In order to make sense of insurance, you need to know some basic terms. Sadly, no one discusses these terms with anyone. Ever. Seriously, I did not know what these meant until I went to work for the insurance industry. These terms are important in homeowners insurance, car insurance, business insurance, dealing with an insurance claim, or any other insurance related matter. I know lawyers who don’t know what this stuff means. So, here are 5 insurance terms YOU MUST KNOW:
1. THIRD PARTY CLAIMANT
A third party claimant is someone who presents a claim against another person’s insurance policy. For example, if you are injured in a car crash and make a claim, the other person’s insurance company calls you a third party claimant.
2. TOTAL LOSS
When the repair cost of the vehicle is more than 75% of the value of the vehicle, a car is declared a total loss. The insurance company will not pay to repair this vehicle.
3. ATTORNEY-REPRESENTED
A third party claimant who has retained an attorney. Third party claimants who are attorney-represented usually have their claims handled by more experienced adjusters.
4. COLOSSUS
A computer program that insurance companies use to determine the value of a bodily injury claim. Insurance companies claim this allows them to make sure that every claim is evaluated in the same way.
5. FIRST PARTY COVERAGE
The coverage provided by your insurance company to protect your home or car from damage. Collision and comprehensive coverage are examples of first party coverages.