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Insurance Glossary

ACV (Actual Cash Value) – ACV is an acronym for "Actual Cash Value" which is a type of replacement cost coverage included in many insurance policies. What this means, is if you have ACV coverage, your losses will be reimbursed based on the actual market value of the item at the time of loss.

Adjuster – An adjuster is a type of insurance professional that specializes in "adjusting" insurance losses. Adjusters evaluate the damage and create estimates to return the item to its previous condition.

Claim – A claim is the insured's notification to an insurance company that a loss has occurred. It details what was lost, how it was lost, and when it was lost.

Denial – Not all insurance claims are accepted by the insurance company. After reviewing a claim the insurance company may agree, it may need additional information, or it may deny the claim.

Deductible – A deductible is the insured's payment amount for a loss. It is defined in the policy. After the deductible has been fulfilled, the insurance company will pay its portion up to the policy limits.

Depreciation – Due to age or wear and tear, property depreciates. That is, it loses value.

Endorsement – An endorsement can either add or remove coverage from an insurance policy. They are commonly used to increase coverage for expensive items that are typically subject to policy limits.

Exclusion – Insurance policies often "exclude" specific damage types, causes, or items from coverage. These are known as "exclusions."

Insured – The holder of an insurance policy.

Insurer – The insurance company that issues an insurance policy.

Peril – Causes of insurance losses are called "perils." For example, a tornado is a peril that can cause extensive damage. Some perils, often earthquakes and mudslides, are specifically excluded from coverage.

Policy – An insurance policy is the written contract detailing the terms, conditions, exclusions, limits, premiums, deductibles, and other details of insurance coverage.

Policy Limit – Insurance policies have limits as to what they will pay. Some policy limits are for the entire claim while others are in place for specific types of claims such as a policy limit on the amount of cash an insurance company will cover is cash is lost during a covered loss.

Premium – Insurance policies are paid for through monthly or annual premiums. This is the amount of money that the policyholder must pay each month or year for coverage.

Rider – A rider either adds or removes coverage from an insurance policy. Riders are commonly used to increase coverage for expensive items that are typically subject to policy limits.

Statute of Limitations – The time period from the date of loss until the time an insured can file a related lawsuit is known as the statute of limitations.