Builders Risk Coverage, Building and Personal Property Coverage, Business Auto Coverage, Commercial General Liability (CGL) Coverage, Contractors Equipment Coverage, Crime Insurance, Electronic Data Processing Coverage, Employee Benefits Liability Insurance, Employment Practices Liability Insurance, Fiduciary Liability Insurance, Installation Floater Coverage, Owners and Contractors Protective Liability Coverage, Pollution Liability Coverage, Professional Liability Coverage, Railroad Protective Liability Insurance, Rigger’s Liability, Umbrella Coverage, Workers Compensation and Employers Liability Insurance, Wrap-Up Insurance/OCIP’s/CCIP’s
Life Insurance Related
Personal Lines Related
Homeowners Insurance, Renters Insurance, Condominium Owners Insurance, Personal Automobile, Personal Umbrella, Jewelry/Personal Effects Floaters, Boat Owners Insurance, Motorcycle/Miscellaneous Vehicle Insurance,
Builders Risk coverage provides insurance for direct physical loss or damage to a building under construction. The property must be at a location listed on the policy declarations. In addition to providing coverage for the building or structure that is under construction, coverage is in many instances also provided for the foundation, materials & equipment intended to become a permanent part of the building, and temporary structures used at the job site, such as scaffolding. When this coverage is provided for a renovation project, as opposed to new construction, it generally only covers the scope of the project itself, not the existing structure.
This type of insurance provides coverage for loss of or damage to a Building, or Personal Property located on the insureds premises, from fire and other direct physical causes of loss. Coverage applies only to property located in or on the premises listed on the insurance policy. In addition to the structure shown on the declarations of the insurance policy, Building coverage can include completed additions, fixtures (including outdoor fixtures), permanently installed machinery and equipment, and personal property used to maintain or service the building. For Business Personal Property to be covered, it must be located at the premises described on the declarations of the policy, or within 100 feet of the premises.
The Business Auto policy provides liability and physical damage coverage for all autos owned, leased or hired by the insured. Physical damage coverage includes comprehensive and collision coverage. Comprehensive coverage responds to any source of damage to a covered auto with the exception of collision and/or overturn. Collision Coverage responds to damages caused by the covered auto’s collision with another object or overturn of the covered auto. Another object is not limited to just another vehicle, but could be an animal, bird, person, tree, building or sign.
The Commercial General Liability policy insures the bodily injury liability and property damage liability exposures of a variety of commercial businesses, enterprises and ventures. The basic exposures of the named insured covered by the CGL coverage forms include:
- Ownership, maintenance or use of the premises
- Operations conducted or performed on or off the premises
- Written contracts and agreements
- Products manufactured, sold or distributed
- Completed operations
- Personal injury
- Advertising injury
- Medical payments on the premises or at jobsites, without regard to fault
Each of these coverages is subject to certain policy definitions, exclusions and limitations.
The insurance company agrees to pay amounts the insured is legally obligated to pay as damages for bodily injury and property damage covered by this insurance. It also has the right and duty to defend the insured against any suit seeking those damages but only suits seeking damages covered by this insurance. At its discretion, the insurance company can investigate any loss and settle any resulting claim or suit but the amount paid as damages is subject to the policy limits. The insurance company’s right and duty to defend ends when the applicable limit of insurance is used up by payment of judgments and settlements.
A Contractors Equipment policy provides physical damage insurance for contractors equipment located at the insureds premises, job site or while it is in transit. These policies cover various types of equipment including cranes, graders, forklifts, backhoes, bulldozers, tools, office trailers, man lifts and similar equipment. Coverage can also be purchased for leased, rented or borrowed equipment. Coverage can be provided with the equipment listed or scheduled on the policy, a schedule of equipment “on file with company,” with blanket (unscheduled) coverage or on a reporting form. Each form has its advantages and they must be weighed against the restrictions and responsibilities involved with each.
Crime insurance protects the insured from loss due to criminal activity. The typical exposures that are covered include theft of money or property by employees, forgery or alteration of checks, and theft of money and securities from the insureds premises.
This type of coverage insures against loss or damage to electronic data processing equipment including hardware, software and media owned, leased or used by the insured. Computerized production equipment may also be insured in addition to conventional computer equipment. Coverage can be written to include losses due to mechanical breakdown, as well as for hacking (unauthorized computer system access), computer viruses, web sites, power shortages, outages and overloads.
Employee Benefits Liability coverage protects employers from liability incurred due to any errors in the administration of their employee benefit plans. Typical scenarios include enrollment errors as well as improper COBRA administration following termination. This type of policy does not extend coverage for breaches of fiduciary duty or for employment practice related exposures (i.e. wrongful termination, discrimination, harassment).
This type of insurance responds to lawsuits brought by employees (past, present or prospects), or governmental entities against the insured employer, alleging wrongful discharge, discrimination or certain types of harassment.
Fiduciary Liability Insurance pays, on behalf of the insured, legal liability arising from claims for alleged failure to prudently act within the meaning of the Employee Retirement Income Security Act of 1974 (ERISA). The named insured on these policies generally includes the trust or employee benefit plan, any trustee, officer or employee of the trust or employee benefit plan, the employer who is sponsor of a plan, and any other individual or organization designated as a fiduciary.
An Installation Floater provides coverage for direct physical loss of personal property installed, fabricated or erected by an insured, usually a contractor. Coverage applies to owned property and property of others and covers the insurable interest of that contractor in the property. It can be written to cover a single project within an existing building, such as updating the plumbing system in an existing building. It can also be written to cover a contractor who is acting as a subcontractor on a building under construction.
An Owners and Contractors Protective Liability policy is designed to protect a property or business owner for the potential liability exposure resulting from the negligent act of a contractor hired to perform work on the insured’s behalf. The contractor is the actual purchaser of the policy but the protection is for the insured property or business owner for whom the work is being done. Coverage is not comprehensive and is limited to a specific location and project.
Since most Commercial General Liability policies attempt to exclude virtually all types of pollution occurrences from coverage, a separate pollution coverage form can be purchased to provide insurance protection for varying degrees of pollution coverage. Coverage can be obtained for a specific location or it can be written to protect all jobsites.
Professional liability coverage (sometimes referred to as Errors and Omissions coverage) is designed to protect the professional from actions that stem from their professional capacity and training. The types of professionals that generally need this coverage include architects, engineers, design/builders and construction managers.
This liability coverage is designed to protect a railroad or project owner for the potential liability exposure that results from the negligent act of a general contractor or a subcontractor hired to perform work on the insureds behalf while working on or around railroads. While the general contractor or subcontractor is the actual purchaser of the policy, the protection is for the insured railroad or project owner for whom the work is being done. Coverage is limited to a specific location and project.
Rigger’s Liability insurance provides “on hook” coverage for third party liability for damage to property being hoisted by a rigger or crane operator.
A Commercial Umbrella liability policy provides coverage that supplements the limits of an insured’s General Liability, Automobile Liability, and Employers Liability policies. The latter are considered underlying or primary policies. Umbrellas also protect insureds from exclusions and gaps in their primary liability insurance. Covered causes of loss that are not normally included in primary policies are subject to a self-insured retention (SIR) which is the responsibility of the insured to pay. SIRs in the amounts of $10,000 or $25,000 are common. An Umbrella policy’s coverage is triggered when the limits of the underlying insurance have been exhausted, or when a claim occurs that is not covered by an underlying policy. If such a loss qualifies for coverage under the umbrella, the amount would first have to exceed any self-insured retention.
The policy provides the mandatory benefits prescribed and required by the various state laws for accidental work-related injuries that occur in the course of employment, subject to its terms and conditions. It must be emphasized that the injury must arise from and be related to the injured worker’s job duties. The policy also covers related costs for disease or death that occurs as a result of the accident. If the employed worker’s injury is not compensable under workers compensation or occupational disease laws, Employers Liability coverage responds to the injured worker’s allegations of negligence on the part of the employer, subject to its terms, conditions, limitations and exclusions. The coverage provided by the basic policy may be expanded, restricted, clarified or brought into compliance with specific state regulatory requirements by use of a variety of available endorsements.
Wrap-up insurance programs allow coverages for multiple insureds (owner, prime contractor, trade subcontractors) to be bundled (or wrapped up) into one consolidated insurance program. Wrap-ups are typically used on very large construction projects involving many contractors. They can provide the program sponsor with certain cost savings, and can offer some advantages for the enrolled contractors working on the project, as well.
An Owner-controlled insurance program (OCIP) is a wrap-up program under which a project owner provides various insurance coverages to all enrolled contractors and subcontractors. A Contractor-controlled insurance program (CCIP) is a wrap-up program under which the General Contractor is the sponsor. While OCIP’s are more common in the U.S. today, OCIP’s and CCIP’s are basically the same. The main difference between the two is sponsorship (owner vs. contractor) and control. OCIP’s are generally project specific, while CCIP’s generally cover multiple projects controlled by the general contractor, typically referred to as a Rolling CCIP.
A bid bond guarantees to owners that the contractor bidding for the contract will, if the bid is accepted, enter into a contract and provide the required performance and payment bonds for the actual project.
A Performance Bond guarantees that a contractor will perform its obligations assumed in the contract, in accordance with the plans and specifications, for an agreed sum of money to be paid to the contractor by the owner, whether public or private. This bond follows in sequence after a bid bond has been posted and the bid has been awarded. A Performance Bond is normally written in conjunction with a Payment Bond.
A Labor and Material Payment Bond guarantees that a contractor will pay all legitimate bills for labor and material owed to subcontractors and suppliers in connection with a construction contract. This bond follows in sequence after a bid bond has been posted and the bid has been awarded. A Payment Bond is normally written in conjunction with a Performance Bond, although sometimes a project owner will only require a Payment Bond.
A subdivision bond guarantees to a County or municipality that the developer or contractor will provide and install all required public improvements outlined in the filed site plan.
Most municipalities and states require license bonds of many types of business in order to obtain permits or licenses. These bonds guarantee that the license holder will conduct its business in accordance with all of the rules and requirements of the license.
Ambulatory Care – Health care services that do not require a hospital stay, such as those delivered in a doctor’s office, clinic, or day surgery center.
Assignment of Benefits – This is signing a document allowing your hospital or doctor to collect your health insurance benefits directly from your health carrier. Otherwise, you pay for treatment and the insurance company reimburses you.
Benefits – The amount of money payable by an insurance company to a claimant under the insurance policy.
Case Management – A technique that insurance companies and HMOs use to ensure that individuals receive appropriate, timely, and reasonable health care services.
Claim – A request by an individual (or his/her provider) for the insurance company to pay for services obtained.
Coinsurance – The money that an individual is required to pay for services, after a deductible has been paid. In some health plans, coinsurance is referred to as “copayment.” It is often a specified percentage of the charges. For example, the employee pays 20% of the charges while the health plan pays 80%.
Copayment – An arrangement where an individual pays a specified amount for various health care services and the health plan or insurance company pays the remainder. The individual must usually pay his or her share when services are rendered. The concept is similar to coinsurance, except that copayments are usually a set dollar amount (such as $20 per office visit), rather than a percentage of the charges.
Deductible – A set dollar amount that a person must pay before insurance coverage for medical expenses can begin. They are usually charged on an annual basis.
Denial of claim – Refusal by an insurance company to pay a submitted request for health care services obtained.
Employee Assistance Program (EAP) – Mental health counseling services that are sometimes offered by insurance companies or employers. Typically, individuals or employers do not have to pay directly for EAP services provided.
Exclusions and limitations – Specific conditions or circumstances for which an insurance policy or plan will not provide coverage (exclusions), or for which coverage is specifically limited (limitations.)
Health Maintenance Organization (HMO) – Prepaid, or capitated, health care plans in which individuals pay a small monthly fee to be a member of the HMO, as well as small fees or copayments for specified health care services. Services are provided by physicians and allied health care personnel who are employed by or under contract with the HMO. HMOs are available to both individuals and employer groups.
Indemnity plans – Also known as “fee-for-service” plans. These existed primarily before the rise of HMOs and PPOs. The individual pays a predetermined percentage of the cost of health care services, and the insurance company (or self-insured employer) pays the other remaining charges. Fees for services are determined by individual providers, and therefore vary from physician to physician. Indemnity health plans allow individuals to choose their own health care professionals – there are no provider networks from which to choose.
Independent Practice Association (IPA) – A group of independent practicing physicians who band together for the purpose of contracting with HMOs, PPOs, and insurance companies for their services.
In-Network – Typically refers to physicians, hospitals, or other health care providers who contract with the insurance plan (usually an HMO or PPO) to provide services to its members. Coverage for services received from in-network providers will typically be greater than for services received from out-of-network providers, depending on the plan.
Long-term Care Insurance – Insurance policies that cover the costs of providing nursing care, home health care services, and custodial care for the aged and infirm.
Managed Care – A system of health care delivery that is characterized by arrangements with selected providers, ongoing quality control and utilization review programs, and financial incentives for members to use providers and procedures covered by the plan.
Maximum Benefit – The maximum dollar amount that an insurance company will pay for claims, either for a specific service or procedure, or during a specified period of time.
Medically Necessary – A term used to describe the supplies and services needed to diagnose and treat a medical condition in accordance with the standards of good medical practice. Many health plans will only pay for treatment deemed medically necessary. For example, most plans will not cover elective cosmetic surgery.
Out-of-Network – Typically refers to physicians, hospitals, or other health care providers who do not contract with the insurance plan (usually an HMO or PPO) to provide services to its members. Depending upon the insurance plan, expenses incurred for services provided by out-of-network providers might not be covered, or coverage may be less than for in-network providers.
Out-of-Pocket Maximum – The total amount paid each year by the member for the deductible and coinsurance. After reaching the out-of-pocket maximum, the plan pays 100% of the allowable charges for covered services the rest of that calendar year.
Point-Of-Service Plan (POS) – A type of HMO that allows the patient to see either in-network or out-of-network providers. However, the patient pays more out of pocket when using an out-of-network provider.
Pre-admission Certification – Also called “precertification” or “pre-admission review.” Approval granted by a case manager or insurance company representative (usually a nurse) for a person to be admitted to a hospital or inpatient facility before admittance. The goal is to ensure that individuals are not exposed to inappropriate health care services, or services that are not medically necessary.
Pre-existing Condition – Any medical condition that was diagnosed or treated within a specified period immediately before a health insurance policy became effective. These conditions may not be covered for a specified period of time under the new policy.
Preferred Provider Organization (PPO) – A type of managed care plan in which doctors and hospitals agree to provide discounted rates to plan members. Patients are typically reimbursed 80-100% for treatment received within the network, versus 50-70% outside the network.
Primary Care Physician (PCP) – A health care professional who is responsible for monitoring an individual’s overall health care needs. Typically, a PCP serves as a gatekeeper for an individual’s medical care, referring him or her to specialists and admitting him or her to hospitals when needed.
Reasonable and Customary Charges – The commonly charged or prevailing fees for health services within a geographic area. If charges are higher than what an insurance carrier considers reasonable and customary, the carrier will not pay the full amount and instead will pay what is deemed appropriate for the particular service. The remaining charges then are the responsibility of the patient.
Self-Insured – A health benefits plan in which the employer is at risk for the cost of its employees’ health care. Typically, a third party provides administrative services for the plan to the employer group.
Waiting Period – A period of time in which your health plan does not provide coverage for a particular pre-existing condition.
Waiver – A rider or amendment to a policy that restricts benefits by excluding certain medical conditions from coverage.
Health Care Facilities Defined
Ambulatory setting – institutions such as surgery centers, clinics, or other outpatient facilities that provide outpatient health care services.
Approved health care facility or program – a facility or program that is licensed, certified, or otherwise authorized according to the laws of the state to provide health care, and which has been approved by a health plan as described in the contract.
Extended care facility – a nursing home or nursing center that is licensed to operate in accordance with all applicable state and local laws and that provides 24-hour nursing care. These facilities offer skilled, intermediate, or custodial care, or any combination of these types of care.
Facility – a physical location where health care services are provided, such as a hospital, clinic, emergency room, or ambulatory care center.
Home Health Agency (HHA) – a state and federally certified facility that is approved to provide health care services in the home.
Hospice – a facility or program that is primarily designed to provide pain relief, symptom management, and supportive services for the terminally ill and their families.
Intermediate care facility – a facility that is licensed by the state and provides nursing care to patients who require a degree of care that is less than would be received in a hospital or skilled nursing facility, but more than room and board.
Long-term care facility – usually a state licensed facility that provides skilled nursing services, intermediate care, and custodial care.
Nursing home – a licensed facility that provides general nursing care to chronically ill patients who are unable to care for themselves and their daily living needs. Also referred to as a long-term care facility.
Outpatient surgical center – a health care facility, separate from a hospital, that provides pre-scheduled outpatient surgical services. Also called a freestanding outpatient surgical center or day-surgery center.
Skilled nursing facility – a facility either freestanding or part of a hospital, which provides rehabilitation and medical care that is of lesser intensity than would be provided in a hospital.
Sub-acute care facility – an intermediate care facility which provides care for patients too ill to be released to long-term care or their homes, but not so ill that they require ongoing hospitalization.
Treatment facility – any residential or non-residential facility that is authorized to provide treatment for mental health conditions or substance abuse.
Urgent care center – a health care facility whose primary purpose is the provision of immediate, short-term medical care for minor but urgent medical conditions. Serves as an alternative to the hospital emergency room.
Types of Care Defined
Activities of Daily Living (ADL) – everyday living functions and activities performed by individuals without assistance, including walking, dressing, personal hygiene, and eating.
Acute care – skilled medical care provided by medical and nursing personnel in order to restore a person to good health.
Adult day care – a type of care (usually custodial) for individuals who require assistance with various activities of daily living while their primary caregivers are absent.
Aftercare – patient services required after hospitalization or rehabilitation.
Ambulatory care – care given on an outpatient basis.
Ancillary care – additional services (other than room and board) performed relating to a specific incident of care. Includes services such as x-rays, lab work, radiology, and anesthesia.
Behavioral health care – assessment and treatment of mental illness or substance abuse disorders.
Custodial care – care primarily to meet a patient’s personal needs, such as bathing, dressing, eating, or taking medicine. Can be provided by medical or non-medical personnel, but must be administered according to a doctor’s order.
Emergency services – services provided for an unforeseen acute illness or injury that requires immediate medical attention.
Home health care – skilled or unskilled care provided in an individual’s home, usually on a part-time basis. Examples include part-time skilled nursing care, speech therapy, physical or occupational therapy, part-time services from home health aides or assistance with household chores.
Hospice services – services provided to the terminally ill and their families.
Intermediate nursing care – health or medical care that is occasional or rehabilitative, ordered by a physician, and performed by skilled medical personnel.
Long-term care – care provided to persons with chronic diseases or disabilities who need assistance with daily activities for an extended period. Includes a wide range of health and social services provided under the supervision of medical professionals.
Office visit – services provided in a physician’s office.
Outpatient services – care received in a hospital or ambulatory care center that does not require an overnight stay.
Preventive care – proactive, comprehensive care emphasizing prevention, early detection, and early treatment of conditions. Generally includes routine physical exams, immunizations, and well-person care.
Primary care – basic or general health care, traditionally provided by family practice physicians, pediatricians, or internal medicine practitioners.
Respite care – temporary health or medical care designed to provide a short rest period for a caregiver of a chronically or terminally ill person.
Secondary care – medical services provided by doctors who do not have first contact with patients, such as urologists, cardiologists, and so on.
Specialty care – services delivered by a health care provider who has received advanced training in a specific field of medicine. Specialty care also includes care provided in specialty facilities, and emergency care.
Tertiary care – health care services provided by highly specialized providers, such as neurosurgeons, thoracic surgeons, and intensive care units. These services often require highly sophisticated technologies and facilities.
Managed Care Basics
Managed care – a system of delivering health care that is characterized by contractual arrangements with selected providers (doctors, hospitals, laboratories, etc.), ongoing quality control and utilization review programs, and financial incentives for members to use providers and procedures covered by the plan; a broad term that encompasses a variety of different types of organizations.
Service area – the geographic area serviced by a health plan or insurance carrier, as approved by state regulatory agencies. In and out-of-area services are defined below.
Plan Types and Characteristics
Health Maintenance Organization (HMO) – a managed care organization that provides, offers, or arranges for coverage of designated health services for plan members for a fixed, prepaid premium. Patients must choose doctors, hospitals, and other health care providers from the plan’s provider list in order to be fully covered. Emphasis is placed on preventive care and cost management. HMO models vary and are defined below.
Open access – a managed care concept in which members are allowed to “self-refer” themselves to participating physicians for specialty care without a referral from a primary care physician or authorization from the plan.
Preferred Provider Organization (PPO) – a managed care plan in which the network of doctors and hospitals provides services to plan members at discounted rates. Unlike HMOs, most PPOs do not use the primary care physician to oversee patients’ overall care, allowing members to consult specialists or out-of-network providers whenever they wish. Coverage is usually less for out-of-network providers. PPOs usually do not exercise tight management over medical care.
Providers and Provider Networks
Referral – a physician’s or health plan’s recommendation for a covered person to receive care from a different physician or facility.
Health Care Cost Management
Case management – the medical management process wherein health plans identify patients with specific or chronic health conditions, and interact with their physician(s) to ensure that these individuals receive medically necessary and appropriate health care services.
Case manager – a health care professional (e.g. nurse, doctor, or social worker) who works with patients, physicians and other health care providers, and health plans to help determine medically necessary and appropriate health care for certain individuals with specific or chronic health conditions.
Disease management – the process of identification and evaluation of patients with chronic diseases, using interventions designed to promote ongoing management and prevent worsening of the disease.
Medical cost management – processes and procedures used by health plans to control how members use health care services.
Second surgical opinion – a cost containment technique to help patients and health plans determine the medical necessity of a particular procedure, or whether an alternative treatment method is appropriate.
Consumer-driven or consumer-directed healthcare (CDHC) is designed to allow employees to have more power over their health coverage and options. These types of plans are on the fast track to becoming extremely popular and truly put the consumer in the driver’s seat. Some common CDHC terms are defined below.
Health Terms Defined
Archer Medical Savings Accounts (Archer MSAs) – These are medical savings accounts that are available on a limited basis to self-employed individuals and employees of certain small employers. The MSA is used less frequently after the creation of a the more favorable HSA plan.
Consumer-Driven (Consumer-Directed or Consumer Choice) Healthcare (CDHC) – Health insurance programs and plans that are intended to make consumers more informed about their health. Under these plans, consumers use healthcare services more effectively, have more control over their healthcare dollars and the plans are designed to be more affordable. These medical plans also offer reduced premium costs in exchange for higher deductibles. Plus, they offer incentives and tools to manage both healthcare decisions and costs including: Web tools used to make decisions about healthcare plan choices, education information about healthcare, preventive coverage at little or no cost, the use of care coaches and disease management programs. Health Reimbursement Arrangements (HRAs) and Health Savings Accounts (HSAs) are common examples of CDHC.
Consumerism – A marketplace trend that empowers and supports individuals in their consumption of healthcare services by allowing for increased flexibility, credible prices and quality healthcare information to make informed decisions.
Cost sharing – Provisions within a healthcare plan that requires individuals to pay for a portion of their healthcare services such as co-payments, deductibles and co-insurance.
Covered expenses – Healthcare expenses that are covered under an individual’s health plan.
Defined contribution health plan – These plans are an employer-provided CDHC arrangement intended to encourage the efficient use of healthcare by fixing employer contributions at a certain level rather than promising a specific benefit regardless of cost.
Flexible Spending Account (FSA) – An account that allows individuals to save tax-free dollars for qualified medical and/or dependent care expenses that are not reimbursed. Both the employer and employee can contribute to the account and health insurance is not required to open an FSA. Individuals determine how much they want to contribute to the FSA at the beginning of the plan year and if there are funds left in the account at the end of the plan year, the money is forfeited back to the employer.
Generic Drug – A term used to describe an identical or bioequivalent medication to a brand name medication in dosage form, safety, strength, route of administration, quality, performance and intended use. Generic medications are sold significantly cheaper than their branded counterparts, though they are chemically identical.
Health Reimbursement Arrangement (HRA) – An account in which employers deposit pre-tax dollars for each of their covered employees. Employees can then use this account as reimbursement for qualified healthcare expenses. If there are funds left over in the account at the end of the plan year, it can be carried over into the next year; however, this type of fund is not transferable from employer to employer.
Health Savings Account (HSA) – This is a medical savings account set up and used to pay for eligible medical expenses. The money is taken directly from an employee’s paycheck before taxes and is then placed in the account. To open an HSA, individuals must also have a high-deductible health plan (HDHP). After age 65, the account contributions can be used for non-health-related expenses without facing a penalty; however, HSA withdrawals for non-medical expenses are subject to income taxes (before or after age 65). HSAs must be coupled with qualified high-deductible health plans (HDHP) that cover catastrophic healthcare expenses after the deductible.
High-Deductible Health Plan (HDHP) – A qualified health plan that gives consumers more control over their healthcare spending by offering lower monthly premiums in exchange for higher deductibles and out-of-pocket limits. These plans are designed to meet specifications outlined by the Medicare Prescription Drug, Improvement and Modernization Act of 2003 from the U.S. Treasury Department regarding minimum deductibles and out-of-pocket maximums (OPM). These plans also allow consumers to open a tax-advantage health savings account (HSA).
Out-of-Pocket Maximum (OPM) – This is the most individuals generally pay for covered services during a benefit period. Both the deductible and the coinsurance apply towards meeting the OPM, but co-payments may not apply. Under some plans, the deductible and OPM may have the same dollar limit.
Premium – The amount paid monthly for a health plan in exchange for providing coverage. Health plans with higher deductibles typically have lower premiums.
Preventive care – Healthcare services that are for prevention, not for the treatment of active diseases or illnesses. This type of care focuses on wellness, health promotion and other initiatives that reduce the risk of future illnesses or injuries such as routine physical exams, mammograms or colon cancer screenings.
Qualified medical expense – This is generally an expenditure for medical care as defined by section 213 (d) of the Internal Revenue Code for an individual or his/her spouse or dependants, to the extent that such expenses are not reimbursed by insurance or otherwise.
LIFE INSURANCE RELATED
Term life insurance provides insurance protection for a specified period of time, such as 10, 20 or 30 years. If the insured dies within the term period and the policy is in force, a death benefit is paid to the insured’s beneficiary. If the insured is still living at the end of the term, protection ceases unless the policy is renewed. There is no “accumulation” element, or cash value with term life insurance.
Permanent life insurance, including Whole Life Insurance and Universal Life Insurance, can provide protection for your entire lifetime, or in certain instances up to a specific age. Permanent life insurance policies can build a cash value—money that you can borrow against and in some instances, withdraw to help meet future goals.
PERSONAL LINES RELATED
Homeowners Insurance – Homeowners Insurance provides coverage for dwellings, private structures and unscheduled personal property on and away from your premises. Additional living expense and rental value is also covered. Personal liability insurance, including medical payments coverage and physical damage to property of others coverage, completes the package.
Renters Insurance – Renters Insurance is very similar to the unscheduled personal property, the additional living expense, and the rental value coverages under traditional Homeowners Insurance forms. It may be issued to a tenant of a dwelling or an apartment. Liability protection, including medical payments and physical damage to property of others coverage, completes the package.
Condominium Owners Insurance – Condominium Unit Owners insurance provides coverage for the defined property for which a unit-owner is responsible to insure under the condominium association bylaws and activities of the owner of a condominium unit. The coverage is comparable to that afforded an apartment tenant under a tenants (contents) broad form, but modified for the special conditions identified with condominium living. This form meshes with insurance carried by a condominium association for the structure and the risks jointly shared by all of the unit-owners. Loss assessment coverage, reimbursing the insured for his or her share of an uninsured loss to collectively owned property, is an option.
Personal Automobile – Personal Automobile Insurance provides protection under four coverage parts. Liability coverage protects the insured against most auto-related lawsuits. Medical payments covers expenses incurred by an insured without regard for fault. Uninsured motorists coverage and underinsured motorists coverage must be offered in most states based on state mandate. Physical damage coverage provides property insurance for vehicles owned by the insured.
Personal Umbrella – Personal Umbrella insurance provides excess coverage over underlying automobile and homeowners liability coverages, as well as covering some uninsured exposures, such as personal injury. It is designed to provide coverage for professional people, those with above-average incomes, those with larger assets to protect, or unusual liability exposures.
Jewelry/Personal Effects Floaters – Jewelry and furs are often insured by endorsing coverage onto a homeowners policy. However, specific coverage for personal jewelry and furs may be purchased as a separate policy. Such coverage is typically provided on a form that is comparable to a special form policy. In other words, protection is provided against all sources that cause direct damage or loss unless the source is excluded. Even with limitations, such forms are significantly broader than those that list (or name) the covered perils.
Motorcycle/Miscellaneous Vehicle Insurance – These insurance policies protect insureds against their liability involving the ownership and use of motorcycles, motor scooters, motor homes, golf carts, or other similar vehicles.