Insurance Policy 101: 5 Common Terms You Need to Know to Avoid Surprises
Your insurance policy is a contract, and when you pay your premiums, it imposes certain obligations on the insurance company. If they do not do what they have promised when you file a claim, a California insurance bad faith attorney at Quincey Law can help you take legal action.
Although there are many types of insurance coverages, they almost all operate using similar terms and principles. You must be familiar with the exact terms of your policy, so you can have an understanding of how the claims process works and what may be covered. An insurance policy is a contract, and you have the right to sue when your rights are violated.
Call Quincey Law today if you need to file a large claim, or if you have already submitted one and you are getting the runaround. We offer free case evaluations to prospective clients, so you can learn more about what you can do when you are having difficulty with the insurance company.
Although an insurance policy is often a complex and dense document, every term has a specific and binding meaning. It helps to know what your policy says before you need to file a claim, so you can understand both your own rights and the necessary procedures that you must follow. Here are five key terms that come into play in nearly every type of insurance policy.
Coverage
Coverage is the key to your entire policy. You are paying premiums to have certain types of damages covered. If your policy states that something is a part of your coverage, you can expect to be paid when you have suffered losses from it. The exact language of your coverage matters down to every word and comma. You would need to show that a loss is covered if there is any dispute with the insurance company.
Claim
A claim is how you would begin the process of getting the money that you would be owed by the insurance company under the terms of your policy. You need to formally file a claim with the insurance company that states your loss and the amount of money that you should be paid. Your claim would be supported by documentation that shows the nature of your loss. Your policy will have requirements and procedures for your claim, and it is crucial that you follow them to the letter. Otherwise, your claim may be denied.
Exclusions
There are some things that your policy simply will not cover. Exclusions are occurrences that are specifically written out of your policy to leave no ambiguity about whether the insurance company will pay for them. For example, homeowners insurance policies specifically exclude damages from floods (you would need to purchase a separate policy to cover flood damages). Oftentimes, you may end up in a dispute with the insurance company about whether something is covered under your policy, or the damage was caused by something that falls under an exclusion.
Deductible
Each type of insurance policy generally requires you to pay a certain amount out of your own pocket before the insurance company has any obligation to cover your losses. Your policy coverage will kick in once the deductible is met. The check that you receive from the insurance company should cover your full amount of losses, minus the deductible. The lower the deductible, the more amount of money that you can expect to pay in premiums.
Mitigation
You have an affirmative obligation to take steps to minimize the extent of your losses once you have suffered them. For example, if your home was damaged in a fire or storm, you must do what you can to board it up to keep the situation from getting worse. If you have failed to mitigate your own damages, the insurance company may refuse to pay for any further losses that were caused by your inaction.
Besides studying your policy in detail, you must also be aware of what the insurance company cannot do when you file a claim. Under California law, there is a long list of prohibited practices that could allow you to take legal action directly against the insurance company. If you are experiencing difficulties with your claim, it is essential that you contact an insurance bad faith lawyer to learn more about both forcing the insurance company to pay for your claim and potentially filing a lawsuit against them.
Contact a California Insurance Bad Faith Law Firm Today
The best thing that you can do if you are having difficulty with an insurance company is to hire a California insurance bad faith lawyer today. Call an insurance bad faith attorney with Quincey Law today at 866-945-9175 to schedule a free initial consultation to discuss your case.
Nicholas Quincey is the founder of Quincey Law, and has over a decade of experience of handling insurance claims denials and personal injury matters for people throughout California. We have pursued insurance bad faith claims for people involving life insurance, health insurance, homeowners and disability insurance. We also work with clients and families who need assistance filing and pursuing a personal injury matter. Learn more here.