No jargon. No legalese. Just plain-English explanations of the insurance terms you actually encounter on bills, policies, and EOBs.
What your stuff is worth today — not what you paid for it. If your 5-year-old TV breaks, they pay you what a 5-year-old TV is worth, not what a new one costs.
The maximum your insurance company will pay for a service. If the doctor charges more, you don't pay the extra — it gets written off (for in-network providers).
When insurance denies something and you say 'I disagree — look again.' You have the legal right to do this, and many denials can be overturned on appeal.
When a doctor bills you for the difference between what they charged and what insurance paid. For in-network providers, this is generally prohibited under their contract with your insurer. The No Surprises Act also protects you from this in many situations.
The person who gets the money if you die (on a life insurance policy). Make sure this is up to date — it overrides your will.
What the doctor or hospital actually charged — this is almost always way more than what anyone actually pays. Think of it as the 'sticker price.'
A request to your insurance company to pay for something. Usually the doctor's office files this for you automatically.
A law that lets you keep your employer's health insurance after you leave a job — but you pay the full cost yourself (which is usually expensive).
Your share of the cost AFTER you've met your deductible, expressed as a percentage. If your plan is '80/20,' insurance pays 80% and you pay 20%.
A flat fee you pay every time you use a service — like $25 for a doctor visit or $10 for a prescription. You know the cost upfront.
Something you THINK is covered but actually isn't — or something you need that no policy covers. This is where people get hit with surprise costs.
The money your life insurance pays to your beneficiary when you die. This is the main point of life insurance.
The amount you pay out of your own pocket BEFORE insurance starts paying. Think of it as the 'entry fee' to use your insurance.
When insurance refuses to pay for something. Don't panic — you have the right to appeal, and many denials can be reconsidered.
The part of your home insurance that pays to rebuild your actual house if it's destroyed. This should match what it would cost to rebuild — not what you paid for the house.
The document your insurance sends after a doctor visit. It's NOT a bill — it's a breakdown of what was charged, what insurance paid, and what you owe.
Something your policy specifically does NOT cover. Read these carefully — this is where people get surprised.
The total deductible for your whole family combined. Once the family hits this number, insurance covers everyone — even family members who haven't met their individual deductible yet.
The list of prescription drugs your insurance covers. If your medication isn't on the list, you might pay full price.
Extra time to pay your premium after the due date without losing coverage. Usually 30 days, but check your policy.
A type of health plan where you pick one primary care doctor who coordinates all your care. You usually need a referral to see a specialist. Lower cost, less flexibility.
Doctors and hospitals that have a deal with your insurance company. You pay less when you use them.
Pays when YOU cause damage to someone else or their property. This is the most important part of auto and home insurance.
A federal law (since 2022) designed to protect you from surprise medical bills. If you go to an in-network hospital but see an out-of-network doctor there, you may be protected from the extra charges under this law.
Doctors who DON'T have a deal with your insurance. You'll pay significantly more — sometimes the full amount.
The MOST you'll ever pay in a year. After you hit this number, insurance covers 100% of everything. This is your financial safety net.
The total amount YOU owe after insurance does its part. This is the number on the EOB that actually matters to your wallet.
A health plan that gives you more freedom to choose doctors. You can see specialists without a referral. Costs more than an HMO, but more flexibility.
Your monthly (or annual) payment just to HAVE insurance — whether you use it or not. Think of it like a subscription fee.
When insurance requires your doctor to get permission BEFORE doing a procedure or prescribing a medication. If they skip this step, insurance might not pay.
Insurance pays to replace your damaged stuff with brand new equivalent items — no deduction for age or wear. This is better than 'actual cash value.'
An add-on to your policy that gives you extra coverage for something specific — like expensive jewelry, a home office, or identity theft.
After insurance pays your claim, they go after the person who caused the damage to get their money back. You might need to cooperate with this process.
Extra liability coverage that kicks in when your auto or home insurance limits are maxed out. Protects your savings and assets from lawsuits.
When you have insurance, but not enough to cover a major loss. Your home insurance covers $200,000 but rebuilding costs $350,000 — that's underinsured.
Time you must wait after buying a policy before certain coverage kicks in. Common with dental (major work) and disability insurance.
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