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Please read through our home insurance company
definitions so that you can make an informed decision.
Additional living expenses: If your
home is so damaged that you are unable to live there,
most policies pay for some additional living expenses
while repairs are being made. This could include limited
motel, restaurant, and warehouse storage expenses. Actual
cash value: The value of the property when it is damaged
or destroyed. This is usually figured by taking the
replacement cost and subtracting depreciation.
Adjuster: A person who seeks to determine
the amount of loss when an insurance claim is submitted
and attempts to settle the claim. All risk policy: Covers
the loss of property or damage that results from any
peril except those that are specifically excluded in
the contract.
Appraisal: A review of a property
claim to determine the value of a particular item, or
the value of the loss to damaged property.
Binder: A temporary or preliminary
agreement that provides coverage until a policy can
be written or delivered.
Broker: An insurance marketing specialist
who represents buyers of property and liability insurance
and who deals with either agents or companies in arranging
for the coverage required by the customer.
Claim: A request for reimbursement
for a loss covered by the policy. For example, a claim
for items stolen from the policyholder's home. Choose
a home insurance company that has a good track record
for paying claims.
Declarations page: The page attached
to the front of a homeowner's policy that includes
information such as the name and address of the insured,
the property insured, its location, the dates the policy
is effective, the amount of insurance coverage, the
deductible, and other related policy information.
Deductible: The amount the policyholder
must pay per claim or accident. Deductibles are fixed
amounts specified in the policy.
Depreciation: A decrease in the value
of property due to wear and tear or obsolescence. Each
home insurance company has differing policies regarding
this topic.
Endorsement: An attachment to an insurance
policy that amends and alters the coverage provided
in the policy.
Exclusions: Certain causes and conditions,
listed in the policy, that are not covered. Each home
insurance company has differing policies regarding this
issue.
Floater: Coverage for property that
moves from location to location either on a scheduled
or unscheduled basis. If the floater covers scheduled
property, coverage is listed for each item. If a floater
covers unscheduled property, all property is covered
for the same limits of insurance.
Insurance: A formal device for reducing
the chance of loss by transferring the risks of several
individual entities to initial companies.
Liability coverage: Insurance covering
injuries to another person or damage to another person's
property for which the insured is legally liable.
Market value: A real estate term that
describes what the current value of your home would
be if you were to sell it—including the price
of the land. This amount generally is not involved in
determining what amount to purchase under a homeowner's
policy.
Medical payments: Regardless of who
is "at-fault," this coverage pays for medical
expenses of persons accidentally injured on your property
by a member of your family or by your pets. Medical
payments coverage does not apply to your injuries or
those of anyone living with you or to activities involving
your business. Each home insurance company plan varies
and some may not offer this option.
Named peril or specified peril: This
is a peril indicated or identified in the contract as
a cause of loss for which insurance is being provided.
Under such contracts if a peril is not named or specified
it is not covered.
Peril: An event that causes damage
to your property such as fire, theft, tornado, smoke,
etc. Be sure your home insurance company plan covers
these important areas.
Personal liability: This coverage
protects you against a claim or lawsuit resulting from
bodily injury or property damage to others. The coverage
applies to you and all family members who live with
you.
Premium: The amount of money charged
for your insurance.
Property coverage: Insurance providing
protection against the loss or damage to real and personal
property caused by specified perils covered in your
insurance policy or contract. Each home insurance company
plan varies and some may not offer this option.
Replacement cost coverage: Replacement
cost is what it would cost to completely replace your
house or any part of it.
Replacement cost on contents: This
additional coverage pays for your losses on the basis
of how much it would cost to replace or repair the item
at current costs without deduction for depreciation.
If the item is not replaced or repaired, only the actual
cash value is payable.
Risk: This word has two meanings for
insurers: (1) the chance of loss such as from a peril;
and (2) the person or entity that is insured by a policy.
Each home insurance company plan varies and some policies
may have different risk assessment.
Umbrella liability: A form of insurance
protection against losses in excess of the amount covered
by other liability insurance policies; also protects
the insured in many situations not covered by the usual
liability policies.
Underwriting: The process by which
an insurance company selects and classifies risks according
to their degree of insurability.
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