Understanding Basic Insurance Terminology

Does the Insurance industry seem like a foreign world to you?

While reading through your terms and conditions in a contract, do you get lost in the words they use? Insurance can feel complicated at the best of times.

Understanding common insurance-related language can go a long way to helping you make informed choices. Here are some terms that can be head-scratchers.

Comprehensive Coverage

Coverage for damage to your vehicle not caused by collision (subject to deductible). Examples may include theft, vandalism, hail, and contact with animals.


The Deductible is the amount you must pay out of your pocket before the insurance company begins paying towards any covered expenses. 

Loss of Use

Loss of Use, or Additional Living Expense, offers insurance protection against additional costs you may incur for reasonable housing and living expenses if a covered event makes your home temporarily uninhabitable while being repaired or rebuilt.


A peril is a specific cause of bodily injury or property damage.


The person or entity specifically identified as the named insured in an insurance policy. This person is also referred to as the named insured.


Insurance Premium is the amount of money an individual or business pays for an insurance policy.

Primary use (Auto)

This is the vehicle’s typical use. “Work” refers to a vehicle primarily used for commuting to and from work or school. “Pleasure” refers to a vehicle used mainly for personal errands, vacations, etc.  “Business” refers to a vehicle used primarily for a business.

Property Damage Liability Coverage (Auto)

Coverage for damage to someone else’s property as the result of a covered accident for which you are responsible. It may help cover the expense of others for repairing or replacing a car, fence, or property damaged during the covered incident.


In insurance, subrogation allows your insurance carrier to recoup costs, including your deductible, from the at-fault insurance company.

If you are injured and it’s another person’s fault, your insurance company may pay your claim and then attempt to collect the damages from the other person or their insurance carrier.


The length of time covered by a policy.


Underwriters decide if applications for insurance coverage should be accepted and, if so, what the terms and conditions (such as premium to be paid) of that acceptance are. To do this, they assess the risk of insuring a person or company according to the likelihood of a claim being made.

Understanding what these standard insurance terms mean should help you to make a more informed decision. While this blog and Google may clarify some terms that you weren’t sure of, there is nothing better than dealing with an actual Insurance agency, particularly a neighborhood insurance agency. The main reasons for this include:

  • National insurance companies’ call center agents can’t focus on your local area when they have about a million other ones to look out for.
  • Being in the community for over 65 years, Barton Insurance Agency is familiar with your neighborhood. They know that your storefront by the river may need higher flood coverage or that your dental office needs a certain level of Malpractice Insurance.
  • We are actively involved in your community. Community organizations and events that we contribute to include David’s House, Lake Sunapee Turkey Trot each year, and a referral program that benefits our local food pantry. Who says you can’t manage risk while giving back?

If there is any part of your policy that you do not understand, or have doubts about its function, take time to ask us here at Barton Insurance Agency. Not only are we happy to give free advice to our policyholders, but we are also happy to offer much-needed advice to anyone that may potentially be a future customer.

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