Actual Cash Value
The replacement cost of the property less any deduction for depreciation due to wear and tear or obsolescence.

Additional Living Expenses
Coverage under a Homeowners, Condominium, and Renters policy that reimburses costs of residing in a temporary location until the insureds home can be made whole again.

Appurtenant Structures
Coverage for additional buildings which are self standing and unattached to other buildings on the same property as the principal insured building.

Catastrophic Events
A violent or sudden change in a feature of the earth, usually a destructive event.

Coinsurance
Part of a loss which is covered by insurance that the insured pays. Sometimes referred to as a deductible.

Condo Policy
Policy designed for Condominium unit owners to cover their personal property, the inside walls of the unit and liability and medical payments. Known as a Homeowners 6 Policy.

Deductible
Amount of loss not covered by insurance. The first dollar amount of the loss which is paid by the insured and not reimbursed by insurance.

Depreciation
Actual or accounting recognition of the decrease in the value of a (hard asset) property over a period of time.

Exclusions
Claims, activities or conditions listed as not covered under an insurance contract.

Exposures
Object or person exposed to possible harm or damage.

Flood Coverage
Coverage made available to residents of a community on a subsidized and nonsubsidized premium rate basis once the governing body of the community qualifies that community for coverage under the National Flood Insurance Act.

Hail
Precipitation in the form of small balls or lumps.

Homeowners 4
Policy that provides protection for personal property only. There is no building coverage. However, there is Liability and Medical Payments included.

Homeowners 6
Policy designed for Condominium unit owners to cover their personal property, the inside walls of the unit and liability and medical payments.

Homeowners Policy
A package policy that combines (1) coverage against the insureds property being destroyed or damaged by various perils, and (2) coverage for liability exposure of the insured.

Liability
Insurance coverage that provides coverage when the insured is legally obligated to pay for bodily injury, damages to property or financial loss to others due to the insured's negligence.

Loss Assessment
The assessment of reductions in the value of property due to physical damage or destruction.

Loss of Use
If the dwelling is uninhabitable following a covered loss, the insurance company will provide the insured with either "additional living expense" meaning any necessary increase in living expenses incurred by the insured so that the household can maintain its normal standard of living.

Loss Payable
Coverage for a mortgagee where real or personal property, used as security for a loan, is damaged or destroyed.

Mysterious Disappearance
A policy clause that excludes coverage for loss of property if the cause of the loss cannot be identified.

Personal Liability
Liability imposed on an individual as a result of his/her personal negligence.

Property
Structures and personal property that can be damaged by perils, such as fire and lightning. Homes and can be damaged by Lightning and clothing can be destroyed by fire.

Property Damage
Damage to property of others, not the insured's property. Property that has sustained damage is said to have Property Damage. Property Damage is often measured in dollar amounts of damage that may be the dollar amount it would cost to repair or replace the damaged property.

Renters Insurance
Policy that provides protection for personal property only. There is no building coverage. However, there is Liability and Medical Payments included. Known as Homeowners 4.

Replacement Cost Basis
To place the insured in the same financial position after a loss as prior to it and the insured should not profit or lose by incurring a loss.

Third Parties
Individuals other than the insured or insurer who has incurred a loss or is entitled to receive a benefit payment as the result of the acts or omissions of the insured.

Trailer
A motor vehicle which is not self propelled and must be moved by the use of another vehicle which is self propelled.

Utmost Good Faith
The assumption that everyone has acted in good faith and trustworthiness and not hidden material facts or done any actions to another to injure or harm them.

Wrongful Acts
Negligent acts performed by individuals against others that cause them harm or injury.

Homeowner Insurance Terms