If you are shopping for almost any type of insurance, you’re likely to encounter a number of common insurance terms. Glazing over those terms without understanding what they mean for your coverage isn’t a good idea.
To be sure that you’re comparing apples to apples when you’re buying insurance, you must know your coverage’s benefits and eligibility, deductible, out-of-pocket limits, exclusions and so on. This is how you will be able to know if your insurance is sufficient for your circumstances or not. Also if you understand how these factor correlate, you may be able to pick a policy that fits your priorities at a reasonable cost.
So here are a few points to get you started when you’re shopping for insurance.
Deductible and premium
In general, paying a higher deductible, which is the amount you pay before insurance kicks in, can reduce your premium — that is the money you pay as a price for insurance.
But that is not everything. You must know when the deductible is expected to be paid. For example, some health insurance policies require you to pay the entire amount of the deductible, regardless of the service you are receiving, before any coverage is available. Others might require you to pay the deducible in particular cases only, while many services like routine doctor check-ups are covered from Day One.
So before you opt to pick a higher deductible to reduce your premium, ask about the details. Most insurance providers can provide a list of coverage details, which helps you know what you will have to pay and when.
Going through an exclusion list is very helpful, because you often won’t probably expect what is being excluded. Big exclusions include dental care that you must buy separately or maternity coverage — in the case of health insurance. These are expensive items that you must be aware of, especially if you’re aware of potential needs.
But there are other exclusions that you should pay attention to as well. For example, the geographical coverage or where your insurance is good. If you’re buying auto insurance or health insurance, would it cover your cover if you travel outside the UAE?
Other exclusions can also be circumstantial. For example, a coverage might not be provided in a particular situation or within a particular period. Wait periods are not part of exclusions, but you must be aware of them if you’re getting a new policy.
In short, check out the exclusions to be sure your priorities are covered — or at least not excluded.
Insurance providers are not all the same and the processes are also different from one type of insurance to the other. Be sure you know — and you’re comfortable — with the way your insurance policy will work. For example, if the insurance provider requires you to pay out of pocket first, then reimburse your costs, this could be a hassle, compared to a provider that works directly to provide coverage.
In addition, there could be a number of cases where the process is different. For example, your insurance provider might ask you to acquire approvals or authorisations ahead of receiving certain services. These are typically more expensive services.
There are cases where having insurance is a must. But your cost can vary significantly in cases of an emergency. With health insurance coverage, you must check how your policy covers various emergencies — from getting ill on a weekend day or after typical clinic hours that you have to find an urgent care provider to cases, like an accident, where you must go to an emergency room.
Be aware that care received at an emergency room can be very expensive, so expect to pay a bit more anyway.
The same goes for auto insurance, if you are paying for roadside assistance coverage, check what that means. Will you be towed in case your car is not drivable? Will you be provided with a rental car if your car is in the workshop? Again when it comes to insurance, knowing the details is what makes all the difference.
Rania Oteify, a former Gulf News Business Features Editor, is a Seattle-based editor.
Things to consider before you insure
• How your deductible and premium correlate
• What is covered and what’s not
• How your insurance coverage works
• The cost of coverage in case of an emergency