eeeIt can be difficult to keep up with all the insurance terms that are thrown around these days. If you don’t know your consequential loss from your deductibles, things can get a bit confusing. And if you don’t, that’s ok, because YIQ is here to help as we continue in our quest to explain insurance jargon. This time we will be focusing on terms that begin with the letter ‘E’.
Earned premium is the total premium earned by an insurance company over a period of time. It is calculated by the ratio of time passed on a policy to the length of the policy. So if a $10,000 policy has ten year life span and no claim has been made after one year then the earned premium will be $1,000.
The elimination period is the time between a claim being made and when the policyholder can collect insurance benefits. For example, if your elimination period was 30 days, you would need to be sick for 30 consecutive days before you would receive insurance benefits. During this waiting period, policyholders must pay for services, which are then deductible at the end of the elimination period. The shorter the elimination period is, the more expensive the policy will be.
Employers Liability Insurance
Employers liability insurance covers an employer if any of their employees is injured because of the employer’s negligence. If an employee is injured at work in an accident and the fault lies with the employer, they may pursue a claim. If this happens the insurer will pay for the cost of the claim.
Extended Replacement Cost
The aim of extended replacement cost is to cover a homeowner in the event of a natural disaster or extreme damage to their property. This is due to the fact that the cost of repairing and refurnishing a home can end up costing more due to the demand for contractors in the aftermath of a major disaster. The insurance company will pay a certain amount above the policy limit to cover this cost.
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