Insurance basics
This general term refers to a financial agreement that provides protection against possible loss.
insurance
This optional coverage pays for damage to your vehicle resulting from a collision with another vehicle or object, even if you are at fault.
coverage
The fixed dollar amount a patient pays for a covered service at the time of each visit, like to a doctor's office or when picking up medicine.
copayment (or co-pay)
This type of insurance protects a tenant's personal property in case of damage or theft.
renters insurance
Renters) The specific type of policy endorsement that removes depreciation and allows a tenant to replace their ten-year-old laptop with a brand new one.
Replacement Cost Value (RCV)
A payment made to the insurance company, often monthly, to keep the policy active.
premium
This type of coverage is legally required in most states and pays for injuries and property damage you cause to other people in an accident.
coverage
The percentage of medical costs you must pay for a covered service after you've met your deductible, such as 20% of the bill.
coinsurance
This coverage pays the full cost to repair or replace a damaged item with a brand new one of similar quality, without factoring in depreciation.
replacement cost value (RCV)
The maximum amount you are financially responsible for in a calendar year; once this limit is reached, the insurance plan covers 100% of all further covered services.
out-of-pocket maximum
This is the amount you must pay out of pocket before your insurance starts covering costs.
deductible
This coverage pays for damage to your car from things that are not collisions, such as theft, vandalism, fire, hail, or hitting a deer.
coverage
This plan offers more flexibility, allowing you to see both in-network and out-of-network providers (though at a higher cost for the latter) and typically does not require referrals.
Preferred Provider Organization (PPO)
The formula used to calculate ACV: Replacement Cost minus this equals the payout (before the deductible is applied)
depreciation
This federal insurance is for people 65 years old or with certain disabilities.
Medicare
In insurance terms, this is the specific term for the uncertainty or chance of loss occurring.
risk
This coverage protects you if you are in an accident caused by a driver who has no insurance or insufficient insurance to cover the costs.
uninsured/underinsured motorist coverage
A health plan that combines aspects of an HMO and a PPO, requiring a PCP referral for in-network care but allowing out-of-network options at a higher cost.
Point of Service (POS) plan
The value used to calculate a claim payout when depreciation is factored into the item's worth at the time of the loss.
Actual Cash Value (ACV)
This type of health plan requires in-network use and a PCP referral.
HMO (Health Maintenance Organization)
The initial portion of a covered loss or medical expense that the insured is responsible for covering before the insurer's liability begins.
deductible
This state system requires your own insurance to pay for your medical expenses and lost wages after an accident, regardless of who was at fault.
no-fault insurance (or Personal Injury Protection/PIP)
This 2010 law expanded Medicaid and prevents insurers from rejecting coverage based on a patient's pre-existing condition.
Affordable Care Act (ACA) (or Obamacare)
This type of policy may pay the ACV first, and then pay the remaining difference to reach the RCV after the policyholder submits receipts for the new items.
replacement cost value (RCV)
Your percentage of costs you must pay after meeting your deductible.
co-insurance