Glossary of Common Insurance Terms:
Actual Cost Value (ACV): A form of insurance that pays damages equal to the replacement value of damaged property minus depreciation.
Adjuster: An individual employed by a property/casualty insurer to evaluate losses and settle policyholder claims. These adjusters differ from public adjusters, who negotiate with insurers on behalf of policyholders, and receive a portion of a claims settlement. Independent adjusters are independent contractors who adjust claims for different insurance companies.
Agent: Insurance is sold by two types of agents: independent agents, who are self-employed, represent several insurance companies and are paid on commission; and exclusive or captive agents, who represent only one insurance company and are either salaried or work on commission. Insurance companies that use exclusive or captive agents are called direct writers.
Catastrophe: An event that causes extremely large losses or a large number of losses in the same area.
Claim: An amount requested by a policyholder or third party from an insurance company for losses covered by an insurance policy.
Claim Number: A group of numbers and/or letters that distinguishes your claim from others.
Deductible: The amount of loss paid by the policyholder. Either a specified dollar amount, a percentage of the claim amount, or a specified amount of time that must elapse before benefits are paid. The bigger the deductible, the lower the premium charged for the same coverage.
Depreciation: The decrease of the property's value due to age, life expectancy, wear and tear (condition), and obsolescence, which may be recoverable upon replacement, if applicable to your policy.
Dwelling: A place of residence such as a house or condominium.
Homeowners Insurance: A typical homeowners insurance policy covers the owner, the house, the garage and other structures on the property, as well as some of the insureds personal possessions against a wide variety of perils such as windstorms, fire and theft.
Insured: The person(s) or party(ies) who are insured or protected by an insurance policy.
Insurer: The company who provides the insurance coverage and services on a specific policy.
Lien: A creditors claim against owners assets to secure an unpaid debt. Liens may also be decided by courts to satisfy judgment.
Lienholder: The party who has a claim upon real or personal property until the satisfaction of some debt or duty.
Loss: Direct and accidental damage to the insured automobile or property used as the basis for filing a claim.
Loss Assessment: This coverage provides reimbursement for extra fees assessed by a condominium or homeowner association. It is subject to the limit on the policy declaration page and a deductible.
Market Value: Open market selling price. Price varies with economic conditions at any given time.
Net Claim: The total replacement cost less depreciation, deductible and prior payments equals the ACV amount for settlement check.
Non-Recoverable Depreciation:
Other Structure: In Homeowners policies, a structure located on the insured premises which is not directly attached to the dwelling structure. Examples include a detached garage, fence, tool shed, cabana, etc.
Personal Property: Refers to personal belongings of the insured, in contrast to real estate.
Premium: The amount of money an insurance company charges in return for providing coverage.
Property Damage: The destruction of, or physical injury to, property including damage to the value of the property and loss of use of the property.
Replacement Cost Value (RCV):The cost of replacing damaged or destroyed property without deduction for depreciation in the value of the property.
Supplement: Number indicates actions or material changes to the prior summary.
