At Bankers Insurance Group, we know insurance can be confusing. Even the basic terms often don’t sound anything like what they actually mean. In Decoding the Jargon, we’ll go over these confusing terms and explain what they really mean and how they impact you. Today, we’re talking about risk management and reinsurance.

Risk Management
We talk a lot about those troublesome Risks, and “risk management” is a term that basically means trying to limit your exposure to them. Techniques like installing sprinklers or alarm systems can help control the frequency and severity of losses and keep you better protected.

Reinsurance
So if the insurance company is protecting you, who is covering the insurance company? That’s where reinsurance comes in. In technical terms, reinsurance is an agreement under which an insurer, or ceding company, transfers some or all of the risks to another insurer—the reinsurer. In much more understandable language: Reinsurance provides insurance for insurance companies to help protect against catastrophic losses, like hurricanes or earthquakes.

For more explanations of insurance speak, don’t miss our terminology guide.

Have your own story or questions about insurance jargon? Get in touch with us in the comments or connect with us on Twitter or Facebook.

At Bankers Insurance Group, we know insurance can be confusing. Even the basic terms often don’t sound anything like what they actually mean. In Decoding the Jargon, we’ll go over these confusing terms and explain what they really mean and how they impact you. Today, we’re talking about binder and indemnity.

Binder
Most of us remember binders as school supply staples from grade school, covered in doodles and scratched out notes. In insurance, a binder is a bit different. It’s a temporary agreement to provide specified insurance coverage until a policy is issued or until the application is declined. Either an agent or an insurance company itself can issue a binder.

Indemnity
Here’s a rare insurance term that actually means the same thing it means in non-insurance situations. Indemnity is simply reimbursement for a loss.

For more explanations of insurance speak, don’t miss our terminology guide.

Have your own story or questions about insurance jargon? Get in touch with us in the comments or connect with us on Twitter or Facebook.

At Bankers Insurance Group, we know insurance can be confusing. Even the basic terms often don’t sound anything like what they actually mean. In Decoding the Jargon, we’ll go over these confusing terms and explain what they really mean and how they impact you. Today, we’re talking about endorsement and exposure.

Endorsement
Most people know the word “endorsement” as a lucrative contract given to promote a brand from a celebrity or professional athlete. Usually if someone is endorsing something, they are promoting it in some way. In the insurance industry, an endorsement is actually a document that amends the original insurance policy in some way. So to recap: An endorsement is basically like an amendment to your insurance policy.

Exposure
Exposure can refer to an appearance in public or in the media, a variable to tweak photographs, or simply the act of exposing something or someone. In insurance, however, it’s easiest to understand as being “exposed to the elements”—exposure is any condition, risk or situation that presents the possibility of a loss.

For more explanations of insurance speak, don’t miss our terminology guide.

Have your own story or questions about insurance jargon? Get in touch with us in the comments or connect with us on Twitter or Facebook.

At Bankers Insurance Group, we know insurance can be confusing. Even the basic terms often don’t sound anything like what they actually mean. In Decoding the Jargon, we’ll go over these confusing terms and explain what they really mean and how they impact you. Today, we’re talking about underwriter and floater.

Underwriter
This term sounds very literal—a writer who writes under something—and actually derives from exactly that. In the times of long sea voyages, financial backers would accept some of the risk on the venture, and in exchange for a premium, would literally write their names under the risk information (such as a shipwreck). In insurance, the term is similar, referring to the insurance employee who evaluates risks against the predetermined criteria for acceptability to determine insurability.

Floater
This is another term that quickly brings an image to mind—a raft, a buoy, or a rubber ducky, perhaps. In the insurance industry, a floater is a specific type of policy that covers property or items that are movable from location to location. Items like jewelry, furs, tools and electronic equipment all qualify as floaters.

For more explanations of insurance speak, don’t miss our terminology guide.

Have your own story or questions about insurance jargon? Get in touch with us in the comments or connect with us on Twitter or Facebook.

At Bankers Insurance Group, we know insurance can be confusing. Even the basic terms often don’t sound anything like what they actually mean. In Decoding the Jargon, we’ll go over these confusing terms and explain what they really mean and how they impact you. Today, we’re talking about deductible and premium.

Deductible
Though it may bring to mind taxes, where a high deductible is actually a good thing, a high deductible in insurance is less appealing. The deductible is actually the amount for which you are liable on any loss or damage before an insurance company will make payment. So, if you have damage to your home that is covered under your homeowners insurance policy, you will be responsible for the amount of your deductible before your homeowners insurance will kick in to cover the rest.

Premium
Premium is typically a word you want to be associated with. Premium menu items, premium beauty products, premium seating at a sporting event… all good things. In the insurance industry, a premium is what you pay your insurance company in exchange for an insurance policy. In a way it makes sense—making sure your home and family are protected is definitely a premium move.

For more explanations of insurance speak, don’t miss our terminology guide.

Have your own story or questions about insurance jargon? Get in touch with us in the comments or connect with us on Twitter or Facebook.

In a previous post, I spoke about the insurance policy as a contract, no different than any other contract: it transfers duties and conditions from one party to another. As adults, we commonly enter into contracts of one kind or another, insurance being just one of many.
Now, let’s explore the duties and conditions and the intricacies of the policy in greater detail, staring with the “intent” of an insurance policy. In simple English, the intent of the insurance contact is that we will provide insurance – pay for covered losses – in return for the premium and compliance with applicable provisions of the policy.

Enough of the legal talk, let’s dissect the policy.

The typical homeowner’s policy has two sections. Section I provides the property coverage and Section II provides liability coverage. Each section is unique in its coverage and holds separate “duties and conditions.”

A big misconception about property coverage is that the policy covers any and all damage to the structure. Too often, we claims personnel hear the expression “then why do I have insurance?”

Simply put, Section I of the policy is designed to cover fortuitous events that are “sudden and accidental” in nature. The homeowner’s policy was never designed to be a “maintenance” policy – it typically contains exclusions of coverage for damages caused by normal wear and tear and lack of maintenance. I know, I know, it sounds like more jargon and terms to struggle with, “fortuitous this” and “sudden and accidental that.” Let’s break it down:

A water heater bursting without warning is “sudden and accidental.” Roof shingles that are 15 years old and deteriorated by the extreme Florida weather and need replacing are not “sudden and accidental.” A vehicle slamming into the dwelling is “sudden and accidental” (At least I hope it is!). A decaying subfloor caused by moisture and condensation is not “sudden and accidental.”

A possibly misleading part of the policy in Section I under Perils Insured Against: “We insure against risk of direct physical loss to property described.” It’s easy to interpret that to mean that we insured against any type of physical loss to the described property. BUT reading the next paragraph, you’ll see that “We do not insure, however, for loss, excluded under Section I.” Yep, there are exclusions. I know we all hate exclusions, but they do serve a purpose. Exclusions are not loopholes. Ultimately, exclusions serve to keep the premiums low and affordable. Now don’t laugh – think what the premiums would be if the policy also provided upkeep to your property! That’s never been the intent. Think back to “fortuitous” and “sudden and accidental”. Those are the phrases that pay!

I’ll share more as we continue to dissect Section I next time around, and we’ll delve into other policy language that can be convoluted —there sure is enough of it! (Speaking of, “fortuitous” in insurance means “by chance or accidental;” in everyday usage its means “fortunate.” Tricky, huh?)

When we began working to update our website, introduce this blog and help bridge the gap between people who buy insurance and people who sell insurance, I knew it would be a great challenge. Introducing change into an industry that hasn’t changed much in the last fifty years is no small task.

Today, I am happy to report a lot of exciting things are happening as we learn to communicate better about our business and its practices and products.

Michael Maslansky, noted author and strategist, is coming to our annual Hurricane Season Forum in November. As our keynote speaker, Michael will share with insurance agents, carriers and support staff the thoughts the outlines in his powerful book The Language of Trust.

Maria Umbach, innovation leader, consultant and See Through Insurance guest blogger, is leading the charge to help our industry understand the communication styles of Gen Y, showing us how we must adapt to and change for the next generation of consumers if we are going to remain relevant. Her work focusing on Flirting with the Uninterested highlights the need to examine the language we use to match the experience of those we talk to.

I sense a lot of change in the air, and the hope that comes with it. Please join us in the conversation about insurance. We are here to listen to you.

I hail from the world of Management Consulting, which quite possibly will go down in corporate history as the single most confounding marketing ploy ever conceived for young, hungry college graduates. “What’s that, you say? You’re gonna let me fly four times a week, live out of a suitcase and off room service, develop closer relationships with car rental agents and hotel receptionists than I have with my family, work 160 hours a week, obtain a Masters in Microsoft Powerpoint and get to tell the world I’m ‘advising clients’? Where do I sign?  Oh, my soul too?  Sounds good.”

So yeah, I needed a change. I was fortunate enough to be made aware of an opportunity to join Bankers, which at the time I’d generally understood to be in the Insurance business. Granted, I then knew a sum total of zero about Insurance.  Not really exaggerating, either – I’d seen the car insurance commercials with the President from “24” (who also played the voodoo designated hitter in Major League, right?), the cavemen who I guess were selling insurance, and the little talking lizard. But I literally didn’t know much else.

But – as I’d mentioned before, it was time for a change. Plus – I thought, “I mean, how hard can it really be? It’s freaking insurance.  You pay some money, if something goes bad, you get a check – boom.

I was wrong. To the newcomer, it’s pretty darn complicated. The lingo alone is enough to drive one to madness – carriers, reinsurers, PML, at-risk, non-at-risk, TIV, MGAs, TPAs, mayonnaise, Willie Mays. Not to mention all the regulatory complications, various distribution models, product variability, etc, etc. This is supposed to be my full time job, and it seems confusing – so I can appreciate how confusing it probably seems to folks outside the insurance business. So how have I been getting by so far?

Well, for one thing – relying on the experts to translate for me. The good news is, there are people out there who actually understand this stuff – and are willing to translate for normal people like you and me.  Also, I try to read the basics like our See Through Insurance blog.

So, if you find yourself needing to make sense of Insurance – take heart.  Believe me – it’s not you; it’s the industry.