- Abandonment Clause:?
This type of insurance clause typically comes into play with marine property insurance, such as boats or watercraft. If a property owner’s ship is sunk or lost at sea, the abandonment clause affords the owner the right to essentially “give up” on finding or recovering his or her property and subsequently collect a full insurance settlement from the insurer.
- Actual Cash Value:?
Sometimes, insurance companies use actual cash value to determine the amount to be paid to a policyholder after loss or damage to the insured property. In the case of an automobile that is totaled in an accident, for example, the insurance company would typically pay the actual cash value of the vehicle after determining its replacement cost and subtracting factors such as depreciation and wear and tear. Under replacement-cost coverage, the insurer would pay the amount required to replace the covered item with a like-kind new one.
- Additional Living Expenses: ?
Additional living expense insurance can cover things like the increase in a monthly food bill due to having to eat-out at restaurants or even the loss of income that might be incurred if the insured person were renting out part of their space to a tenant. Essentially the insurance is intended to cover the insured person for the extra expenses he or she may incur due to being temporarily displaced from their home, such as in the case of a fire or flood.
Appraisals are typically used either for taxation purposes or to determine a possible selling price for the property in question. The appraiser can use any number of valuation methods in order to determine the appropriate value to assign, including the current market value of similar properties, quality of property and valuation models.
- Appraisal Clause: ?
When settlement amounts are in dispute, the most effective way to get results is the appraisal clause provision in the policy. The “appraisal clause” found in all insurance policies, was designed to establish a procedure to allow disputed amounts to be resolved by disinterested parties.
- Appraisal Value:?
An evaluation of a property’s value based on a given point in time that is performed by a professional appraiser during the mortgage origination process. The appraiser is usually chosen by the lender, but the appraisal is paid for by the borrower.
- Burden of Proof: ?
To prove or disprove a disputed fact.
- Business Interruption Claim:?
Business interruption insurance (also known as business income insurance) covers the loss of income that a business suffers after a disaster while its facility is either closed because of the disaster or in the process of being rebuilt after it. A property insurance policy only covers the physical damage to the business, while the additional coverage allotted by the business interruption policy covers the profits that would have been earned. This extra policy provision is applicable to all types of businesses, as it is designed to put a business in the same financial position it would have been in if no loss had occurred.
- Claim Denied:?
Denial of claim is the refusal of an insurance company or carrier to honor a request by an individual (or his or her provider) to pay for services.
- Commercial Property Insurance:?
Covers risk of loss to an organization’s buildings or personal property. Usually includes buildings, personal property of the insured, personal property of others on site and in insured’s possession. Coverage can be on an all risk or specific perils basis.
- Deductible :?
The amount you have to pay out-of-pocket for expenses before the insurance company will cover the remaining costs.
The cumulative depreciation of an asset up to a single point in its life. Regardless of the method used to calculate it, the depreciation of an asset during a single period is added to the previous period’s accumulated depreciation to get the current accumulated depreciation.
The act of evaluating or appraising; A statement of the approximate cost of work to be done.
- Hurricane Deductible:?
Amount you must pay out-of-pocket before hurricane insurance will kick in. Many insurers in hurricane-prone states are selling homeowners insurance policies with percentage deductibles for storm damage, instead of the traditional dollar deductibles used for claims such as fire and theft. Percentage deductibles vary from one percent of a home’s insured value to 15 percent, depending on many factors that differ by state and insurer.
- Insurance Claim:?
A formal request to an insurance company asking for a payment based on the terms of the insurance policy. Insurance claims are reviewed by the company for their validity and then paid out to the insured or requesting party (on behalf of the insured) once approved.
The party to whom the claim from a loss is to be paid. Loss payee can mean several different things; in the insurance industry, the insured or the party entitled to payment is the loss payee. The insured can expect reimbursement from the insurance carrier in the event of a loss.
- Mitigate: ?
To make less severe or harsh.
- Named Peril: ?
A home insurance policy that only provides coverage on losses incurred to your property from hazards or events named on the policy. Named peril policies may be purchased as a less expensive alternative to a comprehensive coverage or broad policies, which are policies that tend to offer coverage to most perils.
- Peril: ?
The cause of a possible loss.
- Peril-Specific Coverage: ?
Some policies, such as earthquake or flood policies, provide coverage for specific perils that are often excluded in package policies. Fire and sprinkler leakage damage as a result of an earthquake may be covered by a standard homeowners policy. To purchase the most appropriate insurance, it is important for you to consider what additional perils you may face. And, you should always verify what is covered in your specific policy.
In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the insured, known as the policyholder, which determines the claims which the insurer is legally required to pay. In exchange for an initial payment, known as the premium, the insurer promises to pay for loss caused by perils covered under the policy language.
- Premium: ?
The specified amount of payment required periodically by an insurer to provide coverage under a given insurance plan for a defined period of time. The premium is paid by the insured party to the insurer, and primarily compensates the insurer for bearing the risk of a payout should the insurance agreement’s coverage be required.
- Prior Loss:?
The insuring agreement of a liability policy that stipulates that the policy does not apply to losses of which the insured was aware prior to the policy period.
- Probable Cause:?
Probable cause is a level of reasonable belief, based on facts. Example if there is roof damage due to a recent hurricane.
- Proof of Loss:?
The purpose of the “proof of loss” is to give the insurance company an adequate opportunity to investigate and to prevent fraud against the insurer before evidence of the loss becomes stale or unavailable
- Property Damage: ?
Injury to real or personal property through another’s negligence, willful destruction, or by some act of nature. In lawsuits for damages caused by negligence or a willful act, property damage is distinguished from personal injury. Property damage may include harm to an automobile, a fence, a tree, a home, or any other possession. The amount of recovery for property damage may be established by evidence of replacement value, cost of repairs, loss of use until repaired or replaced, or, in the case of heirlooms or very personal items (e.g. wedding pictures) by subjective testimony as to sentimental value.
- Replacement Cost Value: ?
The dollar amount needed to replace damaged personal property or dwelling property without deducting for depreciation but limited by the maximum dollar amount shown on the declarations page of the policy.
- Risk: ?
Risk class, in insurance underwriting, is a grouping of insureds with a similar level of risk. Typical underwriting classifications are preferred, standard and substandard, smoking and nonsmoking, male and female.
The payment of proceeds by an insurance company to the insured to settle an insurance claim within the guidelines stipulated in the insurance policy
- Subrogation: ?
When an insurance company pays a policyholder for a loss, the insurance company has a right of subrogation against any person or persons responsible for the loss. The right of subrogation allows the insurance company to pay its policyholder and then pursue the responsible party for the payments made. When the insurance company collects against the responsible party or its insurance company, the policyholder will receive a pro-rata share of the deductible applied to the original loss payment made to the policyholder. If the subrogation claim is unsuccessful, then the accident may become a chargeable accident to the policyholder and possibly result in a premium increase.
- Water Exclusion Cause:?
Water damage is one of several types of exclusion clauses commonly found in homeowners’ and renters’ insurance policies. Other common exclusions include earthquakes, landslides, war, nuclear hazards and government action. On the other hand, losses that most policies do cover include fire, wind, hail, vehicle damage, vandalism, theft, and falling objects, among other losses.