|Insurance Terms and Definitions
Actual Cash Value (ACV) Basic
valuation provision in property policies. ACV is determined but subtracting the
depreciation from the property's replacement value.
Additional Insured Individual or
business not listed as named insured in declarations, but added by an endorsement.
Examples include contractors or distributors.
Additional Coverages (general)
Coverages included in property policies, which extend beyond the principal policy
coverages. Examples included: fire department service charge.
Blanket Insurance Single amount of
insurance that is provided to all locations.
Collision Insurance (auto) Auto
coverage, which insures an auto for a collision with another vehicle or another object
other than an animal (striking an animal comes under Comprehensive Insurance on auto)
Comprehensive Insurance Auto
coverage, which insures an auto for fire, theft, earthquake, flood, vandalism, falling
objects, hitting an animal, etc. Also known as Other Than Collision.
- The part of your written policy (contract) that includes your name and address, the
property that is being insured, its location and description, the policy period, the
amount of insurance coverage and the applicable premiums.
Deductibles (general) The
portion of a claim you pay out of pocket before the insurance company pays. A higher
deductible will lower your premium and you do not have to carry the same deductible for
comprehensive and collision coverages.
Direct Loss Losses that are
the direct physical result of an insured peril.
- A restriction in your insurance policy that denies coverage for certain perils, persons,
property or locations.
First Party Benefits (auto)
Benefits that are payable to an insured.
First Named Insured (general)
The individual named in a commercial policy who is responsible for carrying on the
day-to-day functions of the insured, such as paying premiums and/or reporting losses.
Fraud Any person who knowingly
and with intent to defraud any insurance company or another person files an application
for insurance containing any materially false information, or conceals for the purpose of
misleading information concerning any fact material thereto, commits a fraudulent
insurance act, which is a crime and subjects the person to criminal and civil penalties.
Full Tort (auto)
This form of
insurance allows you to maintain an unrestricted right for yourself and other members of
your household to seek financial compensation for injuries caused by other drivers.
Under this form of insurance, you and other household members covered under this policy
may seek recovery for all medical and other out-of-pocket expenses and may also seek
financial compensation for pain and suffering or other non-monetary damages as a result of
injuries caused by other drivers. We always recommend Full Tort to our automobile
Hazards (general) Condition or
exposure that increases the possibility of loss (poor housekeeping, bad wiring, etc.)
Insurable Interest (general) Some
form of financial interest in the item to be insured. Usually ownership.
Insured - The person or organization covered by an
Limited Tort In consideration of a
lower premium this form of insurance limits your right and the rights of members of your
household to seek financial compensation for injuries caused by other drivers. Under
this form of insurance, you and other household members covered under this policy may seek
recovery for all medical and other out-of-pocket expenses, but not for pain and suffering or other non-monetary damages.
- The specified amount up to which the insurance company will protect you as set forth in
Market Value The price one would pay
based upon free market conditions.
Subsidence Mine subsidence is movement
of the ground surface as a result of the collapse or failure of underground mine workings.
In active underground mining operations using longwall mining or high extraction pillar
recovery methods, subsidence can occur concurrently with the mining operation in a
predictable manner. In abandoned mines where rooms and unmined coal pillars are
often left in various sizes and patterns, it may be impossible to predict if and when
subsidence will occur. Mine subsidence resulting from abandoned room and pillar mines can
generally be classified as either sinkhole subsidence or trough subsidence.
Mine Subsidence IS NOT COVERED under homeowner insurance
Named Insured (general) The
individual or business named in the policy declarations.
Named Peril Policy Policy that
specifically lists the perils insured against in the policy.
Negligence Failure to exercise
the care that a reasonable or prudent person would under similar circumstances.
Occurrence (general) An
accident, including continuous or repeated exposure to substantially the same general
harmful conditions that result, during the policy period, in bodily injury or property
Peril A cause of loss (i.e.
fire, lighting, theft, etc.)
Personal Umbrella Policy
Personal liability policy, which provides coverage in two areas: first, losses in
excess of the required underlying limits, and second, for other coverages, not provided
under underlying policies (i.e. personal injury, slander).
Personal Articles Floaters
Inland Marine Coverage which insures personal property for all risks of direct
physical loss except for war risks, nuclear hazards, wear and tear, deterioration,
inherent vice, insects or vermin.
Personal Property Replacement Cost
Homeowner Endorsement which provides full replacement cost coverage on personal
property in place of actual cash value coverage.
Policy Period (general) Time
period as indicated in the declaration page during which coverages will be provided.
Property Damage Physical
injury to tangible property resulting in loss.
- A cost estimate for insurance coverages based on specific information, like drivers,
vehicles and driving record etc.
Replacement Cost Basic
valuation provisions which replaces old damaged property with new replacement property at
today's replacement cost, without any deduction for depreciation.
known as an endorsement, a rider is an amendment to the policy used to add or delete
Subrogation Legal process
which permits the insurance company to subrogate against third parties who, because of
their negligence, cause the company to pay a claim.
An extra charge
applied by the insurer. For automobile insurance, a surcharge is usually for accidents or
Underinsured Motorist Insurance (auto)
Auto coverage which protects the auto owner in the event a negligent motorist causes an
accident and carries limits which are too low to pay what the insured is due.
Applies to Bodily Injury only. Physical Damage falls under Collision Coverage
- The process of determining risk and in what amounts and on what terms the insurance
company will accept the risk.
Uninsured Motorist Insurance (auto)
Auto coverage which protects the auto owner in the event an uninsured driver (one
driver without insurance) causes an accident. Applies to Bodily Injury only.
Physical Damage falls under Collision Coverage
absence of people from the insured home or building. Generally will not affect a claim
The absence of both people and furniture from the insured home or building. Vacancy
will affect a claim settlement if the building is vacant beyond 30 days for personal
policies and 60 days for commercial policies.
Call Joe today with questions about any of this important information: (724) 842-1841,
(724) 274-4814 or send an email to: