Home Insurance
A Home Owner Policy does not cover FLOOD damage. A separate Flood insurance Policy must be in force to provide this protection.
Special policies maybe available for Earthquake Insurance, Hurricane Insurance and High Wind Insurance and may require high deductibles.
Higher deductibles may provide lower premium, however, it is not advised to select a deductible that may not be affordable at a time of loss.
Acceleration Clause: part of a contract, also used in loan financing in which a loan is declared due and payable.
Act of God: An unpreventable event or accident that is a result of natural causes such as lighting, tornadoes or floods.
Actual Cash Value (ACV): the replacement cost of damaged, lost or destroyed property determined by using the cost of “new” minus depreciation. Ex: The actual cash value of an 8 year old TV is the new TV cost minus 8 years of depreciation.
Actuary: as applied to insurance, a specialist who with the use of gathered data calculates rates, reserves, dividends and other statistics.
Adjustable Rate Loan: a home loan with an interest rate that can change based on changes in a specified published index.
Adjuster: A representative of the insurance company whose main objective is to fairly determine the extent of the insurance company’s loss for a submitted claim; also, Insurance Adjuster.
Agent: a licensed professional who solicits, sells and services insurance policies.
Applicant: this is the person who is actually applying for a Home Owner’s Insurance policy
Application: typically signed by the policy holder, this is a written statement that provides the details of the policy being applied for.
Appraisal: the estimated value of damages to property for which a claim is filed; also, a determination of a home’s value
Basic Limits: the minimum coverage allowed by law or by underwriting standards.
Cancellation of Policy: a home insurance policy can be cancelled by the insured or the insurance company for reason stated within the policy or reasons stated under the law of the residing state; a termination of coverage.
Claim: a request to be indemnified or reimbursed under a home insurance policy for an incurred loss by a covered peril.
Catastrophe: a sudden and unexpected circumstance that causes a severe or total loss.
Coinsurance: a home owner’s insurance policy requires the home owner to carry enough insurance to meet a specified percentage of the property’s replacement value to receive full payment in the event of a loss. If the coinsurance is not met, and the home is not properly insured, a home owner may not be paid in full for the entire loss being claimed.
Conditions: as stated in the policy, these provisions include the rights, duties and responsibilities of the insurer and the insured.
Coverage: the limits of protection provided for in an insurance policy. Coverage is typically listed in the Declaration Pages and among other details name the individuals insured, dollar limits of coverage, perils covered against and specific properties covered.
Deductible: the amount of self insured risk the home owner accepts; when filing a claim, this is the portion of the loss the home owner pays.
Damages: the amount of compensation awarded to the party who has experienced a loss.
Depreciation: the decrease in value of property due to age, wear and tear and obsolescence.
Earthquake Insurance: a home owner policy may be endorsed to cover loss by earthquakes; a separate earthquake deductible may apply.
Effective Date: the day coverage is in force on your home owner’s policy
Endorsement: an additional coverage added to a home owner’s policy to increase coverage; also used to increased coverage limits on specified property such as other structures, jewelry, or equipment.
Exclusions: any item, condition, person, property, specified peril or loss not covered by the home owner’s policy.
Fire Insurance: a limited policy or part of a policy that insures against the loss of fire by causes defined in the policy.
Flood Insurance: home owner’s insurance does not protect against floods or rising waters. A separate Flood insurance policy must be purchased.
General Liability Insurance: Liability insurance designed for business owners to protect them from the liability exposure of operating their business. Exposures can be form general operations completed, premises and products sold.
Grace Period: The time allowed to pay unpaid insurance premiums after the premium due date in which the insurance company still honors the policy as “In Force”. The premium is considered to be paid on time if paid during the grace period.
Hazard: a condition that increase the likelihood, extent or severity of a loss.
Home Owner’s Insurance Policy: a package policy that includes dwelling coverage, personal property coverage and liability coverage for the home owner.
Hurricane Insurance: a home owner policy may be endorsed to cover loss by hurricanes; a separate deductible may apply.
Indemnity: Restoring an insured person to the same or similar conditions as the insured was prior to a loss, by repair, replacement or payment.
Independent Agent or Producer: usually represents more than one insurer.
Inflation Protection: automatic increases in policy coverage to help keep consistent with the inflated cost of replacement of the property insured.
Insurable Interest: one must be subject to financial loss under unexpected circumstance, in order to be of insurable interest.
Insurance Attorney: an attorney who specializes in insurance related cases or practice.
Insured: the individual or entity being protected by the insurance policy.
Insurer: the insurance company.
Lapse of Coverage: a time period when insurance premiums have not been paid and insurance in no longer in force.
Liability Insurance: most home owner policies offer some liability protection for the home owner to cover acts of negligence or other related situations.
Loss of Use: coverage in a home owner policy that compensates for the loss of us of your property under a covered peril.
Mobile Home Insurance: a specifically designed policy for mobile homes
Mortgage Insurance Protection: a policy generally designed to pay off a mortgage in the event of an unexpected death of the mortgagee.
Mutual Insurance Company: an insurance company owned by its policy holders.
Named Perils: circumstances of loss specifically named in a home owner policy.
NAIC (National Association of insurance Commissioners): Association of state insurance commissioners whose primary purpose is to promote uniform insurance regulation.
Non-Renewal: the decision of the insurance company not to continue insurance once the initial policy expires.
Personal Lines of Insurance: insurance sold on an individual or family basis such as home, auto, life and health insurance.
Premium: the cost of insurance
Renewal: to keep a policy in force without lapse, most home owner policies have automatic renewal which is the automatic re-establishment of the policy.
Replacement Cost: the estimated cost of full replacement, considering current construction prices, to completely replace the property being insured against in the event of a total loss; replacement cost coverage.
Stock Company: an insurance company owned by its stock holders.
Subrogation: a stated right of the insurer to attempt to recoup losses paid by pursuing remedies for damages against a third party
Total Loss: a complete loss of property use
Umbrella Policy: a policy that provides additional limits of coverage for all underlying policies such as an underlying auto or home policy.
Underwriter: an individual who works for the insurer, who is trained in evaluating risks and determining coverage allowed within the insurer’s underwriting guidelines.
