Insurance Agents Key Terms

Understand insurance agents key terms to best know how to protect your business

Insurance agents key terms not only define important aspects of the insurance industry, they can help you understand how to choose the best company and policy for your needs. With the proper coverage, you can make sure that you have the right amount of insurance to cover your needs in case of an accident or disaster. With key terms, you can understand the difference between an insurance agent and a broker. You can also identify which assets need coverage and which ones don't.

 

Insurance agent

An insurance agent is the first point of contact for individuals in need of insurance. The agent works for an insurance company, such as State Farm or Farmers. His or her job is to help prospective clients understand the services and coverage offered by the insurance company.
Try: InsureLane defines what an insurance agent does, explains the benefits of working with one and helps you understand the financial side of paying an agent.

Insurance broker

Many people interchange the term agent with broker; however, there is a key difference between the two. While an agent works for a specific insurance company, a broker does not. An insurance broker represents the client and works with more than one insurance company or agency in order to provide the best possible coverage for clients.
Try: Learn more about the services offered by an insurance broker at the website for Heffernan Insurance Brokerage.

Policy

An insurance policy is the official document that spells out what the insurance company will cover in the effect of damage and at the amount of money the company will pay toward the coverage. It also includes information on the types of damage not covered by the policy. For example, some policies won't cover loss from natural disasters or things like mold.
Try: The Insurance Information Institute covers the main aspects of a home owner's policy and breaks it down into layman's terms.

Assets

Most insurance policies protect your assets, which you can define as anything that you own that you can convert to cash. Examples of assets include cash, checking and savings accounts, real estate and vehicles. Assets can be fixed, current or intangible.
Try: Accounting Unleashed provides an overview of assets and includes information on fixed, current and intangible assets.

Business owners policy (BOP)

A business owners policy, also called a BOP, is an insurance policy that covers the property and liabilities of a business. The coverage of a BOP varies depending on the insurance company providing the coverage.
Try: Nationwide Mutual Insurance Company provides an in-depth look at BOPs.

Umbrella plan, umbrella insurance, umbrella liability insurance

An umbrella plan is a term used by an insurance agent to explain additional coverage. These plans provide additional coverage to the insured individual and may extend coverage to areas not in the original policy.
Try: Business Insurance Now defines umbrella liability insurance, provides an example of what it covers and offers a description to show how an insurance company might include it on a policy.

Copyright © 2011 Business.com, Inc. All Rights Reserved.

---