Barth Howard Homeowners Insurance and Auto Insurance in San Ramon, California 

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Glossary


 

"Above the Line" Deduction
In regard to HSAs, this term refers to the fact that if you make HSA contributions directly from your paycheck (before taxes are calculated and paid), you will reduce your total taxable income, regardless of whether you itemize or use the standard deduction on your income tax form.

If you contribute to your HSA with after-tax dollars, you may deduct your contribution amount on your tax form ("below the line"), subject to the maximum annual contribution limits from your taxes at filing time.

 

Artisan Contractor

An Artisan Contractor is one who's finished work is primarily the result of skilled manual labor as opposed to the extensive use of machinery.  The industry is made of up of two major segments:

     Construction: e.g. Plumbers, Electricians, Heating and Air Conditioning and Painters
     Service: e.g. Landscape Gardeners, Janitorial Services and Carpet Cleaners

 

Beneficiary
You may select an individual (or individuals) as your beneficiary to inherit a life insurance death benefit or any HSA funds that remain in your account after death.

 

Blanket Coverage

Any insurance policy that covers one or more broad classes of persons or property, without identifying the specific subjects of insurance in the contract.  A broad medical expense policy that covers all medical expenses (except those that are specifically excluded), up to a maximum limit without any limitation on specific types of medical expenses.  see umbrella

 

Bodily Injury Liability

Bodily injury liability occurs when you injure other people, e.g. pedestrians, passengers in vehicles, sports, while on vacation, at school, etc. When injury claims or lawsuits are brought against you, bodily injury liability coverage provides for your legal defense.  Also, if you are found legally liable by an investigation, or by a judge, this coverage pays the damages assessed against you up to the dollar limits of your policy.

 

Catch-up Contributions
Catch-up contributions are additional funds above those listed as the annual contribution limits that an accountholder may make beginning in the year when they reach age 55.

 

Claim
Submission(s) to an insurance company by the insured/enrollee that will be used to determine if and what amount of benefits should be applied for the services rendered. For a health insurance plan, "qualified medical expense" claims may be aggregated to reach an annual deductible.

 

COBRA
A federal law that, among other things, requires employers to offer employees who would otherwise lose their group health plan (due to events such as termination of employment or a child losing dependent status) the opportunity to continue their current coverage under the company’s group plan. Employers are required to make health plans available for periods ranging from 18 to 36 months.

 

Co-insurance
A possible provision within health plan coverage where the insured shares in the cost of covered services, usually expressed as a percentage basis in a summary plan description, after the insured individual meets the plan deductible.

For example, a plan with 80/20 coinsurance describes coverage where after the insured meets their deductible, the insurance company will pay 80% of the remaining covered expenses up to a set amount and the insured will pay 20%.

 

Co-payment
A fixed charge that an enrollee pays for service received. Co-payments remain at the same dollar amount regardless of the total cost of the service. Example: A fee at the time of a visit to a physician’s office or the emergency room, or at the time of purchasing prescription drugs.

 

Comprehensive Coverage

In regard to auto insurance, this is when your car is damaged by fire, theft, vandalism, glass breakage, windstorm damage or even contact with an animal.  This coverage will pay the repair costs up to your policy limits and less your deductible. It does not include wear and tear on your car, engine failure or other mechanical difficulties. When financing your car, comprehensive coverage is usually required by the lien-holder or lender.

 

Condominium

A Condominium is a multi-unit building(s) that provides for a divided interest in real property.

A Condominium owner has title to an undivided interest in common areas - e.g., the land, the public portions of the building, foundation, the outer walls, roof, and the spaces provided for parking and recreation.  The Condominium owner also possesses an exclusive interest in a three-dimensional space within the outer walls, roof, ceiling, and floors. 

(compare with Townhouse)

 

Consumer-Directed Health Care (CDHC)
A term that refers to health plans in which employees have a personal health account, such as a Health Savings Account (HSA) or a Health Reimbursement Account (HRA), from which they pay medical expenses directly.

 

Consumer-Directed Health Plans (CDHP)
Consumer-directed health plans typically offer reduced premium costs in exchange for a higher deductible. In addition, many provide incentives and tools to manage both health care decisions and the costs associated with them. A typical consumer-directed plan may include:

Web-based tools that help you make decisions about your health plan choices, how much to contribute to your Health Savings Account; Web-based educational information you need to make informed decisions about your health care; Preventive coverage at little or no cost; and/or Other support features, such as disease management programs.

 

Covered Expenses
Services for which the health plan makes either a full or partial payment.

 

Deductible
An amount of covered "qualified expenses" an enrollee is required to pay before an insurance policy/plan assumes part or all of additional costs as outlined in the policy/plan of coverage. For a health plan, if the deductible is $1,000, the enrollee must first pay $1,000 of qualified health care expenses before additional costs will be covered in part or in full by the health plan.

 

Enrollee
An enrollee is an individual who is eligible for and participating in coverage under a health insurance policy. This is also referred to as a member, insured or participant.

 

Errors & Omissions (E&O)

Errors & Omissions insurance, commonly called E&O or Professional Liability insurance, is a policy that provides coverage for an individual in the event of unintentional mistakes. 

E&O Insurance covers damages arising out of the insured's negligence, mistakes, or failure to take appropriate action in the performance of business or professional duties.

 

First-dollar Coverage
Immediate reimbursement or no payment required for specific covered expenses, without meeting a deductible. Some preventive serves may have first-dollar coverage under the terms of your health plan; check your Certificate of Coverage or Plan Summary for more details.

 

Flexible spending account (FSA)
A pre-tax savings account funded by payroll deductions that an employee can use to pay for medical expenses not reimbursed by their health plan. Limited purpose FSAs for vision, dental, or preventive care benefits are permitted in combination with HSAs.

Note: unlike HSAs, most FSA balances do not roll over for future years’ expenses.

 

Generic Drugs
A brand-name drug carries the name given to it by the original manufacturer, who retains the exclusive right to sell the drug for a certain period. After that period has expired, the formula of the drug must be released and other manufacturers are free to develop a version of it, known as a generic drug.

A generic version of a drug may cost 30 to 60 percent less than the corresponding brand-name drug, and generic versions are available for half of all prescription drugs.

 

Health reimbursement arrangement (HRA)
A tax-exempt account — funded and owned exclusively by an employer — that an employee can use to pay general health care expenses prior to using traditional health care coverage. Limited purpose HRAs for vision, dental, or preventive care benefits are permitted in combination with HSAs.

 

Health Savings Account (HSA)
An HSA is an account for saving money for current and future medical expenses. Owners receive a triple tax benefit by avoiding federal and state (in most states) income taxes on deposits, as long as funds are used for qualified medical expenses. The tax benefits include:

Tax savings on contributions; Tax-free earnings on the money kept in the account; and

Tax-free distribution of the funds when used for qualified medical expenses.

In order to establish an HSA and make tax-deductible contributions into it, the accountholder must be covered by a qualified high-deductible health plan.

 

High-Deductible Health Plan
An HDHP is a health benefit plan that typically offers lower premiums in exchange for higher annual deductibles when compared to traditional health plans.

To be an HSA-compatible or "qualified" HDHP, the plan must meet the requirements of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 for minimum deductibles and out-of-pocket maximums. High deductible plans may offer first-dollar coverage of preventive care and still remain qualified.

 

Health Maintenance Organization (HMO)
An enrollee in an HMO uses the doctors, hospitals and clinics that participate in their plan’s network. No benefits are paid for non-emergency benefits provided outside the HMO network. In addition, the enrollee selects a primary care physician who coordinates care and makes referrals to any necessary specialists.

 

Liability Coverage

One of the most important insurance protections in relation to your financial security.  In the face of ever increasing medical costs from bodily injuries, the possibility of a multiple car accident or the damage to expensive property, the minimum coverage limits required by law are not enough.  Choosing low liability limits is an unwise way to save on insurance.

 

Bodily injury liability occurs when you injure other people, e.g. pedestrians, passengers in vehicles, sports, while on vacation, at school, etc. When injury claims or lawsuits are brought against you, bodily injury liability coverage provides for your legal defense.  Also, if you are found legally liable by an investigation, or by a judge, this coverage pays the damages assessed against you up to the dollar limits of your policy.

 

Property damage liability is accidental damage to someone else's car, a telephone pole, light post or a building. Property damage coverage does not pay for the damage to your property, but pays up to your policy limits for the damaged property of others when a claims or lawsuit is filed against you.

 

Medical Payment Coverage

In regard to auto insurance, medical payment coverage pays for medical expenses no matter who's at fault, if you and/or the occupants in your car are injured.  It also protects you and relatives living in your household if injured in someone else's car, of if they are injured by a car as pedestrians.   All reasonable and necessary medical expenses are covered up to the amounts and within the time specified by your policy.

 

This coverage is valuable if you do not have health insurance because payment will be made while liability is being determined.

 

Medical savings account (MSA)
The precursor to HSAs, these are tax-exempt trust or custodial accounts in which accountholders can save money for future qualified medical expenses. MSAs were authorized as a limited program under HIPAA; no new MSAs may be opened, but current accountholders may keep their account and continue taking tax deductions for additional contributions, or roll their account into a Health Savings Account.

 

Out-of-Pocket Maximum
An out-of-pocket maximum caps, contains, or limits the dollar amount an insured must pay in coinsurance, deductibles and co-payments. After the out-of-pocket maximum is reachedpaid out by an insured in a given tax year, additional covered health care expenses are paid in full by the health plan.

 

Permitted Insurance
"Permitted insurance" that may be held while an individual contributes to an HSA includes insurance for a specified disease or illness, such as cancer, diabetes, asthma or congestive heart failure. Other examples of permitted insurances: policies that provide coverage for workers compensation, accidents, disability, dental care, vision care or long-term care.

 

Personal Injury

Wrongful conduct causing false arrest, invasion of privacy, libel, slander, defamation of character, and bodily injury. The injury is against the person in contrast to property damage or destruction.  Any violation of an individual's right, other than his or her rights in property.

The term personal injury is not confined to physical injuries, although negligence cases usually do involve bodily injuries.

 

Preferred Provider Organization (PPO)
A health care delivery arrangement that offers insured individuals access to participating providers at reduced costs. Traditionally, PPOs encourageincent enrollees to use providers in their network by offering lower deductibles and co-payments.

 

Preventive Care
Health care services intended to prevent a medical condition from occurring, or to detect the onset of a condition early so that it can be more effectively treated. Preventive care includes regular medical check-ups, screening tests, vaccinations, and the encouragement of a healthy lifestyle.

 

Professional Liability

Commonly called E&O or Errors and Ommisions insurance, is a policy that provides coverage for an individual in the event of unintentional mistakes.  Covers damages arising out of the insured's negligence, mistakes, or failure to take appropriate action in the performance of business or professional duties.

 

Property Damage Liability

Property damage liability is accidental damage to someone else's car, a telephone pole, light post or a building. Property damage coverage does not pay for the damage to your property, but pays up to your policy limits for the damaged property of others when a claims or lawsuit is filed against you.

 

Qualified Medical Expenses
Medical expenses permitted to count toward an individual satisfying their health plan deductible as defined in IRS Pub 502, available online at http://www.irs.gov.

 

Short-rate cancellation

Occurs when the policy is terminated prior to the expiration date at the policyholder's request. Charges apply for the early termination. So with a policyholder request of an early cancellation, he or she will lose a percentage of the unused full term premium.

 

SR 1

The SR 1 is the Traffic Accident Report that is filed with the Department of Motor Vehicles in California if:

• There was property damage of more than $750 or

• Anyone was injured (no matter how minor) or

• Anyone was killed.

 

SR 22

The SR 22 filing is proof of insurance that is filed with the Department of Motor Vehicles in California to re-instate a driver's license that has been suspended.

 

Tax-Free Contributions
When an enrollee participates in a payroll deduction program through their employer, deductions may be taken from payroll before calculating the enrollee’s taxable federal income, Social Security [FICA] and for most states, taxable state income. By taking deductions pre-tax, the enrollee reduces the dollars on which they are taxed, and, as a result, reduces their total tax bill.

 

Uninsured Motorist Coverage

When you are injured in an accident caused by an uninsured motorist or by a hit-and-run driver, while in your car or as pedestrians or even while riding in someone else's car, uninsured motorist coverage will pay for the bodily injury damages that you would normally recover from an insured driver.  In addition to your medical expenses and loss of earnings, this can also include damages for pain and suffering.  A hit-and-run driver is included in the definition of a uninsured motorist.

 

 

 

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