Glossary Actual Cash Value
An amount equal to the replacement cost of lost or damaged property at the time of loss, less depreciation.

Additional Insurance
Insurance that supplements an already existing policy. It is uncommon that the company or its duly authorized agent allows additional insurance.

Additional Living Expense
Any necessary increase in living expenses incurred by the insured, so the household can maintain its normal standard of living.
Basic Limits
The lowest coverage amount, as prescribed by law or the company, for which an insurance policy can be written. Basic Limits primarily prescribe limits of liability.
A demand for payment under an insurance contract for the estimated or actual amount of loss.

Provisions that set forth the rights, duties, and responsibilities of the parties to an insurance contract. Conditions may be found anywhere in the contract.
A sum of money that a party is legally obligated to pay to another as compensation for injury.

The part of the policy that provides detailed information about the insured, the insurer, and the coverages.

The amount of a claim that the policyholder has agreed to pay. This amount is deducted from a claims payment.

A decrease in the value of any type of tangible property over time.
Fire Insurance
Contract prescribed by each state insuring against direct loss by fire, lightning, and other defined causes.

Flood Insurance
Coverage against damage caused by the rising or overflowing of bodies of water. This is available through a national insurance program and must be bought separately.
Homeowner's Policy
A form of package policy including fire and other perils, theft insurance, and comprehensive personal liability. The premium is stated as one amount.
Insurance to Value
The amount of insurance written on property is approximately equal to its value. An insured most always wants to insure all property to value.
Liability Insurance
Liability insurance pays on behalf of the insured for certain types of injury to others.

Limit of Liability
The maximum amount that an insurer agrees to pay in the case of loss under policy contract.

A value reduction in an insured's property caused by an insured peril, the amount sought in a claim, or the amount paid on behalf of an insured under an insurance contract.
Natural and Probable Consequences
Consequences of a given act that a reasonable person could foresee.
The cause of a possible accident, loss, or claim.

Personal Inland Marine Insurance
(Personal Articles Floater) Worldwide coverage on an all risk basis for scheduled valuable personal property.

A formal written contract of insurance.
Total Loss
Loss to the insured of the entire value of goods or other property insured, or a loss entailing the payment of the full face amount of an insurance contract.

A process that evaluates an applicant and their property against pre-established criteria for insurability to determine whether the applicant will be rejected or accepted for coverage and whether at standard or modified rates.
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