As with many other industries, the insurance industry uses industry-specific terminology that is often difficult to understand. To help you better understand some of the terms used while you are shopping for South Carolina insurance, Farm Bureau Insurance has provided you a glossary of common terms that are used throughout the industry as well as on this website.
An agent is an individual who sells and services insurance policies. An agent can work:
- For only one insurance company (direct or career agent).
- For any insurance company and sells the policies of more than one insurer.
Actual Cash Value:
Actual cash value of property is calculated based on what it would cost to replace the property today with materials of like kind and quality and then subtracting an amount that reflects depreciation (a loss in value as an item ages) and economic obsolescence.
A broker is an insurance sales person who works with agents and insurance companies to find insurance for a customer. (A broker works in the interest of the client, not the insurance company.)
Casualty insurance is insurance related to the losses caused by injuries to persons or for damage to property of others for which the insured is legally liable.
A claim is a person's request for payment by an insurer for a loss covered under a policy. As a Farm Bureau Insurance customer, your claims to our company
are "first-party claims." Claims made by one person against another person's insurance company are known as "third-party claims."
Collision coverage is optional vehicle insurance
that covers damage to your car caused by collision with another car or object, or by your car rolling over. If you have a car loan, collision coverage may be required by the lienholder.
Comprehensive Physical Damage Coverage:
Comprehensive physical damage coverage is optional automobile insurance
that pays for damage to your car caused by something other than a collision or a vehicle rollover, including fire, theft, vandalism, flood, or hail. This coverage is frequently required if you have a car loan.
Conditions are part of your insurance policy that lists your obligations and those of your insurance company in order for the policy to be in effect.
The deductible is the amount of money that you agree to pay per claim or per accident. This amount is subtracted from the total amount paid by your insurer. For example: if you file a claim for $500 and your deductible is $100, you pay $100 and your insurance company will pay $400. The higher the deductible, the lower your payment will be for the policy, but the more you will have to pay out of your pocket if you file a claim.
The Insurance Department is a state agency that enforces rules for the insurance business in each state. This department is a valuable source of information about all types of insurance as well as handling consumer inquiries and complaints.
An insurance company (or insurer) is a company that agrees to pay all legitimate claims that may arise under your policy in exchange for a fee (known as a premium).
Liability is a legally enforceable financial obligation.
Liability coverage is insurance that pays other people's losses that you have caused unintentionally or through negligence. Types of liability insurance include:
- Bodily injury liability coverage – pays the medical costs of others and your legal defense costs if your car injures or kills someone;
- Property damage liability coverage – pays the claims against you if you damage someone else's car or property.
Negligence is a failure by you or another to exercise a generally acceptable level of care and caution.
Your policy period is the length of time your insurance contract (or policy) lasts.
A policyholder is the person who purchased the insurance policy.
The premium is the amount you pay for your insurance coverage. Your premium is typically paid once per coverage period or with a down payment and scheduled installment payments.
Proof of Loss:
Proof of loss is documentation that you give to the insurer to support your request for payment of losses. Farm Bureau Insurance and other insurance companies use these documents to determine whether and how much to pay. (Examples: written repair estimates from auto body shops and police reports.)
Uninsured Motorist Coverage:
Uninsured motorist coverage
is insurance that you purchase, which pays for your costs resulting from an accident involving a hit-and-run driver or a driver who does not have insurance.