Actual Cash Value The fair or reasonable cash price for which the property could be sold in the market in the ordinary course of business, and not a forced sale.
Admitted Company An insurance company authorized and licensed to do business in a given state.
Agent A person who represents the company and sells insurance on a commission basis.
Appraisal Determination of the value of property, or the extent of damage, usually by impartial experts. Provided for by a clause in some types of insurance contracts.
Assessment An amount of money you are required to pay, usually to repair damage to property in which you have a communal interest.
Assets The items on the balance sheet of the insurer which show the book value of property owned.
Basic Limits Certain minimum amounts of liability to be covered by insurance. Is is customary to quote premiums in terms of these minimum amounts.
Binder A temporary insurance policy that expires at the end of a specific time period or when the permanent policy is written.
Cancellation Termination of an insurance contract before the end of the policy period, by the insured or insurer, usually in accordance with provisions in the contract.
Claim Your formal demand to be reimbursed for losses covered by your insurance policy.
Conditions The provisions of an insurance policy stating the rights and obligations of both parties in the contract..
Coverage Coverage is another word for insurance.
Declaration Page That portion of the insurance contract that contains such information as: name and address of the insured, description of the property, coverage and premium amounts.
Deductible A certain dollar amount, specified in some property insurance policies, beyond which insurance protection begins. The insured assumes the loss up to the limit of the deductible amount; then the company pays any loss over that amount.
Depreciation A decrease in the value of any type of tangible property over a period of time resulting from use, wear and tear, or obsolescence.
Effective Date The starting date of the policy; the time at which the insurance protection begins.
Endorsement An amendment in writing ( including printing or stamping) added to and made part of the insurance contract for the purpose of changing the original terms - either to restrict or expand coverage.
Independent Agent Independent Insurance Agents are not affiliated with one particular company, but may choose from any number of different insurance companies in order to provide you with the best insurance coverage.
Incurred Losses The losses occurring within a fixed period, whether or not adjusted or paid during the same period. As an example, in Workers' Compensation claims, losses occur during a given policy period, but benefits may continue to be paid for many years. The estimated value of the total claim would be an incurred loss for the policy period during which the loss occurred.
Insured An insured is a person ( or an institution) covered by an insurance policy.
Insurer Another term for an insurance company. Insurance companies are also known as carriers.
Liability A coverage for property damage or bodily injury arising from personal actions, the operation of a business, or the actions of employees.
Limit The maximum amount a policy will pay for a covered loss.
Loss A loss is the basis for an insurance claim.
Medical Expenses Medical expenses are reasonable charges for medical, surgical, x-ray, dental, ambulance, hospital, professional nursing, and prosthetic devices.
Mortgagee The party loaning money toward the purchase of personal property. Most commonly, a bank or other lending institution.
Named Perils Named perils are the specific dangers a policy insures you against, such as fire, windstorm, and hail in a homeowner's policy. These perils are named or listed in the policy.
Negligence The failure to use the degree of care that is required by law to protect others from harm.
No-Fault Insurance If you are involved in an auto accident, your insurance company pays you, your passengers or a pedestrian injured by your car for financial losses like medical expenses and lost wages due to the accident, regardless of who is at fault.
Nonadmitted Assets Assets that do not qualify under state law for insurance statement purposes.
Nonrenewal A decision made by the insurance company not to extend coverage for another policy period after the current policy period expires.
Occurrence An accident, including continuous or repeated exposure to substantially the same general harmful conditions.
Partial Loss A loss which does not completely destroy the insured's property or render it worthless.
Peril A specific risk covered by an insurance policy, such as fire, flood, hail, theft, or windstorm. A homeowner's policy is often called a multi-peril policy because it covers you against many specific risks.
Premium An amount of money paid to an insurance company in return for insurance protection.
Policy A policy is a contract that sets forth the rights and obligations of both a policyholder and an insurance company.
Policyholder A policyholder is a person who pays a premium to an insurance company in exchange for the protection detailed in an insurance policy.
Premium Notice A form notice from an insurer or agency to a policyholder that a premium will be due on a given date.
Reinsurance A transaction wherein the reinsurer, for a consideration, agrees to assume an agreed upon portion of the financial loss exposure from the ceding company.
Renewal A renewal is a new policy or a standard certificate from an insurance company, stating that the conditions of your old policy will stay in effect.
Replacement Value Replacement value is the amount of money you would need to rebuild your house or replace any of your belongings that have been damaged, destroyed, or stolen, at current price levels.
Reserve An amount representing actual or potential liabilities by an insurer to cover debts to policyholders. or an amount allocated for a special purpose.
Risk From your point of view, risk is the chance of injury, damage or loss. Insurance companies sometimes refer to their policyholders as risk-as in, "Because of her good driving record, she's a good risk."
Schedule A list of items covered by an insurance policy with their descriptions and values.
Stated Amount Insurance Insurance written to cover an item of property for a specific amount of insurance.
Stock Company A form of insurance company with the following characteristics: 1) The company is owned by the stockholders, 2) Dividends are returned to the stockholders, 3) Stockholders elect the management of the company, 4) A policyholder does not need to be a stockholder to purchase insurance.
Term The period of time for which a policy is issued.
Umbrella Coverage Insurance coverage which takes over where regular coverage leaves off. It provides an extra layer of liability coverage against catastrophic loss.
Underwriter Individuals or corporations who insure. More commonly, the officials of an insurance company whose duty it is to scrutinize risks offered for insurance and decide upon their acceptability.
Uninsured An individual deciding to personally assume all losses. Does not have insurance protection.
Workers' Compensation Coverage required by State law against compensation to workers who are injured on the job, regardless of whether or not the employer has been negligent.