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Insurance Glossary

Act of God - Hurricanes, lightning, earthquakes, and tornadoes are a few examples of what the insurance industry calls an "act of God." These are natural, unpreventable occurrences not caused by humans. For example, arson or a building explosion, would not be considered an act of God.

Actual Cash Value (ACV): ACV is the value of property at the time of loss. This value can be influenced by market value or cost minus depreciation. 

Additional Living Expenses: If you must live elsewhere during repairs, insurance companies pay additional living expenses such as hotel costs, meals, and moving expenses.

Cancellation - When coverage is stopped before it's expiration date either by the insurance company or the policyholder.

Claim - An insurance claim is a formal notice to an insurance company from a policyholder requesting reimbursement for a covered loss.

Company Adjuster - An insurance company adjuster works for an insurance company. 

Deductible - Deductibles are specified in insurance policies as the amount that policyholders must pay toward the claim. For example, if you have a $500 deductible, you must pay $500 before the insurance company begins paying its share.

Depreciation - Property decreases in value, a process known as depreciation, over time typically due to age or wear and tear.

Endorsement - A change to an insurance policy, adding, removing, or amending the terms of the policy. 

Guaranteed Replacement Cost - Some policies include guaranteed replacement cost coverage which will pay the full cost of rebuilding or replacing a covered loss.

Indemnity - Indemnity means putting you back into the same financial position you were in before the loss. 

Independent Insurance Adjuster - Independent insurance adjusters work for insurance companies on an independent contractor basis. Though not salaried, they represent the insurance company that hires them.

Inflation Guard Coverage - Insurance policies with inflation guard coverage automatically raise your coverage each year to protect against inflation in building costs.

Peril - Perils are events (such as floods, hurricanes, fires, tornadoes, or vandalism) that cause a loss.  

Personal Property - Personal property, also called "contents" are items that you own, use, or wear while on the property such as sofas, kitchen appliances, or clothes.

Policy Limits - Insurance policies have a maximum amount known as a limit that an insurance company will pay in the event of a covered loss.

Premium - A premium is the amount of money that you must pay for insurance coverage, either monthly or yearly.

Public Insurance Adjuster - A public adjuster is a licensed insurance adjuster who works specifically for policyholders instead of for insurance companies.

Replacement Cost - This is the amount of money needed to replace damaged property with the same type of property without depreciating it.

Settlement - An insurance settlement is the amount that you accept from the insurance company for your loss.