Actual Cash Value: Cost to repair or replace property, taking into consideration age and its condition when it was lost or damaged. (Equal to replacement cost minus depreciation.)
Agent: An insurance salesperson.
An independent agent does not work for any insurance company and sells the more than one insurer;
An exclusive agent sells policies of only one insurance company.
Claim: A person's request for payment by an insurer for a loss covered by a policy. Your claims to your company are "first-party claims." Claims made by one person against another person's company are known as "third-party claims."
Conditions: Part of an insurance policy which states your obligations and those of your insurance company in order for the policy to be in effect.
Deductable: The amount which you agree to pay, out of pocket per claim or per accident. This is subtracted from the total amount paid by your insurer. If the claim is $500 and your deductible is $100, you pay $100 and your company will pay $400.
Depreciation: Reduction in the value of property due to age and use.
Domestic Partners: A term used in some states, such as California, to describe an unmarried couple living together.
Endorsement: Attached to policy which adds to or changes the contract's original terms.
Floater: Additional coverage for items not otherwise included in the basic policy (such as jewelry or antiques).
Insurance Department: Enforces rules for the insurance business in each state. Valuable source of information about all types of insurance; also handles consumer inquiries and complaints.
Insurance Company: A company, which in exchange for a fee (known as a premium), agrees to pay all legitimate claims that may arise under your policy.
Inventory: A list of your possessions and their value. Items on the inventory should include furniture, rugs, drapes, artwork, china, appliances, books, clothes, jewelry, compact discs, records, tapes, linens, and musical instruments.
Liability: A legally enforceable financial obligation.
Liability Coverage: Insurance which pays the losses of other people to whom you unintentionally or through negligence cause injury.
Bodily injury liability coverage pays meducal costs of others and your legal defense costs of if you injure or kill someone;
Property damage liability coverage pays claims against you if you damage someone else's property.
Negligence: Failure to exercise a generally acceptable level of care and caution.
Peril: Cause of loss. (Examples: fire, theft.)
Personal Property Insurance: Protects against the loss of, or damage to, possesssions caused by specific perils.
Policy Period: The amount of time an insurance contract (policy) lasts.
Premium: The amount you pay for insurance coverage.
Policyholder: The person who buys insurance.
Proof of Loss: Documents that you give to the insurer to support your request for payment of a claim. The company uses these documents to detremine whether and how much it will pay. (Examples: written repair estimates, police reports.)
Replacement Costs: Cost to replace property without regard to age or condition of the original item.
Theft Limit: The highest amount an insurance company will pay on certain items that are stolen from your home. For instance, some policies have a $5,000 limit for computers. If an item would cost more than the limit to replace, you may need to purchase supplementary coverage.
