Homeowners Insurance

Homeowners Insurance terms

1. Actual cash value An amount equivalent to the replacement cost of lost or damaged property at the time of the loss, less depreciation.
2. Actual Cash Value (ACV) (ACV) The value of your property, based on the current cost to replace it minus depreciation.
3. Additional Living Expenses Pays expenses over and above your normal living costs (motel rooms, restaurant meals, and laundry service) while your home is being repaired or rebuilt…
4. Additional living expenses (ALE) (ALE) Reimburses the policyholder for the cost of temporary housing, food, and other essential living expenses, if the home is damaged by a covered peril that…
5. Adjuster A person who investigates and settles losses for an insurance carrier.
6. Agency A firm that solicits insurance for one or more insurance carriers. It also may issue policies and adjust losses.
7. Agent Agent means any individual, other than a broker-dealer, who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales…
8. Application Under the Equal Credit Opportunity Act (ECOA), an oral or written request for an extension of credit that is made in accordance with the procedures…
9. Appraisal The act of evaluating and setting the value of a specific piece of personal or real property.
10. Arbitration The process in which a third-party arbiter examines facts presented by both you and the insurance company when you disagree about a settlement offer.
11. Binder A temporary or preliminary agreement, in effect for less than 60 days, that provides coverage until a policy can be written or delivered.
12. Broker An agent who handles the public's orders to buy and sell securities, commodities or other property. A commission is generally charged for this service.
13. Builders Risk Coverage for a home under construction. Claim payments are based on the percentage completed at time of loss.
14. Cancellation Termination of a policy before its normal expiration date.
15. Claim Your request for the insurance company to pay you an amount under the terms of your policy.
16. Claimant A person who makes an insurance claim.
17. Claims Adjuster A person an insurance company hires to settle claims. The adjuster can be a company employee or an independent party under contract with the company.
18. Coinsurance Clause An agreement with the insurance company in which you agree to carry insurance on your property in an amount equal to a certain percentage of its actual…
19. Company profile A summary of information about an insurance company, including its license status, financial data, complaint history, and a history of regulatory action.
20. Complaint A written communication primarily expressing a grievance against an insurance company or agent.
21. Complaint history Information collected or maintained by the Texas Department of Insurance relating to the number of complaints received against a particular insurer, agent…
22. Conditions Part of an insurance policy that states your obligations and those of your insurance company.
23. Contract In most cases, the term "contract" refers to an insurance policy. A policy is considered to be a contract between the insurance company and the…
24. Covered Expenses The losses or conditions that the policy will pay for.
25. Debris removal Coverage for the cost of removing debris resulting from damage caused by an insured peril.
26. Declarations page The page your company sends as part of the policy which shows the terms, coverage limits, premium and endorsements.
27. Deductible The dollar amount you must pay out-of-pocket for each claim before the insurance company begins paying.
28. Depreciation The act of lowering an item´s value due to use or wear and tear.
29. Dwelling An insured's home.
30. Earned premium The portion of a policy premium that has been used to actually buy coverage, or that the insurance company has "earned.
31. Earthquake Insurance A type of catastrophic coverage available for an additional premium to repair or replace your property/personal belongings when damaged by an earthquake.
32. Effective Date The date on which an insurance policy becomes effective.
33. Endorsement Amendment to the policy used to add, change, or delete coverage. Also referred to as a “rider.”
34. Escrow A financial instrument held by a third party on behalf of the other two parties in a transaction.
35. Exclusion A contractual provision in an insurance policy that denies or restricts coverage for certain perils, persons, property or locations.
36. Exclusions Specific situations or circumstances listed in your policy describing when benefits will not be paid.
37. Expiration date The date on which an insurance policy expires.
38. File and Use Residential property rates utilize a system called “file and use.” Under this system, insurance companies file their rates with the Texas Department…
39. First-party claim A claim filed by an insured against his or her own insurance policy.
40. Floater Additional coverage for personal property such as jewelry, artwork, or antiques not otherwise included in the homeowners policy, or included for a nominal…
41. Flood Insurance Flood insurance protects against water from an overflowing river or a hurricane's tidal surge and also covers damage from water that builds up during…
42. Full Replacement Policy A homeowner's policy that pays the full replacement cost, up to the policy maximum, to repair or restore damaged property.
43. Grace Period A time period after the due date that you may pay a premium without penalty. The policy remains in force during this time.
44. Group of companies Several insurance companies under common ownership and often common management.
45. Guaranteed Replacement Cost Coverage Endorsement that lets you replace your home without subtracting for depreciation, even if it costs more than the policy limit.
46. HO Forms Homeowners insurance polices are sometimes referred to by the kind of form used and the specific perils they cover.
47. Home Inventory A detailed list of personal possessions and any information, including pictures or videos, that could help identify lost or destroyed items.
48. Independent adjuster A person who charges a fee to an insurance company to adjust the company’s claim.
49. Inflation guard endorsement An endorsement to a homeowner policy that automatically increases the amount of insurance every three months.
50. Inflation protection Automatically adjusts your home insurance policy limits to account for increases in the costs to repair or rebuild a property.
51. Inspection Report A report filed by an individual employed by the insurance company or credit agency, giving general information on the physical condition of the property.
52. Insurable interest Any financial interest a person has in the property or person insured. In life insurance, a person´s or party´s interest - financial or emotional - in…
53. Insurance to value An amount of insurance at, or close to, the value of the property insured.
54. Insured The policyholder or person(s) protected in case of a loss/claim.
55. Insurer The insurance company.
56. Justified complaint A complaint that exposes an apparent violation of a policy provision, contract provision, rule, or statute; or which indicates a practice or service that…
57. Lapse Termination of a policy due to non-payment of premiums.
58. Lapsed Policy A policy that has terminated for non-payment of premiums.
59. Liability A legally enforceable financial obligation caused by negligence.
60. Liability Coverage Insurance protection that pays for claims or judgments brought against the insured.
61. Liability insurance Insurance that pays when you are liable for injuries to other persons or damage to their property.
62. Loss The amount an insurance company pays on a claim.
63. Loss history Refers to the number of insurance claims previously filed by a policyholder. A company will consider loss history when underwriting a new policy or…
64. Loss of use A provision in homeowners and renters insurance policies that reimburses policyholders for the additional costs (housing, food, and other essentials) of…
65. Market Value The price that the market - any market - sets at a particular time as the price at which an asset can be bought or sold.
66. Material misrepresentation A significant misstatement in an application form. If a company had access to the correct information at the time of application, the company might not…
67. Named perils Specific events covered by a policy, such as fire, windstorm, and theft.
68. Negligence Failure to exercise a generally acceptable level of care and caution resulting in injury or damage to a third party.
69. Non-Bound Application There is no coverage involved and you pay no money. The insurance agent submits the application to the company to find out whether or not you will be…
70. Non-renewal A notice of the insurance company’s refusal to renew your policy prior to the end of the policy term.
71. North Dakota Insurance Guaranty Fund A fund that pays an insurer's claims when the company is insolvent. All North Dakota licensed automobile insurance companies belong to the North Dakota…
72. Occurrence An event that results in an insured loss.
73. Peril A specific risk or cause of loss covered by an insurance policy, such as a fire, windstorm, flood, or theft.
74. Personal property All tangible property (other than land) that is either temporary or movable in some way, such as furniture, jewelry, electronics, etc.
75. Policy The contract form issued by the company to explain the coverage provided. It is a legal document.
76. Policy owner The person or party who owns an individual insurance policy. This person may be the insured, the beneficiary, or another person.
77. Policy period The amount of time an insurance contract or policy provides coverage.
78. Premium The price charged for insurance.
79. Private Mortgage Insurance (PMI) (PMI) Insurance offered by a private insurance company that protects the bank against loss on a defaulted mortgage up to the limit of the policy (usually 20 to…
80. Pro rata cancellation Revocation of a policy by an insurance company that returns to the policyholder the unearned premium.
81. Proof of loss Documents that you give the insurer to support your request for payment of losses.
82. Property damage Physical damage to property.
83. Public Adjuster A person you can hire to help settle a claim with an insurance company. A public adjuster may be hired to handle a complex or difficult loss negotiation.
84. Public insurance adjuster An individual employed by a policyholder to negotiate a claim with the insurance company in exchange for a percentage of the claim settlement.
85. Real property A dwelling or home is often referred to as real property.
86. Refund An amount paid back because of an overpayment or because of the return of an item previously sold.
87. Reinstatement The process by which a life insurance company puts a policy back in force after it lapsed because of nonpayment of renewal premiums.
88. Renewal A form of extending an unpaid loan in which the borrower's remaining unpaid loan balance is carried over (renewed) into a new loan at the beginning of the…
89. Renters insurance A form of insurance that covers a policyholder’s belongings against perils. It also provides personal liability coverage and additional living expenses.
90. Replacement Cost Pays the dollar amount needed to replace the structure or damaged personal property without deducting for depreciation but limited by the policy’s…
91. Residual market Insurers, such as assigned risk plans and the Texas FAIR Plan, that exist to provide coverage for those who cannot get it in the standard market.
92. Return premium The premium returned to an insured for canceling or amending a policy.
93. Rider A written agreement attached to the policy expanding or limiting the benefits otherwise payable under the policy. Same as an "endorsement."
94. Scheduled items Articles such as jewelry, furs, stamps, coins, guns, computers, antiques, and other items that may exceed normal policy limits in your regular homeowner…
95. Settlement After negotiating, the amount you agree to accept from the insurance company as full payment for your loss.
96. Sewer Back-up and Sump Pump Overflow Coverage Coverage available for an additional premium to your homeowners insurance policy that pays for damage caused by sump pump failure or sewer back-up.
97. Short rate cancellation Cancellation by the insured of an insurance policy for which the returned unearned premium is diminished by administration costs incurred when the…
98. Single interest insurance Insurance coverage for only one of the parties having an insurable interest in that property.
99. Staff adjuster Employee of the insurance company’s claims department.
100. Surcharge An extra charge applied to the premium by an insurance company, usually applied as a result of at-fault accidents or moving violations.