Glossary
The following definitions
will help you make a more informed decision when buying homeowner's
insurance.
Additional Living Expense
(Also Called Loss-of-Use)
Coverage that pays extra, above-normal expenses such as food and lodging
while the policyholder's home undergoes repair. Not applicable to children
living away at college.
All-Risk or Special-Form Policy
A policy that covers the loss of property or damage that results from any
peril, except those specifically excluded in the contract.
Cancellation
Termination of an insurance policy by the insurance company or policyholder
before it expires.
Claim
A request for reimbursement for a loss covered by the policy. For example,
an insured may file a claim for items stolen from his or her home.
Deductible
The amount a policyholder must pay per claim or loss before the company will
begin paying. Deductibles are fixed amounts specified in the policy. Some
companies offer percentage deductibles perils, such as windstorm, hurricane
or hail.
Endorsement
A change added to an insurance policy that modifies the original tem1s.
Exclusion
Persons, property, perils or situations not covered under a standard
homeowner's policy. Some common examples in Florida include flood damage,
earthquake, war and sewer backup.
Floater
Additional coverage added to an insurance policy to cover special items such
as expensive jewelry or antiques.
Insured Loss
A loss (theft, damage, etc.) the insurance policy will pay for in full, or
in part.
Liability
Legal obligation.
Licensed Agents and Companies
Agents and companies approved and monitored by the Department of Insurance
to sell insurance.
Limit
The maximum amount of benefits an insurance policy will pay in case of a
loss.
Named Perils
Perils specifically covered by, and named in, a policy. For example,
lightning and vandalism.
Package Policy
An insurance policy that includes several kinds of coverages. For example, a
homeowner's policy usually includes property damage, additional living
expenses, personal liability and medical payments.
Peril
The cause of a loss to a policyholder, such as fire or theft. An insurance
policy will specify the types of losses covered.
Premium
The amount a policyholder pays for an insurance policy. Premiums, paid
monthly or annually, depend upon the payment plan offered by the company.
Risk
A chance of loss to insured persons, liabilities or assets.
