Insurance 101: The Ultimate Glossary of Must-Know Terms
Insurance can feel like a maze of confusing jargon. But understanding the key terms is crucial for making informed decisions about protecting yourself, your loved ones, and your assets. Let's decode the insurance lingo together!
Business Building
A structure used for commercial activities to generate income.
Business Insurance
Protects businesses from a variety of risks, including property damage, liability claims, and business interruption.
Business Interruption Insurance
Covers lost income and expenses if your business is forced to close temporarily due to a covered loss.
Business Property
Commercial buildings, their contents, or both.
Cancellation
The termination of your insurance policy before the end of the policy period.
Capacity
The supply of insurance available to meet demand, dependent on the industry's financial ability to accept risk.
Cash Value
The savings component of a permanent life insurance policy that can be borrowed against or withdrawn.
Catastrophe
Term used for statistical recording purposes to refer to a single incident or a series of closely related incidents causing severe insured property losses.
Catastrophe Deductible
A percentage or dollar amount that a homeowner must pay before the insurance policy kicks in when a major natural disaster occurs.
Certifications
Professional verification required for specific activities like floodproofing design, building elevation surveys, and hydrological studies.
Channelization
See Alteration of a Watercourse.
Cistern
A water storage tank that is considered part of the building structure if it's attached to the building.
Citizens Property Insurance Corporation Emergency Assessment
Assessments levied to pay claims after a catastrophic event when Citizens funds are depleted.
Claims-Made Policy
Covers claims made during the policy period, regardless of when the alleged incident occurred.
Closed Basin Lake
A lake with no outlet except for evaporation, covering over one square mile. NFIP covers buildings subject to continuous flooding from such lakes.
Coastal Barrier
A natural landform protecting the coast from waves.
Coastal Barrier Improvement Act of 1990 (CBIA)
Expanded the Coastal Barrier Resources System.
Coastal Barrier Resources Act of 1982 (CBRA)
Designated certain coastal areas as undeveloped and imposed coverage restrictions under NFIP.
Coastal Barrier Resources System (CBRS)
Areas identified by legislation for coastal protection.
Coastal High Hazard Area (CHHA)
An area along the open ocean and tidal waters where annual flood levels have a 1% or greater chance of reaching at least three feet above the ground.
Coastal Zone Management Act (CZMA)
A federal law that encourages states to develop and implement coastal management programs to protect coastal resources, including floodplains.
Coinsurance
The percentage of a covered medical expense you're responsible for paying after you've met your deductible.
Coinsurance
A provision in some policies requiring the insured to maintain a certain percentage of property value in coverage to avoid penalties in the event of a claim.
Collateral
Property that is offered to secure a loan or other credit and that becomes subject to seizure on default.
Don't Be Afraid to Ask!
If you come across an insurance term you don't understand, don't hesitate to ask your insurance agent or company. They are there to help you navigate the complexities of insurance. Remember, knowledge is power when it comes to protecting your financial well-being.
Pro Tip: Always read your insurance policy carefully and ask questions to ensure you have the right coverage for your specific needs and circumstances.
