Glossary of homeowners insurance terms
Actual Cash Value (ACV) – Is the dollar amount a buyer is willing to pay a seller who is willing to accept without undue pressure. FMV: It is also an estimate or appraisal based on comparisons with other similar structures.
Actuary: An insurance professional trained in risk assessment and pricing policies. The actuary creates the methodology that determines the rates.
Additional Living Expenses: Covers additional living expenses when incurred due to a loss.
Adjuster: A person employed by the insurance company to assess the loss and settle the claims of the insured. Independent Adjusters – Independent contractors who work for different insurance companies.
Appraisal: A survey to estimate the insurable value of a property or the amount of a loss.
Agent: A person who is licensed, trained and authorized to represent an insurance company to interested buyers and to be their representative.
Arbitration: The insurance company and the insured agree on a procedure to resolve a dispute by accepting the decision made by a third party.
Binder: A short-term agreement that provides temporary insurance coverage until the policy can be issued.
Broker – A licensed person who transacts insurance on your behalf.
Claim: Notice to an insurance company by a policyholder that a loss has occurred that may be covered under the terms of the policy
Declarations: The first page of a policy that contains the legal name of the insurance company, its name and address, and policy number. You can also print the effective and expiration dates, premium amount, and deductibles.
Deductible: The portion of the total loss for which the policyholder is responsible before the insurance company is required to pay.
Depreciation: A decrease in value due to age, wear, or obsolescence.
Endorsement: A written agreement that changes the terms of an insurance policy.
Exclusion: A provision in an insurance policy that denies or restricts coverage for something specific.
Medical Expenses: Medical coverage per person and per accident for injuries caused on your premises to a person other than the insured. Personal Responsibility: See Medical Expenses.
Mobile Homes: This coverage is considered residential if the mobile home is an established permanent residence.
Premium: The insurance price paid to the insurance company for a policy.
Quote: An estimate of the cost of the insurance.
Replacement Cost Coverage: Provides money to repair or replace the damaged property with a new property of the same type, without deductions for depreciation. Replacement cost policies cover the full cost of replacing the damage to your home up to your policy limits.
* Extended replacement cost coverage that will provide a certain percentage over the policy limit to rebuild. When construction costs rise, you’ll have some extra money to cover the bill.
* Guaranteed Replacement Cost This policy pays whatever it costs to rebuild your home as it was before the disaster, regardless of the increase in value.
Howard Bell for yourpropertypath.com