Author: Scott Daugherty

Understanding your insurance policy can sometimes feel like trying to decipher a foreign language. With terms like “deductible,” “premium,” and “liability” thrown around, it’s easy to feel overwhelmed. But knowing these key terms is crucial for making informed decisions about your coverage and ensuring you’re adequately protected.

Whether you’re reviewing your homeowners policy, your commercial coverage, or your auto insurance, these terms will help you feel more informed the next time you speak with your insurance agent.

At The Camille Bunicci Agency, we believe in empowering our clients with knowledge. That’s why we’ve put together this straightforward guide to common insurance terms. Consider this your cheat sheet to navigating the world of insurance with confidence!

A–Z Glossary of Common Insurance Terms

Actual Cash Value
The current value of your property after accounting for depreciation. This is typically less than the cost to replace the item new.

Certificate of Insurance (COI)
A document that provides proof of your insurance coverage, often requested by clients, landlords, or contractors.

Claim
A formal request you make to your insurance company for payment after a covered loss.

Collision Coverage
Pays for damage to your vehicle when it hits another vehicle or object, regardless of who was at fault.

Comprehensive Coverage
Covers damage to your vehicle caused by something other than a collision, such as theft, fire, vandalism, or weather events.

Deductible
The amount you must pay out of pocket before your insurance begins to pay for a covered loss.

Endorsement (or Rider)
An addition or amendment to your policy that modifies coverage. It may add, remove, or change specific protections.

Exclusion
A condition or situation that is not covered by your insurance policy. Understanding exclusions helps identify where additional coverage might be needed.

Liability Coverage
Protects you if you are found responsible for causing injury or property damage to someone else.

Peril
A specific cause of loss, such as fire, windstorm, theft, or flood.

Policy Limit
The maximum amount your insurance company will pay for a covered loss.

Premium
The price you pay for your insurance policy, typically monthly, quarterly, or annually.

Replacement Cost
The amount it would take to replace your property with a new item of similar kind and quality, without deducting for depreciation.

Subrogation
When your insurance company seeks reimbursement from another party that caused the loss after paying your claim.

Umbrella Policy
Provides additional liability protection that goes beyond the limits of your existing home, auto, or business policies.

Underwriting
The process insurers use to evaluate your risk and determine your eligibility and premium.

Demystifying Your Insurance Coverage

While this glossary covers many of the basics, remember that every insurance policy is unique. Understanding these terms is a fantastic starting point to feeling more confident about your insurance choices.

Don’t let insurance jargon leave you guessing. If you have questions about your current policy or need help understanding specific terms related to your coverage, the team at The Camille Bunicci Agency is here to help. Contact us today for personalized guidance and clear answers.

Life is a journey of constant change. We get new jobs, expand our families, make significant purchases, and renovate our homes. While these milestones are exciting, they can also create a disconnect between your current lifestyle and your insurance coverage, potentially leaving you vulnerable to financial risk. That’s why an annual insurance review is not just a good idea—it’s an essential part of responsible financial planning.

A comprehensive review ensures your policies are up-to-date and tailored to your evolving needs. By taking the time to assess your coverage each year, you can gain peace of mind knowing you are adequately protected and not paying for coverage you no longer need.

What to Check During Your Annual Insurance Review

An annual insurance review is an opportunity to look at all of your policies—home, auto, life, and business—to confirm they still align with your current situation. Here are some key areas to focus on:

1. Personal & Family Changes

Significant life events can dramatically alter your insurance needs. Consider the following:

• Marital Status: A change in marital status, whether marriage or divorce, requires an update to your policies and beneficiaries.
• Growing Family: The birth or adoption of a child, or an adult child moving back home, can increase your liability and property coverage needs.
• Empty Nest: With a child off to college, you may be able to adjust your auto insurance to reflect a less frequent driver.
• Major Life Events: The death of an immediate family member or a change in your own health can prompt a reassessment of life insurance needs.

2. Home & Property Updates

Your home and personal belongings are often your most significant assets. Make sure your coverage reflects their current value.

• Home Improvements: Major renovations like a kitchen remodel, a new bathroom, or adding a deck or pool can increase your home’s replacement cost and liability risks.
• Major Purchases: Have you acquired high-value items such as new jewelry, electronics, art, or family heirlooms? Standard policies have limits on these items, and they may require a special rider or endorsement to be fully covered.
• Home Inventory: This is a great time to review your home inventory. A detailed, up-to-date list of your possessions helps ensure you have enough personal property coverage and can simplify the claims process.

3. Policy and Financial Check-up

A review isn’t just about what’s changed in your life; it’s also about optimizing your policies.

• Review Deductibles and Limits: Check if your deductibles are still manageable for your budget. While a higher deductible can lower your premiums, you need to be prepared to pay that amount out-of-pocket in the event of a claim. Also, ensure your liability limits are high enough to protect your assets.
• Check for Gaps in Coverage: Many standard policies do not cover certain disasters like floods or earthquakes. A review can help you identify these gaps and discuss options for additional coverage, such as an umbrella policy for extra liability protection.
• Look for Discounts: Have you installed a new security system, a smoke alarm, or a new roof? These updates may make you eligible for a discount. An annual review is also the perfect time to explore bundling multiple policies with the same provider for potential savings.

Common Mistakes to Avoid

• Assuming old policies still fit: The world changes, and so should your coverage.
• Overlooking small assets: Jewelry, collectibles, electronics are often excluded or limited in standard policies.
• Ignoring inflation: Rebuilding or replacement costs may increase significantly over time.
• Delaying review because no claim occurred: No news isn’t always good news. Risks may have shifted quietly.

Don’t leave your protection to chance. If it’s been over a year since your last insurance review, or even if life has changed in small or big ways, contact The Camille Bunicci Agency for a comprehensive assessment of your coverage. Let’s ensure you’re properly protected, without paying for anything you don’t need.