homeowner insurance that includes coverage for general lawsuits would be considered umbrella insurance.

Auto Insurance:

Collision - Just as the name implies, this is the part of your auto insurance policy that pays for repairing damages to your car after the deductible.

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 - Half of the states have no-fault insurance which pays for losses no matter who is at fault in the accident.

Health 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 - A Federal law that requires companies to offer health coverage to employees for a period of time after they have left the company. The ex-employee generally pays for this insurance at group rates.

Co-payment - This is a health insurance term for how the portion you pay for a visit or procedure. After your co-payment and deductible the insurance company covers the rest of the bill.

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 insurance bought for a specified time (or term). If the insured dies during this time period, the insurance is paid. If not, the insurance coverage expires or must be renewed to keep the benefit.

Universal Life - A Life policy accompanied by a savings plan tied to market rates of interest and the benefits are not fixed but can change within boundaries.

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 lowest cost insurance policies for their needs. If you’d like to learn 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.