Insurance Policy Glossary of Terms

8/9/2019 Insurance Policy Glossary of Terms

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Preface

WeatClaimsMate.comunderstandthatthenumberoneobjectiveoftheinsurance

companiesistomakethedeclarationsofhomeandcommercialinsurancepoliciesasdifficulttointerpretaspossible.WehavedecidedtoputthisGlossaryofTerms

togethertoassistyouinnavigating the often confusing and ambiguous wording that

they use.Understanding the terms in this glossary will give you a good basis for

interpreting your policy, but it is imperative that you seek the assistance of a trained

and licensed Public Adjuster before filing a claim. The wording in your policy is

meant to confuse you and it often takes a trained professional to interpret the

meaning. When filing a claim, your statements can often be taken in a context that

you did not mean, thereby giving them reason to deny that claim.

Before filing your claim, please contact us at ClaimsMate.com for a free overview

of the claims process. At that time, we will be happy to review your policy language

and the basis for your claim. Our staff has over a decade of experience in the

insurance industry (formally an adjuster that worked for several insurance

companies) and the claims filing process. The insurance industry is a risk based

business that successfully makes money. This means that they reap profits at your

expense by delaying, distracting and denying your valid claim. We at

ClaimsMate.com are here to make sure that doesn't happen to you!

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©ClaimsMate.com Page1

ACT OF GOD - An unpreventable accident or event that is the result of natural

causes; for example, floods, earthquakes, or lightning.

ACTUAL CASH VALUE - Cost of replacing damaged or destroyed property with

comparable new property, minus depreciation and obsolescence. For example, a 10-

year-old sofa will not be replaced at current full value because of a decade of

depreciation.

ADDITIONAL LIVING EXPENSES - The total cost incurred when an insured

loss requires you to live outside of your home while repairs are made. An insurer will

pay any reasonable increase in living expenses, including moving expenses, motel,

restaurant so that your household can maintain its normal standard of living while

repairs are being made to your damaged home.

ADJUSTER - A representative of the insurer who seeks to determine the extent of

the insurer's liability for loss when a claim is submitted.

AGENT - An individual who sells and services insurance policies in either of two

classifications:

1. Independent agent represents at least two insurance companies and (at least in

theory) services clients by searching the market for the most advantageous

price for the most coverage. The agent's commission is a percentage of each

premium paid and includes a fee for servicing the insured's policy.

2.

Direct or career agent represents only one company and sells only its policies.

This agent is paid on a commission basis in much the same manner as the

independent agent.

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APPRAISAL - A survey by a claims representative or claims appraiser estimating

the amount of damage to property and the cost to repair or the determination of a

complete loss.

ARSON - The intentional setting of one's own property in an attempt to collect

insurance compensation.

AVALANCHE - A slippage of built-up snow down an incline possibly mixed with

ice, rock, and soil or plant life in what is called a debris avalanche. Avalanches are a

major danger in the mountains during the winter as a large one can run for miles, andcan create massive destruction of the lowered forest and anything else in its path.

BINDER – Temporary insurance contract providing coverage until a permanent

policy is issued.

BURGLARY - Coverage against loss as a result of forced entry into premises.

CANCELLATION - The termination of insurance coverage during the policy

period. Flat cancellation is the cancellation of a policy as of its effective date, without

any premium charge.

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CIVIL AUTHORITY - An insurance policy provision that will typically extend

coverage for Business Interruption and necessary Extra Expense caused by action of

civil authority that prohibits access to the described premises due to direct physical

loss of or damage to property. The requirements for coverage under this provision arethe existence of an order of civil authority which prohibits access to the insured

premises, is caused by or results from physical damage to property other than insured

property, that damage to property must be due to a peril covered under the policy, and

that denial of access must be the proximate cause of loss of business income.

CIVIL REMEDY NOTICE - In Florida, Civil Remedy, also known as "Bad

Faith," allows an individual to sue an insurance company for damages and to recoup

court costs and attorney's fees. In order to use this law, the person or their attorney,

must submit a Civil Remedy Notice to the Department of Financial Services (DFS)

and the insurance company at least 60 days prior to filing suit. This Notice must be

submitted to DFS by using the DFS Civil Remedy website and then sent to the

insurance company.

CLAIM- A demand made by the insured, or the insured's beneficiary, for payment

of the benefits as provided by the policy.

CLAIMANT - The first or third party. That is any person who asserts right of

recovery.

COINSURANCE - In property insurance, requires the policyholder to carry

insurance equal to a specified percentage of the value of property to receive full

payment on a loss. This amount is usually 80% of the value of your home.

COLLAPSE - A property insurance peril, subject to its own specific agreement in

commercial property policies, which otherwise insure on an open perils basis.

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COMPANY ADJUSTER - An adjuster who is employed and works solely for an

insurance company or self-insured entity.

CONDITIONS - The part of the insurance policy that explains the obligations of

the insured and the insurance company under the property, for property and liability.

It explains your duties in the event of a loss and how the company will settle.

COVERAGE - The scope of protection provided under an insurance policy. In

property insurance, coverage lists perils insured against, properties covered, locations

covered, individuals insured, and the limits of indemnification. In life insurance,living and death benefits are listed.

DEBRIS REMOVAL - A consequential coverage, which pays for, the insured's

expenses to remove debris of covered property caused by a Covered Cause of loss.

DECLARATIONS PAGE - Commonly the first page of your policy containing the

name of the insured, the address, and the dollar amount of coverage provided, a

description of the property, and the premium cost.

DECLINE - The company refuses to accept the request for insurance coverage.

DECLINED RISK

A proposed insured who is considered to present a risk that is

too great for an insurer to cover.

DEDUCTIBLE - Amount of loss that the insured pays before the insurance kicks

in.



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EXTRA EXPENSE COVERAGE - If your building were rendered uninhabitable

by fire or any other insured peril, it would probably be necessary to secure other

quarters to continue your business operations. However, the use of such buildings

would undoubtedly involve many extra expenses, such as rent, installation oftelephones, etc. Extra Expense insurance covers such expenditures over and above

your normal monthly expenses.

FIRE INSURANCE - Coverage for loss of or damage to a building and/or contents

due to fire.

FEMA - Federal Emergency Management Agency - A former independent agency

that became part of the new Department of Homeland Security in March 2003 - is

tasked with responding to, planning for, recovering from and mitigating against

disasters

FLOODPLAIN - A land area adjacent to a river, stream, lake, estuary or other

water body that is subject to flooding. These areas, if left undisturbed, act to store

excess floodwater.

FRAUD - The intentional perversion of the truth in order to mislead someone into

parting with something of value.

FRIENDLY FIRE - Fire intentionally set in a fireplace, stove, furnace or other

containment that has not spread beyond it.

FUNGI - Refers to, but is not limited to, any form or type of mold, yeast,

mushroom or mildew whether or not allergenic, pathogenic or toxigenic Any

substance, vapor or gas produced by, emitted from or arising out of any fungi or

spores or resultant mycotoxins, allergens or pathogens



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GROSS NEGLIGENCE Reckless action without regard to life, limb, and/or

property.

HAZARD - A circumstance that increases the likelihood or probable severity of a

loss. For example, the storing of explosives in a home basement is a hazard that

increases the probability of an explosion.

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.

INDEMNIFY - Restoration to the victim of a loss by payment, repair or

replacement.

INFLATION GUARD COVERAGE - An automatic annual raise in your

coverage limits based on the insurance company’s estimate of rising building

material and labor prices.



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INSURANCE ADJUSTER - A representative of the insurer who seeks to

determine the extent of the insurer's liability for loss when a claim is submitted.

Independent insurance adjusters are hired by insurance companies on an "as needed"

basis and might work for several insurance companies at the same time. Independentadjusters charge insurance companies both by the hour and by miles traveled. Public

adjusters work for the insured in the settlement of claims and receive a percentage of

the claim as their fee.

INSURANCE ATTORNEY - An attorney who practices the law as it relates to

insurance matters. Attorneys might be solo practitioners or work as part of a law

firm. Insurance companies who retain attorneys to defend them against law suits

might hire staff attorneys to work for them in-house or they might retain attorneys on

an as-needed basis.

INSURED - The policyholder - the person(s) protected in case of a loss or claim.

INSURER - The insurance company.

LANDSLIDE -A disaster closely related to an avalanche, but instead of occurring

with snow, it occurs involving actual elements of the ground, including rocks, trees,

parts of houses, and anything else which may happen to be swept in.

LIMIT - Maximum amount a policy will pay either overall or under a particular

coverage.

LOSS The dollar amount associated with a claim.



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LOSS ADJUSTMENT EXPENSE Cost involved in an insurance company’s

adjustment of losses under a policy.

LOSS OF USE INSURANCE - Compensation for loss caused because the

policyholder has lost the use of his property.

MATERIAL MISREPRESENTATION – A misrepresentation that would effect

the insurance company’s evaluation of a proposed insured.

MEDIATION

Situation in which parties agree to take part in a structured

settlement negotiation through the guidance of a neutral expert. By participating in

this process, the parties do not agree that they will actually settle and the mediator

does not have the authority to impose such a settlement.

MOLD - A very large group of microscopic fungi that live on plant, animal or

surface matter. Most are filamentous organisms and produce spores that can be air-,

water-, or insect-borne. A common trigger for allergies and can be fatal if

overexposure occurs. Traditionally, mold damage has been covered where it results

from a covered peril, such as a broken pipe, a storm, or fire suppression efforts, but

not where it occurs gradually over time due to wear and tear.

MORTGAGEE CLAUSE - A clause in an insurance policy that makes a claim

jointly payable to the policyholder and the party that holds a mortgage on the

property.

MUDSLIDE - A mudslide is a slippage of mud because of poor drainage of rainfall

through soil. An underlying cause is often deforestation or lack of vegetation.



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MULTI PERIL INSURANCE - Personal and business property insurance that

combines in one policy several types of property insurance covering numerous perils.

NAMED PERILS - Perils specifically covered on insured property.

NEGLIGENCE Failure to act within the legally required degree of care for

others, resulting in harm to them.

NFIP-NATIONAL FLOOD INSURANCE PROGRAM (NFIP) - The program

of flood insurance coverage and floodplain management administered under the Act

and applicable Federal regulations promulgated in Title 44 of the Code of Federal

Regulations, Subchapter B.

100 YEAR FLOOD - A flooding condition which has a one percent chance of

occurring each year. The 100-year flood level is used as the base planning level for

floodplain management in the National Flood Insurance Program.

OCCURRENCE - An event that results in an insured loss. In some lines of

business, such as liability, an occurrence is distinguished from accident in that the

loss doesn't have to be sudden and fortuitous and can result from continuous or

repeated exposure which results in bodily injury or property damage neither expected

not intended by the insured.



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ORDINANCE OR LAW COVERAGE -For Loss to the Undamaged Portion of

the Building Pays for the loss of value of an undamaged portion of the existing

building, which must be demolished and/or removed to conform to municipal

ordinance, code, etc. Demolition Cost Pays for the cost of demolition of theundamaged portions of the building necessitated by the enforcement of building,

zoning or land use ordinance or law. Increased Cost of Construction Pays for any

increased expenses incurred to replace the building with one conforming to building

laws or ordinances, or to repair the damaged building so that it meets the

specifications of current building laws or ordinances.

PERIL - The cause of a possible loss.

PERSONAL PROPERTY - Articles you own, wear or use while on your

premises, also known as contents. Examples: clothing, furniture

PERSONAL PROPERTY FLOATER -An endorsement that provides additional

coverage for furs, jewelry, stamps, coins, antiques, computer, guns, and other items

that exceed the normal low limits in your home policy.

POLICY - The written contract effecting insurance, or the certificate thereof, by

whatever name called, and including all clause, riders, endorsements, and papers

attached thereto and made a part thereof.

POLICY LIMIT - The maximum amount a policy will pay, either overall or under

a particular coverage.

POLICY RIDER or Endorsement

An amendment to an insurance policy that

becomes part of the insurance contract and either expands or limits the benefits

payable under the contract.



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PREMIUM - The price of insurance protection for a specified risk for a specified

period of time.

PROPERTY DAMAGE - Damage to another person's property. The purpose of

liability insurance is to cover property damage to a third party resulting from the

negligent or intentional acts of an insured.

PROXIMATE CAUSE - That event which, in an unbroken sequence, results in

direct physical loss under an insurance policy. For example, wind is the proximate

cause of loss when a windstorm blows out a window that in turn topples a lit candle

that sets fire to a structure and burns it down.

PUBLIC ADJUSTER - Public adjusters are trained and licensed insurance

adjusters who work exclusively for the policyholder rather than the insurance

company.

RENEWAL - The automatic re-establishment of in-force status effected by the

payment of another premium.

REPLACEMENT COST - 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 Uncertainty of a financial loss; term used to designate an insured or a peril

insured against.



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RISK MANAGEMENT - Management of the pure risks to which a company

might be subject. It involves analyzing all exposures to the possibility of loss and

determining how to handle these exposures through practices such as avoiding the

risk, retaining the risk, reducing the risk, or transferring the risk, usually byinsurance.

SCHEDULED ARTICLES - Addition to a homeowner's policy to provide extra

coverage for listed items. Examples: jewelry, furs, stamp and coin collections,

bicycles, cameras, etc.

SETTLEMENT - The dollar amount you agree to accept from the insurance

company as payment for your loss.

SINK HOLE - A sinkhole is a localized depression in the surface topography,

usually caused by the collapse of a subterranean structure, such as a cave. Although

rare, large sinkholes that develop suddenly in populated can lead to the collapse of

buildings and other structures.

STORM SURGE - A storm surge is an onshore rush of water associated with a low

pressure weather system, typically a tropical cyclone. Storm surge is caused

primarily by high winds pushing on the ocean’s surface. The wind causes the water

to pile up higher than the ordinary sea level. Storm surges are particularly damaging

when they occur at the time of high tide, combing the effects of the surge and the

tide.

SOLAR FLARE - A solar flare is a violent explosion in the Sun's atmosphere with

an energy equivalent to tens of millions of hydrogen bombs. Solar flare emissions

are a danger to orbiting satellites, manned space missions, communications systems,

and power grid systems.

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SUBROGATION - The circumstance where an insurance company takes the place

of an insured in bringing a liability suit against a third party who caused injury to the

insured.

SUBSIDENCE - Movement of the land on which property is situated. A structure

built on a hillside may slide down the hill due to earth movement caused by heavy

rains.

TENANTS INSURANCE - Coverage for the contents of renter’s home or

apartment and for liability. Tenant policies are similar to homeowners insurance,except that they do not cover the structure.

TERRORISM - An ideologically motivated, unlawful act or acts Including but not

limited to the use of violence or force or threat of violence or force committed by or

on behalf of any group(s), organization(s) or government(s) for the purpose of

influencing any government and/or instilling fear in the public or a section of the

public.

UNDERWRITER - The individual trained in evaluating risks and determining

rates and coverages for them. Also, an insurer.

UNDERWRITING - The process of selecting risks for insurance and classifying

them according to their degrees of insurability so that the appropriate rates may be

assigned. The process also includes rejection of those risks that do not qualify.

UNFRIENDLY FIRE - A fire that escapes from its normal contained area. For

example, fire in the fireplace leaps onto the sofa.



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VACANT - All occupants have moved out with no intention of returning regardless

of the presence of furnishings In the case of a newly constructed house, no occupant

has yet taken up residence

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Personal Message from the team at ClaimsMate.com.

Thankyoufortakingtimeoutofyourbusyscheduletoeducateyourself

tothevalueofthedefinitionslistabove.Weareavailable7daysa

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andneitherdowe.

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Insurance Policy Glossary of Terms