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Buying Insurance In Worcester? You Want to Know These Important Terms!

by Lisa Hirbour / October 31, 2016

You may encounter unfamiliar words when reviewing your policy with your local insurance agency in Worcester. You may also see some phrases with a slightly or significantly different meaning to those in everyday English. Here are some terms to note to help you along your journey to better protection (remember -- these are just rough term definitions and they may be slightly different depending on your source!).

Insurance Worcester MA
Shopping for Insurance in Worcester: Translations of Some Tricky Industry Terms

Actual Cash Value Coverage

This term in an insurance policy typically means that the insurer won't automatically pay the amount needed to replace a covered item. Instead, the payout will usually cover the actual amount of damage caused to your Worcester property and will be reduced to account for depreciation, which is the loss in value over time.

Admitted Carrier

An admitted carrier is one approved by a state insurance department and follows its regulations. This in turn means the state will pay out claims if the company gets into financial difficulty.

Claims Made vs. Occurrence

For liability, "Claims Made" means you must make the claim while the policy is still active. "Occurrence" means you can make a claim after the policy period has ended, as long as the relevant event took place during the policy period.


This is a dollar amount that represents the risk you take on, and it is deducted from the payout on any claim. You may have the option to take a higher deductible in return for a lower premium.

Doctrine of Contra Proferentem

This terms seems scary, yet it is great news for policyholders. If a policy term is ambiguous, a court should interpret it in the way that benefits the policyholder.

Gap Insurance

This additional feature on auto policies will pay an extra amount to cover shortfalls, if the current cash value of a stolen or damaged car is less than the amount you still owe on a car loan.

Loss of Use

On a homeowner or renters policy, this pays an amount toward additional costs while your home is repaired or rebuilt. This can include hotel or rent costs, plus a contribution toward grocery items, among other things.

Named Peril vs. All-Risk

"Named peril" means a property insurance policy only covers you for the specified risks. "All-risk" means you are covered for losses that result from any cause other than those specifically excluded by the policy.

Rated Policy

A rated policy charges a higher-than-normal premium to reflect a specific increased risk. For example, this could involve health or life coverage from an individual with a dangerous job.

Recommendation for Insurance Buyers in Worcester and Beyond

These definitions are only guidelines and can differ depending on who you talk to or work with. When looking at your insurance policy, you may find the insurer has included a glossary with specific definitions of words. Read this carefully, since the definition will often override any commonly used or accepted meanings of the word. If you need assistance, a helpful local insurance agent in Worcester should be able to assist you with any confusion. 

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Tags: Insurance Education, Worcester Insurance, Worcester

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