Claims Glossary

a – c

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. Not a forced sale.

Examiner — An insurance representative who investigates personal or property damage and makes estimates for effecting settlements.

Agent — A person who represents the company and sells insurance on a commission basis.

Binder — A temporary insurance contract that provides coverage until the policy is issued and expires 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.

Coinsurance — Insurance in which the insured is obligated to maintain coverage on a risk at a stipulated percentage of its total value, or in the event of loss, suffer a penalty in proportion to the deficiency.

Coverage — An inclusion within the scope of an insurance policy; the amount available to meet liabilities.

D – H

Declarations Page — The portion of the insurance contract that contains information such 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 and 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.

Endorsement — A provision added to an insurance contract altering its scope or application.

Exclusion — A provision in an insurance policy that denies coverage for certain specified losses.

Holdback — Usually the amount of depreciation deducted from a claim payment, which may or may not be recoverable based on the policy provisions.

I – L

Insured — A person or institution covered by an insurance policy.

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 — The amount of an insured’s financial detriment by death or damage that the insurer becomes liable for.

M – O

Medical Expense — 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, usually a home or building.

Named Perils — Named perils are the specific dangers a policy insures you against, such as fire, windstorm, and hail. These perils are named or listed in the policy.

Negligence — Failure to exercise the care that a prudent person usually exercises to protect others from harm.

Non-Renewal — 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.

P – R

Peril — A specific risk covered by an insurance policy, such as fire, flood, hail, theft, or windstorm.

Policy — A contract that sets forth the rights and obligations of both a policyholder and an insurance company.

Premium — The consideration paid for a contract of insurance.

Reinsurance — Insurance by another insurer of all or a part of a risk previously assumed by an insurance company.

Renewal — A new policy or a standard certificate from an insurance company, stating that the conditions of your old policy will stay in effect.

Replacement Cost — The amount of money needed to rebuild the insured structure or replace any of your belongings that have been damaged, destroyed, or stolen, at current prices.

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 — The chance of loss, damage or injury, and the degree of probability of such loss.

S – Z

Schedule — A list of items covered by an insurance policy with their descriptions and values.

Stated Value Insurance — Insurance written to cover an item of property for a specific amount of insurance.

Tort — A wrongful act other than a breach of contract for which relief may be obtained in the form of damages or an injunction.

Uninsured — An individual who does not have insurance protection and personally assumes any losses.

Workers’ Compensation — Coverage required by State law against compensation to workers who are injured on the job, regardless of whether the employer has been negligent.