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Home Owners Insurance - Use Of Terms Actual Cash Value (ACV) -Generally, actual cash value means fair market value. The insurance will pay damages equal to the replacement value of damaged property minus depreciation. Coverage for actual value policies are limited to a specific amount Actuary - An insurance professional trained to evaluate company reserves and to analyze the company's financial risks to determine premium rates. Additional Living Expense: This means that the policy covers the necessary living expenses up to the limits of the policy, when the insured cannot live in the home. Adjuster - An employee of a property/casualty insurer whose job is to evaluate losses and settle claims. Public adjusters: They negotiate with insurers on behalf of policyholders. Public adjusters are independent contractors. Appraisal:A professional survey to determine a property's insurable or fair market value. Agent: A licensed individual authorized to sell and to provide service to the insurance holder and the insurance company. Arbitration: A legal procedure in which an insurance company and the insured agree to settle a claim dispute using an unbiased third party.It is legal and binding. Binder: A short-term agreement that provides temporary insurance coverage until the policy can be issued or delivered. Broker: A licensed individual or insurance agency that transacts insurance on your behalf. Claim: A form filed with your insurance company notifying them of damages or losses that may be covered under the terms and conditions of the policy. Declarations: Usually the first page of an insurance policy that contains the legal name of your insurance company, the policy number, your name, location and a description of the insured property, effective and expiration dates, premiums due, the limits of insurance, and deductibles. Deductible: It is the cost of damages or loss that is the responsibility of the policy holder. Beyond that,benefits are paid by the insurance company. Depreciation: A loss of value due to age, wear and tear, or obsolescence. Endorsement: A written agreement added onto an existing insurance policy that changes the terms and conditions of the coverage. Exclusion: A provision in an insurance policy that denies or restricts coverage for certain perils, persons or property. Some policies will not cover for floods in certain parts of the country, as an example. Insured: The policyholder who is entitled to covered benefits in case of an accident or loss. Insurer: The insurance company that issues the insurance policy, and agrees to pay for losses and covered benefits. Medical Expense: Coverage is limited to a per person, per accident amount for injuries occurring on your premises to persons other than those insured. Or away from your insured property if caused by you, family or your pets, regardless of legal liability. Mobile Homes: This coverage is considered residential if the mobile home is established as a permanent residence, often defined as one on a permanent foundation. Premium: The price of insurance paid to the insurance company for a policy. Personal Liability: Coverage is limited to a per person, per accident amount for injuries occurring on your premises to persons other than those insured. Or away from your insured property if caused by you, family or your pets, regardless of legal liability. Quote: An estimate of the cost of insurance based on information supplied by you or an agent. Replacement Cost: The amount that it costs to replace lost or damaged property with new property of similar and like kind. Replacement Cost Coverage: Provides money to repair or replace damaged property of like kind and quality, without reduction for normal wear and tear (depreciation). Replacement cost: Policies that cover the full cost of replacing the damage to your home up to your policy limits. For example, a replacement cost policy with a $100,000 coverage limit would cover the cost of replacing a $100,000 house. Home appreciation or depreciation is not a consideration. Extended (or Modified) Replacement Cost: Coverage that will provide a certain percentage over the policy limit to rebuild your home. This provision factors in increases in cost of materials and labor. Guaranteed Replacement Cost: This policy pays out whatever it costs to rebuild your home as it was before the disaster--well over the policy limit if necessary.
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