Navigating the insurance industry can be a time-consuming process, and it seems that insurance companies have languages all their own. From property insurance to auto insurance to life insurance, policy documents contain hundreds of acronyms that are foreign to the average consumer. There are some basic terms, however, that are common to most insurance policies and documents.
Auto Insurance Acronyms
In your automobile insurance policy, you will notice some acronyms in the coverage section of your policy. For instance, "ACV" stands for actual cash value, which is the value of your automobile in the event of a policy claim. ACV takes into account the purchase price of the vehicle, minus depreciation. Also in your policy, you will see either "COLL" or "COMP," which stand for Collision and Comprehensive, respectively. Collision insurance covers your vehicle only when it is involved in an accident with another vehicle or object. Comprehensive insurance covers your vehicle, even when no collision occurs. "BI" stands for bodily injury and "PD" stands for property damage.
Health Insurance Acronyms
Health Insurance policies also contain a number of acronyms, both with regard to coverage as well as policy regulations and procedures. A common acronym you will encounter is "HIPAA," which stands for the Health Insurance Portability and Accountability Act. This act was established in 1996 as a way to ensure that an individual's private medical and insurance information is not released without authorisation. Your health insurance provider may ask you about your "PCP." That's your primary care provider, also known as your doctor. Your provider may offer you an "FSA," or a Flexible Spending Account, which allows you to set aside money pretax to pay for allowable medical expenses.
Life Insurance Acronyms
Many individuals take out life insurance policies to ensure their families are protected in the event of a death in the family. There are some common life insurance acronyms that you will encounter in a standard life insurance policy. If you see "ADB" in your policy document, that stands for Accidental Dealth Benefit, which is the amount of money paid to the beneficiary upon the policyholder's death. The "DOD" is the date of death, and "HLV" is the Human Life Value.