What Does That Mean? Answering Insurance Questions Starting With D

What Does That Mean? Answering Insurance Questions Starting With D image question mark face 300x198question mark faceAsking insurance questions can be difficult. Especially when those questions relate to jargon, because it’s hard to shake the feeling that you should know what it means.

Thankfully, YIQ is here to help. Continuing our list of insurance jargon, here are a few insurance terms that all insurance buyers should understand beginning with ‘D’.

Deductible

No matter what issues arise surrounding a loss, insurance questions always come back to one key issue, ‘how much do I get?’ The deductible on your policy will have a huge bearing on the answer to that question. A deductible is the portion of the loss that is covered by you. Every policy will have a deductible and it’s useful for reducing your premium. The higher deductible you are willing to pay, the less your premium will cost you.

Direct Writers

Direct writers are insurance companies who sell direct to consumers rather than working through an agent. They pose advantages and disadvantages for insurance buyer; the strongest advantage is that you’re dealing direct rather than using a third party. The disadvantages all revolve around the same issue, how do you ask a direct writer insurance questions and know you’ve gotten an unbiased answer? They can only comment on their own products, while an agent can discuss your options in more depth.

Disability

Disability is an obvious term, but it can have very different meanings on different policies. If you have a disability income policy it’s important that you fully understand the policy definition of ‘disability’. Each policy is different, so you need to ensure you understand what you are covered for when you buy a policy.

Duty to Defend/Pay

When you buy a liability policy it’s easy to assume that you are covered for a lawsuit, plain and simple. As with so many insurance questions, it’s not that easy. Your policy may contain one of these two terms, they may seem innocuous but they make a huge difference. Duty to defend means the insurance company is required to provide you with a defense if you can establish that there is potential for coverage within the policy. Duty to pay is different; it only requires the insurer to pay the costs you incurred in defending yourself. That’s a big difference.

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