When it comes to insurance, the jargon can be a bit complex. Not knowing what some of the terms mean may result in inadequate plans or even worse, more expensive coverage. MP Davis Insurance Agency in Randleman, NC, strongly believes an educated client has the knowledge to make informed decisions. Their team of professional insurance agents shares several important terms that everyone should know.

4 Helpful Insurance Terms To Know

1. Deductible

This is the amount a policyholder pays out of pocket before their insurance provider picks up the rest of the tab. Depending on the policy, the amount can range from $200 to more than $1,000. To illustrate, if you have a $500 deductible and your vehicle is in an accident that results in a $1,000 repair bill, you pay the $500 deductible, and your insurance provider pays the remaining $500.

2. Premium

The premium is the amount a policyholder pays each month or year for insurance coverage. Like the deductible, premiums can vary based on the type of policy. The amount typically depends on how much coverage is provided. The good news is insurance agents share information on discounts, which can help lower premium payments.

3. Warranty

In the insurance world, a warranty is an essential feature. It refers to a contract agreement between the policyholder and the insurance provider. The policyholder agrees to keep their homes, vehicles and other personal property in compliance with the provider’s stated requirements. For instance, a homeowners insurance plan may require smoke detectors in the house. If a fire occurs and there are no detectors installed, the insurance carrier may not pay for any damages.

4. Exclusions

Exclusions refer to all the scenarios not covered under an insurance policy. An experienced insurance agent will gladly discuss which situations are excluded under homeowners or auto insurance plans. It’s critical to know what your policy entails so that there won’t be any surprises if a claim needs to be filed.

You work hard to keep your loved ones, home, vehicle and personal possessions safe. Knowing key insurance terms can help ensure you have the proper coverage. Let the friendly and professional team at MP Davis Insurance Agency be your trusted source for affordable policies explained in clear language. For more than 40 years, their insurance agents have served individuals and businesses throughout the Piedmont Triad area. Call (336) 498-7606 today for free, no-obligation insurance quotes. Visit the website for extensive information on policy options.