Insurance is supposed to give you peace of mind—but sometimes, the language in your policy feels more like a puzzle than a promise. Let’s break down some of the most misunderstood terms so you know exactly what you're paying for—and what to expect if you ever need to file a claim.
What it sounds like: Something technical.
What it really is: The amount you pay out of pocket before your insurance kicks in.
Example: If you have a $500 deductible and a $2,000 claim, you pay $500, and your insurance covers the remaining $1,500.
Tip: Higher deductibles often mean lower monthly premiums—but you’ll pay more upfront in the event of a claim.
What it sounds like: “Covers everything.”
What it really is: Protection for non-collision damage to your vehicle—like theft, hail, vandalism, falling trees, or hitting a deer.
It doesn’t cover: Accidents involving other vehicles. That’s where collision coverage comes in.
Think of it as: Everything that can damage your car except hitting another car.
What it sounds like: The real worth of your item.
What it really is: What your item is worth today, factoring in depreciation.
Example: If your 5-year-old couch is stolen, you won’t get what you paid for it—you’ll get what it’s worth now.
Downside: You might not get enough to fully replace it with a new one.
What it sounds like: The cost to buy something again.
What it really is: The amount it would take to replace your lost or damaged item with a new one, without subtracting for depreciation.
Key Difference from ACV:
Example: If your roof is damaged in a storm:
Knowing the difference between these terms isn’t just helpful—it can make a big difference in how much you get paid after a claim and how much you'll need to pay yourself.
If you're unsure what your policy includes, or if you want help customizing coverage that actually fits your life, we're here to help. At Sea Mountain Insurance, we break down the fine print so you can feel confident and covered—every step of the way.
Got questions? Reach out today or schedule a policy review.
