Insurance 101

3 minute read Published on Jun 10, 2014 | Last updated Sep 9, 2021 by BrokerLink Communications

Policy Basics

Between graduations, vacations and buying new cars or homes, it can be an exciting time. While making your plans, make sure to include a call to your BrokerLink broker. Your insurance policy may seem confusing, but we’ve defined some common terms.

Broker

An insurance broker works independently from insurance companies, allowing them to shop the marketplace and find the best possible rates for customers. Brokers are trained to act as an advocate for customers, whether placing a new policy or offering guidance during a claim.

Insurer

The insurer or insurance company is responsible for the actual insurance coverage being offered. They determine insurance premiums and deductibles, policy coverages and exclusions, as well as the claims process.

Claims Adjuster

Claims adjusters represent the insurance company and are responsible for handling insurance claims. They will confirm the details of your loss and review your coverage, conduct an in-person visit and provide paperwork to be completed. They will also facilitate any repairs to be done. Here is a guide to the claims process.

Premium

This is the rate an individual will pay for insurance protection. A number of factors determine policy premiums including lifestyle, location, claims history, driving habits, employment and the characteristics of your home. Learn more about the factors impacting your premiums or how to save on your home insurance.

Deductible

Is the amount the policyholder is required to pay out of his/her own pocket before a claim is paid. In some cases, you can increase your deductible to save money on your premiums. Different policies and coverages have different deductibles, so always check with your BrokerLink broker if you are unsure.

Policy Specifics

Home, condo or tenant

Sublimit: Your homeowners or condo insurance policy will have limits to how much reimbursement you will receive from the insurance company if you have a claim. There are different limits depending on the type of claim. For instance, the maximum payout you would receive for sewer backup damage will differ from the amount received for a damaged roof due to a hail storm. Your specific sublimits will be detailed in your policy documents. To confirm how much coverage is available, contact your local BrokerLink broker.

Actual Cash Value: This is the cost of replacing damaged or destroyed property, factoring in depreciation and obsolescence. For example, a ten year old couch wouldn’t be replaced at current full value due to the decade of depreciation. Other items, such as antiques or artwork, may actually appreciate in value over time. To receive full coverage for these items, they must be listed specifically in a policy.

Replacement Cost: Refers to the cost to replace damaged or destroyed property with an item of similar quality without considering depreciation. Using the example of the ten year old couch, a customer with replacement cost protection would be reimbursed the cost of purchasing a brand new couch.

Additional Living Expenses: This covers the cost of having to live away from your home if it becomes unliveable due to a loss. It may include compensation for a hotel room or short-term rental, as well as meals and other costs associated with living away from home. Depending on your policy, there may be limits on how much compensation is received. If you aren’t sure how much coverage is in place, get in touch with your BrokerLink broker.

Auto

Accident Benefits & Liability Coverage: Mandatory for all vehicle owners, accident and liability insurance provides coverage for any incident involving your vehicle while it is being driven. This includes coverage for medical treatment, income replacement and other benefits to help if you are injured in an accident, as well as if someone takes legal action against you as a result of an accident.

Comprehensive Coverage: Comprehensive auto insurance coverage provides additional protection for your vehicle against damage including break-ins, flood and water damage, fire, and falling objects. Although it is not required by law, comprehensive coverage may be a good idea depending on what kind of vehicle you drive. If you are driving a leased or financed car, you may be required to purchase this coverage to protect the car owner or lender’s investment.

Collision Coverage: This optional coverage pays for damage to your vehicle caused by a collision with another vehicle, an object (such as a tree, guard rail or debris) or by an upset (roll overs).

If you’re reviewing your policy and have questions, don’t hesitate to contact your local BrokerLink broker. We’re happy to help guide you through the insurance process and will work to make sure you have the coverage you need to protect the things you love.