Get to know your insurance policy by understanding the terms!
Fumbled by jargon? Stumped by specifics? Perplexed by policies? You’re not alone! Trying to understand an insurance plan is like reading a technical manual in a foreign language – that’s why insurance agents must be well-trained and knowledgeable!
So that you can properly understand potential policies and find the best coverage for you, here’s a breakdown of what insurance terms mean.
Open enrollment: This is the period you’re allowed to sign up for next year’s insurance. Most insurance companies allow you to choose your coverage for the next year during a specific amount of time that is “open enrollment” unless you’ve changed jobs or had a qualifying life event!
Premium: This is your monthly bill! Therefore, your monthly premium is what you pay for your insurance policy.
Deductible: The total amount that you have to pay out-of-pocket before insurance kicks in. If you have ...
Replacement Cost vs. Actual Cash Value
Investing in the right amount of insurance protection will help to ensure that you will be reimbursed if any of your personal property is damaged or destroyed. From your homeowners insurance to your auto insurance, knowing how to properly protect your assets can help to ensure that you do not have to pay for damages out of your own pocket.
When looking for the right insurance policy, you will have the option to choose between actual cash value or replacement cost. The actual cash value of an item, also known as ACV, is determined by looking at the original value of an item, minus the amount that it has depreciated since you bought it. On the other side, replacement cost is the amount of money that it would take to replace destroyed, damaged, or stolen property with a brand new item.
While actual cash value and ...