Definitions for Common Insurance Terms

Sometimes, getting the right insurance coverage can seem to be a daunting task. After all, insurance professionals often use industry terminology that can sound like they’re speaking another language. Here, we’re offering a few common insurance terms, along with their definitions, hoping to clear confusion and put you at ease.

  • Actual Cash ValueThe term ‘actual cash value‘ is often associated with homeowners or renters policies. This property insurance policy term indicates the carrier will repay, in the event of loss, the amount it would cost to replace the item, less any depreciation.
  • BinderIssued at the onset of a new policy, binders are actually temporary authorization of coverage that kicks in prior to the actual policy going into effect.
  • Captive Agent: Captive agents represent one insurance carrier and cannot, therefore, submit business to another company (except when the captive company rejects the policy).
  • Comprehensive CoverageComprehensive coverage relates to a portion of an auto insurance policy which covers damages not suffered as the result of a collision. (For example, fire, theft and flooding, etc.)

The Pierce Insurance Group is a full-service, independent agency serving residents of McKinney, Texas and surrounding areas. To learn more or to get a quote, contact The Pierce Insurance Group, where "relationships matter most."