When we were little, we learned quickly which words were not okay to say. Use one of those “four-letter” words and mom would throw you a disapproving look so quickly!

Similarly, to the cuss words we learned when we were little, there are phrases in the insurance industry that when used will cause some disapproving looks… we will call these insurance cuss words.

Insurance cuss words are those that misrepresent what the coverage actually protects. Examples of these include:

  • Blanket Additional Insured
  • All Risk
  • Full Coverage

Blanket Additional Insured. Typically, we hear this when discussing a situation in which an insured client can extend their coverage to third parties without having to specifically name or request additional insured status for them. The reason this becomes a cuss word is that there is no such thing as a blanket additional insured endorsement. There are “Automatic” additional insured endorsements, but no “blanket” endorsement. The difference is connotation. The word “Blanket” gives the idea that everyone is covered as an additional insured, whereas the word “automatic” says that additional insured status is granted when specific conditions are met.

All Risk. Typically, we hear this referring to a type of insurance coverage that automatically covers any and all risks that are not explicitly omitted. The reason this becomes a cuss word is that this term is often misunderstood. For example:

You purchased coverage for your home and your agent says it was an all-risk policy. Your home floods and you file a claim expecting the insurance to cover it. However, your coverage excludes flood damage, and the insurance doesn’t cover your loss.

In this case, the term “all-risk” created a miscommunication where you expected something to be covered that wasn’t. Similar issues occur regularly when this insurance cuss word is used.

Full Coverage. Typically, we hear this referring to an auto policy and it usually implies complete or total coverage of the vehicle and liability. The reason this becomes a cuss word is that “full coverage” doesn’t really exist. To those who work in the insurance world, “full coverage” often means that an auto policy includes liability, medical payment, collision, comprehensive, and maybe even uninsured and/or uninsured/underinsured coverage. The problem is that because there are limits, deductibles, exclusions, and conditions, the insured will never have “full coverage.”

Insurance cuss words like these often misrepresent the coverage of a policy and causes misunderstandings. When discussing insurance, try to avoid these phrases. If you hear your agent, use them, ask for clarification of the coverage.

Here at Gannon Associates Insurance, our agents take the time to walk you through your coverage needs and will explain any part of your policy to you if you need. If you have questions about your policy or would like to discuss your unique insurance needs give us a call at 877-GANNONS today!

Source: Chris Boggs: The Big I, https://www.iamagazine.com/viewpoints/3-insurance-cuss-words-to-avoid