3 Important Insurance Terms You Should Know

It’s crucial for a policyholder to know and understand what is and isn’t covered by his or her insurance policy, as well as to have a decent idea of how the claims process works. Armed with this knowledge, a policyholder can better detect when his or her insurance provider may be trying to take advantage of him or her by wrongly rejecting a claim, failing to provide coverage when due, or stalling coverage payments. The following key terms can be important for helping policyholders understand their rights and coverage.

Terms to Know

The following three concepts are important parts of insurance policy and claims process vocabulary, making it imperative for people with insurance to know and understand these terms:

1. Exclusions

Exclusions are pieces of property that explicitly are not covered by a policy. These items won’t be covered, no matter the type or cause of damage. The opposite of an exclusion is known as a covered peril, which should be covered by a policy.

2. Depreciation

As time goes on, most pieces of property lose some of their original value. This loss of value is known as depreciation, and it can affect how much coverage a person will receive for a particular item. Depreciation is subtracted from the original value of the asset or piece of property, and the remaining amount is how much that item is worth in terms of receiving coverage.

3. Proof of Loss

Proof of loss is simply the paperwork filed by the policyholder to the insurance company that describes whatever property was lost. If a policyholder files his or her proof of loss, it’s the insurance company’s responsibility to respond in good faith. Failing to act after this documentation is filed may be considered bad faith and grounds for legal action against that policy provider.

Contact Us

If your property has been damaged by a hurricane, and your insurance company hasn’t provided you with the help it should have according to your policy, we may be able to help. For more information about your legal options when filing a bad faith insurance claim against your insurer, contact a lawyer from Williams Hart today at (713) 352-0031.

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