Saving You Money For Life

Here are a few more insurance contract terms to add to your personal dictionary:

Coinsurance – This describes when two (or more) insurance companies share equal proportions of an insurance policy. For investments that are high risk to insure, like an amusement park, an insurance company can involve multiple insurers.

Coinsurance can also happen between you and your insurance company especially in medical insurance where you and your insurance carry split the cost of your coverage. A common ratio is 20:80, in which you pay 20 percent of the claim and the provider pays 80 percent.

Deductible – This is how much you pay for a claim. Your insurance provider pays the rest. If your deductible is $1000 and the claim comes to $6000, then you will pay your $1000 and the insurance company will pay the remaining $5000.

Endorsements – These appear most often insurance contracts is going to be changed or when additional conditions are added.

Principle of Waiver and Estoppel – A waiver signifies you giving voluntarily giving up a right. That is, you “waive” your right to a particular aspect of the contract. Once a right is waived, estoppel prevents the insured or the insurer (whoever gave up the right) from claiming that right since it has already been waived.

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