Med Pay? PIP? Dec pages? Insurance terms, explained

With all kinds of different coverages for all kinds of different needs, insurance can be very confusing. And to make it even more challenging, at times it probably seems like insurance websites and policy documents are written in a completely foreign language.

General insurance terms

• Actual cash value: This type of coverage pays according to what an item was worth at the time it was damaged—it takes depreciation and wear and tear into account.
• Actual replacement cost: This pays the amount it would cost to replace a damaged item with a new one.
• Adjuster: A person who works for an insurance company to evaluate losses and settle claims.
• Deductible: The amount you agree to pay out of pocket before your insurance coverage kicks in.

Auto insurance terms

• Bodily injury coverage: Covers expenses for physical injuries, such as hospital bills or medical care.
• Collision coverage: This pays for damage to a vehicle caused by you or someone else covered by your policy.
• PIP (personal injury protection): This pays medical expenses for a policyholder or additional insured, and their passengers, if they are hurt in an auto accident.

Homeowners insurance terms

• Flood insurance: Typically, standard homeowners policies do not provide coverage for flooding—it must be purchased separately.
• Peril: A specifically defined risk, such as hail, flooding, wind, etc.