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  The following is glossary of terms used on our website:  


ACT OF GOD - An unpreventable accident or event that is the result of natural causes; for example, floods, earthquakes, or lightning.

ACTUAL CASH VALUE (ACV) - The actual value of property at the time of loss. It is less than replacement cost because depreciation decreases the value.

ADDITIONAL LIVING EXPENSE - When damage to or loss of home forces an insured to keep a temporary residence elsewhere in order to maintain a normal standard of living. Examples: Hotel accommodations, restaurant meals and laundry expenses.

AGENT - An insurance company representative and adviser who sells insurance policies. (See also: Independent Agent, Exclusive Agent and Direct Writer).

AIR BAG DISCOUNT - You get credit here if you have a driver’s side airbag. You will save even more if you have a passenger side airbag as well.

ALL RISKS POLICY - A policy which provides coverage against loss of or damage to property from any cause, except those that are specifically excluded in the policy.

ANTI-LOCK, ANTI-THEFT DISCOUNTS - If your car is equipped with factory installed anti-lock brakes on all four wheels you may be eligible for some saving on you liability and collision coverage. If you have an alarm system on your vehicle or a device that prevents your car from starting, you could cut some costs on your comprehensive coverage.

ANTISELECTION – The tendency of individuals who believe they have a greater than average likelihood of loss to seek insurance protection to a greater extent than do those who believe they have an average or a less than average likelihood of loss.

ANNUITY – contract sold by insurance companies that pays a monthly (or quarterly, semiannual, or annual) income benefit for the life of a person (annuitant), for the lives of two or more persons, or for a specified period of time.

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.

APPURTENANT STRUCTURE - Additional buildings like garages or barns, on the same premises as the main, insured building.

ARBITRITION CLAUSE - Provides a means for settlement when you and your insurer cannot agree on an acceptable claim amount. Appraisers representing each party select a neutral arbitrator. A decision by any two of the three constitutes a binding settlement.

ASSESSED VALUE - The monetary worth of real or personal property as a basis for its taxation. This value, established by a governmental agency, is rarely used by insurers as a means to determine indemnification.

ASSET RISK – a measure of an asset's default of principal or interest or fluctuation in market value as a result of changes in the market.

AUTHORIZED CONTROL LEVEL RISKED BASED CAPITAL – insurance company’s theoretical capital amount and surplus that is should maintain.

AUTHORIZED SERVICE (r) - A technician assigned by a home protection plan to replace or repair covered equipment in the event of a breakdown.

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, and can create massive destruction of the lowered forest and anything else in its path.



BCEGS - Building Code Effectiveness Grading Schedule. A classification of communities by the Insurance Services Office based on how well they have implemented and enforced building codes in their community.

BENEFICIARY – The person or party named by the owner of a life insurance policy to receive the policy benefit.

BINDER – temporary insurance contract providing coverage until a permanent policy is issued.

BROAD FORM INSURANCE - Coverage for numerous perils.

BROAD THEFT COVERAGE - A form on or endorsement to a dwelling policy that provides theft coverage for a named insured who is an owner occupant.




CALENDAR YEAR – Earned premiums and loss transactions occurring with the calendar year beginning Jan. 1, irrespective of the contractual dates of the policies to which the transactions relate and regardless of the dates of the accidents.

CALENDAR/ACCIDENT YEAR – The accumulation of loss data on all accidents with the date of occurrence falling within a given calendar year. The earned premium is the same as in calendar year.

CASH VALUE – The savings element of a permanent life insurance policy, which represents the policy owner’s interest in the policy.

CATACLYSM - Any great upheaval that causes sudden and violent changes, as an earthquake, war, great flood, etc. (New World)

CATASTROPHIC RISK - The risk of a large loss by reason of the occurrence of a peril to which a very large number of insured are subject. (Gloss.)

CATASTROPHIC LOSS - Damage resulting from a catastrophe.

CATEX - An exchange through which insurers trade "standardized catastrophe units."

CLAIM – A formal request for payment related to an event or situation that is covered under an in-force insurance policy.

COINSURANCE CLAUSE - A clause requiring the insured to maintain insurance on the property at least equal to a stipulated percentage of its value in order to collect partial losses in full.

COMBINE YOUR INSURANCE - Some companies will give you a discount if you have your car insurance, life insurance, homeowners or renters insurance and sometimes even health insurance with their company.

COMMERCIAL LINES – insurance coverages for businesses, commercial institutions, and professional organizations.

CONCENTRATION FACTOR – all companies are subject to an asset concentration factor that reflects the additional risk of high concentrations in single exposures

CONDO ASSOCIATION COVERAGE- A type of property insurance designed to cover the joint insurance needs of members of a condo association who collectively own property.

CONSUMER PRICE INDEX - An index of consumer prices based on the typical market basket of goods and services consumed by all urban consumers during a base period.

CONTINGENT BENEFICIARY – The party designated to receive proceeds of a life insurance policy following the insured’s death if the primary beneficiary predeceased the insured.

CONVERTIBLE TERM INSURANCE POLICY – A term life insurance policy that gives the policy owner the right to convert the policy to a permanent plan of insurance.

COVERAGE - The amount of protection the insurance provides. This may mean either the dollar amount purchased or the type of loss covered.

CORRECTIVE ORDER – an order issued by the commissioner specifying corrective actions that the commissioner has determined are required.

CREDIT LIFE INSURANCE – insurance issued to a creditor (lender) to cover the life of a debtor (borrower) for an outstanding loan.

CREDIT RISK – a measure of the default risk on amounts that is due from policyholders, reinsures or creditors.




DAYTIME LIGHTS - You can save on your collision coverage if your car has a daytime running light system.

DAMAGES - The sum of money that a party is legally obligated to pay another party as compensation for injury or other types of loss.

DEBRIS REMOVAL CLAUSE - Most property policies only cover direct damages caused by an insured peril. This clause provides the insured reimbursement for expenses incurred for the removal of debris.

DECLARATIONS - A section of an insurance policy which provides detailed information: Name and address of the insured, the insured property, its location and description, the policy period, the amount of coverage provided and the premium amounts.

DEDUCTIBLE - The amount of money an insured agrees to pay toward the total amount of an insured loss, before the insurance company pays the remainder of the covered loss.

DEPRECIATION - The decrease in value of any property over time resulting from use, wear and tear or obsolescence.

DISASTER - A natural or man-made event that negatively affects life, property, livelihood or industry often resulting in permanent changes to human societies, ecosystems and the environment.

DECLINED RISK – A proposed insured who is considered to present a risk that is too great for an insurer to cover.

DEGREE OF CARE – minimum of care owed by one party for the physical safety of another.

DIRECT WRITTEN PREMIUM - The total premiums received by a property and liability insurance company without any adjustments for the ceding of any portion of these premiums to the reinsures.

DIRECT INCURRED LOSS - The property loss in which the insured peril is the proximate cause of damage or destruction.

DIRECT LOSS - This is damage or a loss which is a result of a direct consequence of a particular peril. For example, fire damage to a freezer would be a direct loss. The food destroyed in the freezer as a result of the fire damage is considered an indirect loss.

DIRECT WRITER - A direct writer is an insurance company that sells directly through their own salaried or commissioned employees to the consumer.

DROUGHT - A drought is a long lasting weather pattern consisting of dry conditions with very little or no precipitation. During this period, food and water supplies can run low, and other conditions, such as famine, can result. Droughts can last for several years and particularly damaging in areas where residents depend on agriculture for survival.

DWELLING COVERAGE - The section of a homeowners insurance policy that covers a house, attached structures, and the personal property in it, plus other coverages. These forms vary by the degree of coverage they provide.

DWELLING COVERAGE (Replacement Cost) - Imagine your house on moving day...empty, waiting to be filled. This is the part referred to as Coverage A: your physical home (rooms, fireplaces, tile floors, carpeting, etc.) and the structures attached to it, such as an attached garage.

The amount of coverage assigned to your dwelling should reflect the amount it would cost to completely repair or rebuild your home should it suffer a covered loss. Often this is determined by your home's purchase price plus inflation. However, if it's been a while since you last updated your policy coverage or if you are not sure that your dwelling is adequately covered, you can either check with your agent.




EARNED EXPOSURES – The portion of the total amount of exposure (risk) corresponding to the coverage provided during a given time period.

EARNED PREMIUMS – The portion of the total premium amount corresponding to the coverage provided during a given time period.

EARTHQUAKE - A sudden shift or movement in the tectonic plate in the Earth’s crust. On the surface, this is manifested by a moving and shaking of the ground, and can be massively damaging to poorly built structures.

EARTHQUAKE ENDORSEMENT- Insurance coverage for damage caused by an earthquake. Most homeowners policies exclude this coverage. Homeowners who are concerned about the risk of earthquake damages may request this additional coverage.

EARTH MOVEMENT - A peril which includes mud flow, landslide, earth sinking, rising or shifting, and earthquake. This peril is usually not included on homeowners and commercial property policies.

EASEMENT - This entitles the holder to specific interests. Example: Using land owned by another to access your own property.

EIGHTY PERCENT RULE (also called the Co-Insurance Rule) - Requires your home to be insured for at least 80% of the full replacement cost at the time it is damaged or destroyed, if you want to collect the full replacement cost.

EFFECTIVE DATE (or Inception Date) - The date an insurance policy´s coverage begins or goes into effect.

ELDERLY OR RETIRED DRIVER DISCOUNT - Some companies give a discount to drivers that are over the age of 50 but some only offer it to drivers that age that are retired. From 50 to 59 you could receive even higher discounts but once you turn 60, the discounts decrease.

ENDORSEMENT - A change or amendment to an insurance policy that modifies the original provisions of the contract.

EVIDENCE OF INSURABILITY – Proof that a person is an insurable risk.

EXCLUSIVE AGENT - An agent who is employed by only one insurance company and who solicits business exclusively for that company only.

EXCLUSION - An insurance policy provision which rules out coverage of certain risks, persons, property or locations.

EXCLUSIONS, HOMEOWNERS INSURANCE - Part of an insurance contract that excludes coverage of certain perils, persons, property or locations.

EXPERIENCE RATING – A method of calculating group insurance premium rates by which the insurer considers the particular group’s prior claims and expense experience.

EXPIRATION DATE (or Expire Date) - The date the coverage of an insurance policy ends. There is usually a time of day associated with this date. Example: An expiration date of 06/05/03 at 12:01am means the coverage ends one minute after midnight on the date shown.



FACE AMOUNT – The amount of the death benefit payable under a life insurance policy.

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

FIREPROOF - Used in describing building construction, referring to buildings constructed to be practically undamageable by fire. This term is gradually being replaced by the term "fire-resistive", as it is impossible to design a totally fireproof building.

FIRE WALL - A wall specifically designed to contain or seal off fires within a building.

FLOATER - An insurance policy that covers personal property which may be moved from one location to another. The coverage "floats" based on the property location.

FLOOD - Any temporary submersion, partial or complete, of ordinarily dry land by water or mud. Floods are typically caused by an overflow of waters, whether inland, tidal or from any accumulated runoff from any source. Flood is excluded under a typical homeowner insurance policy.

FLOOD INSURANCE - Coverage against loss resulting from flood. This coverage is available separately from your homeowners policy through a program developed by private industry and the federal government.

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.

FRIENDLY FIRE - Fire intentionally set in a fireplace, stove, furnace or other containment that has not spread beyond it.

FRAME CONSTRUCTION - A building made primarily with wood frames and joists, the most common form of housing construction.

FREE LOOK PROVISION – An individual life insurance and annuity provision that gives the policy owner a stated time, usually 10 days after the policy is delivered, in which to cancel the policy and receive a full refund on the initial premium payment.



GENERAL LIABILITY INSURANCE – coverage for an insured when negligent acts and/or omissions result in bodily injury and/or property damage on the premises of a business, when someone is injured as the result of using the product manufactured or distributed by a business, or when someone is injured in the general operation of a business.

GRACE PERIOD – A specified length of time within which a renewal premium that is due may be paid without penalty.

GROSS NEGLIGENCE – reckless action without regard to life, limb, and/or property.



HAZARD – circumstance that increases the likelihood or probable severity of a loss.

HURRICANE - A hurricane is a low pressure cyclonic storm system which forms over the oceans. It is caused by evaporated water which comes off of the ocean and becomes a storm. The Coriolis Effect causes the storms to spin, and a hurricane is declared when this spinning mass of storms attains a wind speed greater than 74mph.

Each varies slightly in the amount and type of home insurance provided, with HO-3 being the most common policy:

HO-1- HO-1 is a limited home insurance policy that only covers items that are specifically described within the policy. This type of home insurance coverage may be used to cover the cost of one or several specific items, such as a valuable painting within the home.

HO-2 - HO-2 is also a limited policy. Unlike the HO-1 policy, however, it covers a certain area of the home and not just a specific object. In many cases, specific types of perils to be covered are listed within the home insurance policy.

HO-3 - The HO-3 home insurance policy is meant to cover all every aspect of the home, including the structure as well as the contents. This policy also covers liability issues that may arise from the regular use of the property and any accidents or injuries that visitors to the property may sustain. For this reason, these home insurance policies are also commonly referred to as “all risk” or “open perils” policies.

HO-4 - The HO-4 homeowners insurance policy is the one that is most commonly referred to as a renters insurance policy because it covers the apartment and its contents beyond what is covered by the blanket policy held by the complex. This renters insurance can also cover liabilities within a certain range of the renter’s home. Coverage may include injury as the result of smoke, explosion, riot, lightning, aircraft, falling objects, and more.

HO-5 - The HO-5 home insurance policy is similar to HO-3 coverage in the areas that it covers. The difference between the two is the depth and breadth of coverage provided by the HO-5 policy, which is greater than what the HO-3 policy covers.

HO-6 - HO-6 home owner’s insurance is often referred to as Condominium Coverage because it is specifically geared toward owners of condominiums. This policy covers the portion of the building that the insured owns as well as the property within this portion. It also includes liability coverage.

HO-8 - The HO-8 home insurance policy is commonly referred to as “older home” insurance because it covers a home with a lower market value at a higher replacement cost. This ensures that the homeowner will be able to cover the expenses of a new home if the current home were to be destroyed.

HO-35 - Loss Assessment Coverage.

HO-61-B - Valuable Items Plus.

HO-82- Personal Injury.

HO-85 - Enhanced Home Package.

HO-290- Replacement Cost Contents: an endorsement that allows for replacement cost on contents in the home, rather than Actual Cash Value.

HO-420- Additional Replacement Cost Protection.

HO-455- Identity Fraud Expense.

HO-459- Assisted Living Care Coverage.

HO-493- Actual Cash Value Loss Settlement - Roof.

HO-543- Residence Held In Trust.



INSURANCE TO VALUE - The amount of insurance written on property is approximately equal to its value. An insured most always wants to insure all property to value.

INCONTESTABILITY PROVISION – An insurance and annuity provision that limits the time within which the insurer has the right to avoid the contract on the ground of material misrepresentation in the application for the policy.

INCURRED BUT NOT REPORTED LOSSES (IBNR) – insured losses that have occurred but have not been reported to a primary insurance company.

INCURRED CLAIMS – The total number of claims associated with insured events/situations occurring during a given time period.

INCURRED LOSSES – The total dollar amount of losses associated with insured events/situations occurring during a given time period. A portion of incurred claims and losses represent insurers’ estimates of the final costs of pending claims that are still open during the reporting period, as well as estimates of losses associated with claims that have yet to be reported.

IRREVOCABLE BENEFICIARY – A life insurance policy beneficiary who has a vested interest in the policy proceeds even during the insured’s lifetime because the policy owner has the right to change the beneficiary designation only after obtaining the beneficiary’s consent.

INSURABLE INTEREST – The interest an insurance policy owner has in the risk that is insured. The owner of a life insurance policy has an insurable interest in the insured when the policy owner is likely to benefit if the insured continues to live and is likely to suffer some loss or detriment if the insured dies.


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.

LIABILITY INSURANCE - Insurance coverage that offers protection against claims alleging that a property owner’s negligence or inappropriate action resulted in bodily injury or property damage to another party.

LIFE AND HEALTH GUARANTEE ASSOCIATION – An organization that operates under the supervision of a state insurance commissioner to protect policy owners, insured's, beneficiaries, and specified others against losses that result from the financial impairment or insolvency of a life insurer that operates in the state.

LIMNIC ERUPTION - A sudden release of asphyxiating or inflammable gas from a lake.

LONG TAIL LIABILITY – one where an injury or other harm takes time to become known and a claim may be separated from the circumstances that caused it by as many as 25 years or more.

LOSS – The dollar amount associated with a claim.

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.

LOSS PAYABLE CLAUSE - A policy condition that enables an insured to direct the company to pay any loss that may be due to a third party.

LOSS RATIO – relationship of incurred losses plus loss adjustment expense to earned premiums.



MATERIAL MISREPRESENTATION – A misrepresentation that would effect the insurance company’s evaluation of a proposed insured.

MARKET VALUE - The price the property could have been sold at just prior to its damage or loss.

MASONRY NONCOMBUSTIBLE CONSTRUCTION - Buildings constructed from noncombustible materials.

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.

MEDICAL COVERAGE - Coverage to pay a person´s necessary medical expenses when they are injured on your property, whether you are responsible for the injury or not.

MEDICAL PAYMENT - Covers the medical expenses of someone who becomes injured on your property, or injured by you or a family member.

MOBILE HOME INSURANCE - A homeowner policy for a permanently situated mobile home.

MODIFIED FIRE-RESISTIVE CONSTRUCTION - Building construction featuring exterior walls, floors and roofs made of fire-resistant materials.

MORTALITY TABLES – Charts that show the death rates an insurer may reasonably anticipate among a particular group of insured lives at certain ages.

MORTGAGE INSURANCE - A contract that insures the lender against loss caused by a mortgagor’s default on a government mortgage or conventional mortgage.

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.

MORTGAGEE - The person to whom property is mortgaged.

MORTGAGOR - The debtor who receives money and in turn grants a mortgage on his or her 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.

MULTI CAR DISCOUNT - If you insure more than one vehicle on your policy, you may be eligible for a multi car discount. By sharing at least two vehicles among residents of your household you could cut the premiums you pay for bodily injury, property damage, medical payments, comprehensive and collision.

MULTI PERIL INSURANCE - Personal and business property insurance that combines in one policy several types of property insurance covering numerous perils.



NAMED PERIL POLICY - The insurance contract under which covered perils are listed. Benefits for a covered loss are paid to the policy-owner. If an unlisted peril strikes, no benefits are paid.

NAMED PERILS - Causes of loss specifically provided for in the insurance policy.

NAMED INSURED - The party with whom an insurance contract is made.

NATIONAL FLOOD INSURANCE PROGRAM (NFIP) - Federal program providing flood insurance for fixed property.

NATURAL AND PROBABLE CONSEQUENCES - Consequences from a given act that a reasonable person could foresee.

NEGATIVE TREND – with respect to a life and/or health insurer, negative trend over a period of time, as determined in accordance with the “Trend Test Calculation” included in the RBC instructions

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.

NON-RENEWAL - A policy that the insurer does not allow to continue after its expiration date.



OCCUPANCY - The act of holding possession of property.

OCCURRENCE - An accident or loss that results in bodily injury or property damage.

OFF-BALANCE SHEET RISK – a measure of risk due to excessive rates of growth, contingent liabilities or other items not reflected on the balance sheet.

OFF PREMISES - A clause extending coverage to losses that occur when an insured is away from home.

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.

ORDINANCE (or Law Exclusion) - A property coverage exclusion that states there is no coverage for loss or damage that occurs as a direct result of the enforcement of any law or ordinance.

ORIGINAL AGE CONVERSION – A conversion of a term life insurance policy to a permanent plan of insurance at a premium rate, based on the insured’s age when the original term policy was purchased.

OTHER STRUCTURES - Structures such as a garage or tool shed, that are separated from an insured dwelling by a clear space.

OUTBUILDING - Permanently installed structures located on your property but not physically attached to your home.

OTHER STRUCTURES (Coverage B) - Not all structures that exist on your property are actually attached to your house. Therefore, Coverage B offers insurance protection for other structures such as a detached garage, gazebo, or storage shed. You get this coverage automatically, so it does not cost you additional premium to carry this.



PACKAGE POLICY - A combination of two or more separate policies in one contract with one premium.

PARTIAL LOSS - A loss that does not completely destroy the insured property.

PAY IN FULL - Finally, you can save money in the long run if you pay your entire policy in full when you sign up or during renewal. Besides saving on the fees they charge for installment payments, some companies even through in a discount for paying up front.

PERMANENT LIFE INSURANCE – Life insurance that provides coverage throughout the insured’s lifetime and also provides a savings element.

PERIL - The cause of a possible accident, loss or claim.

PERSONAL LIABILITY (or Liability) - Protection that pays for damage or injury you accidentally cause to others and which you are legally responsible for paying.

PERSONAL PROPERTY- Any property of an insured other than real property.

PERSONAL ARTICLES FLOATER (PAF) - Supplements coverage for possessions of higher monetary value, such as a diamond engagement ring, your grandfather's pocket watch, artwork, or a valuable collection. While most homeowners policies have limits on the dollar amount and type of loss that can be recovered, Personal Articles Floater will provide the protection you need for your most valuable possessions in the event of loss through theft, accident or natural disaster.

PHYSICAL DAMAGE - Actual damage to property.

POLICY ANNIVERSARY – As a general rule, the date on which coverage under an insurance policy became effective.

POLICYHOLDER SURPLUS – excess of an insurance company’s assets above its legal obligations to meet the benefits (liabilities) payable to its policyholders. Also, the net worth in an insurance company adjusted for the overstatement of liabilities.

POLICY RIDER – An amendment to an insurance policy that becomes part of the insurance contract and either expands or limits the benefits payable under the contract.

POLICY - A formal written contract of insurance.

POLICYHOLDER - The party to whom an insurance policy is issued

POLICY ANNIVERSARY - Date on which an insurance policy must be renewed to keep coverage.

POOLING – method by which each member of an insurance pool shares in each and every risk written by the other members of the pool.

PREFERRED RISK – A proposed insured who presents a significantly less than average likelihood of loss and who is charged a lower than standard premium rate.

PREMISES - The building insured or containing the insured property.

PREMIUM - The payment that a policyholder makes on an insurance policy to keep coverage.

PRIMARY INSURANCE – first layer property or liability coverage carried by the insured that provides benefits up to the limits of a policy, regardless of other insurance policies in effect.

PROPERTY COVERAGES - Insurance that covers damage to or loss of the policyholder´s property.

PROPERTY DAMAGES - Damage to or destruction of ones property.

PROPERTY DAMAGE LIABILITY - Protection against liability for damage or destruction to another’s property.

PROPERTY INSURANCE - Insurance of ones property against physical loss, damage or the loss of its ability to produce income.
Protection Coverage offered by insurance.



QUICK ASSETS - Assets that can be quickly converted into cash.

QUOTE - The estimated cost of insurance, based on information supplied by the applicant.



RATE(S) - The cost of insurance per unit of coverage.

REAL PROPERTY - Realestate.

RECALL PERIOD - A period of time under a home protection plan, that one can call a service provider and report that a repair failed.

RECORDING AGENT - The insurance agent that sold the policy.

RED-LINING - Discrimination against a risk based purely on its location

REINSTATEMENT - The restoration of a lapsed policy to full force and effect.

RENEWAL - An insurance policy issued to replace one that has expired.

RENTAL VALUE - Insurance Protection against loss of rental value should the owner´s insured property suffer damages prohibiting use of the property.

RENTERS INSURANCE - Property and liability insurance designed to protect apartment renters

REPLACEMENT COST OR VALUE - The cost of replacing damaged property with that of similiar quality.

RESIDENCE EMPLOYEE - An employee who is employed by the insured and whose job duties are directly related to the use or maintenance of the insured’s premises.

RESIDENCE PROMISES - The principal residence of the insured.

REINSURANCE – form of insurance that insurance companies buy for their own protection, “a sharing of insurance.” An insurer (the reinsured) reduces its possible maximum loss on either an individual risk or a large number of risks by giving (ceding) a portion of liability to another insurance company (reinsurer).

REINSURER – insurance company that assumes all or part of an Insurance or Reinsurance policy written by a primary insurance company.

REPLACEMENT COST - The cost of replacing property without a reduction for depreciation. By this method of determining value, damages for a claim would be the amount needed to replace the property using new materials.

REPLACEMENT COST ESTIMATE - 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. (ie., the amount needed to cover the home in the event of a loss.)

HO-290 - REPLACEMENT COST CONTENTS - an endorsement that allows for replacement cost on contents in the home, rather than Actual Cash Value.

RESIDUAL MARKET – Consists of insurance consumers unable to obtain coverage in the voluntary market.

RETENTION LIMIT – A specified maximum amount of insurance that a life insurer is willing to carry at its own risk on any one life without transferring some of the risk to a reinsurer.

RIDER (or Endorsement) - An attachment to an insurance policy that changes the policy’s coverage.

RIOT - Violent activity by a number of people.

RISK – uncertainty of a financial loss; term used to designate an insured or a peril insured against.

RISK BASED CAPITAL (RBC) – the amount of required capital that the insurance company must maintain based on the inherent risks in the insurer’s operations.

RBC INSTRUCTIONS – the RBC Report including risked based capital instruction adopted by the NAIC, as such RBC Instructions may be amended by the NAIC from time to time in accordance with procedures adopted by the NAIC.

RBC RATIO – measurement of the amount of capital (assets minus liabilities) an insurance company has as a basis of support for the degree of risk associated with it s company operations and investments. This ratio identifies the companies that are inadequately capitalized by dividing the company’s by the minimum amount of capital that the regulatory authorities feel is necessary to support the insurance operations.

RBC STATISTIC – ratio of authorized control level risked based capital of an insurance company to its total adjusted capital. This statistic determines regulatory action taken by the state’s insurance commissioner



SAFE DRIVERS - If you have had no chargeable accidents in the past three years, you could qualify for a safe drivers discount. Some companies will even increase the discount if you continue being a safe driver without accidents up to six years and even more for ten years.

SAFFIR SIMPSON SCALE - A 1-5 rating based on a hurricane’s present intensity. This is used to give an estimate of the potential property damage and flooding expected along the coast from a hurricane landfall. Wind speed is the determining factor in the scale.

SCHEDULED PROPERTY - Listing specific personal property for a stated insured value. This is usually considered for valuable items that are subject to limited coverage.

SCHEDULE - A list of individual items covered under one policy.

SCHEDULED PERSONAL PROPERTY - A Listing of specific personal property and each items stated insured value.

SEAT BELTS DISCOUNT - If your car has automatic seat belts in the front drivers and passenger seats, you might save some money on your medical payments coverage.

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 areas can lead to the collapse of buildings and other structures.

SINKHOLE COLLAPSE - The sudden sinking or collapse of land into underground voids.

SMART STUDENT DISCOUNT - If you maintain a “B” average or rank in the top 20 percent of your class, you may be able to save some money on your insurance with a smart student discount. The discount only applies if you are under the age of 25 and unmarried.

SMOKE DAMAGE - Damage caused by the smoke from a fire.

STATED AMOUNT - An agreed upon amount of insurance, that will be paid in the event of a total loss.

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 flares take place in the solar corona and chromosphere, heating the gas to tens of millions of kelvins and accelerating electrons, protons and heavier ions to near the speed of light. They produce electromagnetic radiation across the spectrum at all wavelengths from long-wave radio signals to the shortest wavelength gamma rays. Solar flare emissions are a danger to orbiting satellites, manned space missions, communications systems, and power grid systems.

SYNTHETIC GUARANTEED INVESTMENT CONTRACT – Modified guaranteed investment contract in which the underlying assets of the synthetic contract are owed by the plan itself rather than the insurance company as is the case with the GIC. This ownership rights is of particular importance if there is a concern about the long term financial soundness of an insurance company. The synthetic plan segregates the plan’s assets from the assets of the insurance company.

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.

TENANTS POLICY - Renters Insurance.

TOTAL ADJUSTED CAPITAL - commonly refers to an insurance company's capital base under Standard & Poor's capital adequacy model. It includes shareholders' funds and adjustments on equity, asset values and reserves.

TOTAL LOSS - Loss of the total value of the insured property.

TRAVELERS - The Travelers Companies, Inc. is a leading property casualty insurer selling primarily through independent agents and brokers. Travelers understands that life and business are inherently dynamic and that the best way to serve customers is to deliver insurance in-synch with evolving risks. The company’s diverse business lines offer its global customers a wide range of coverage in the auto, home and business settings. A Fortune 100 company, Travelers has 33,000 employees and generated revenues of approximately $24 billion in 2008. Travelers stock is traded on the New York Stock Exchange (NYSE: TRV) and is a component of the Dow Jones Industrial Average. For more information on being in-synch, visit www.travelers.com.



UMBRELLA POLICY - Umbrella coverage is insurance coverage that extends the terms of a regular insurance policy once coverage limits for the regular policy have been reached. Specifically, umbrella coverage is for people who want protection against a large jury award that is not covered in their standard policy.

UMBRELLA LIABILITY INSURANCE - A policy that insures losses in excess of amounts covered by other policies.

UNDERWRITING – The process of identifying and classifying the degree of risk represented by a proposed insured.

UNDERWRITING RISK – a measure of the risk that arises from under-estimating the liabilities from business already written or inadequately pricing current or prospective business.

UNFRIENDLY FIRE - A fire that escapes from its normal contained area. For example, fire in the fireplace leaps onto the sofa.

UNDERWRITER - The individual who accepts or rejects risks for an insurer.

UNOCCUPIED - Property that is not lived in at the time of a claim.

UNSCHEDULED JEWELRY- Limited coverage for all your household jewelry.

UNSCHEDULED PERSONAL PROPERTY - Provides coverage for personal property owned or used by an insured.



VACANT - A building that is empty.

VANDALISM AND MALICIOUS MISCHIEF (V&MM or VMM) - Willful destruction or damage to your property by others.

VOLUNTARY MARKET – Consists of insurance consumers that insurers select to be provided coverage, using underwriting guidelines that are not unfairly discriminatory. The voluntary market is also called the normal or regular market.



WATER DAMAGE - Insurance against loss or damage due to the accidental presence of water.

WAVE DAMAGE INSURANCE - Coverage for damage to property resulting from high water tides

WIND - Coverage for damage to property resulting from windstorms, hailstorms, tornadoes and hurricanes.

WRITTEN EXPOSURE – The total number of exposures of all policies issued during a given time period.

WRITTEN PREMIUMS - The total premiums generated from all policies written by an insurance company within a given period of time.

  Questions & Answers

When would a Valuable Items policy be needed?

The protection provided for personal property under the typical homeowners policy is very broad, and includes coverage for your furniture, clothing, and appliances. In addition, it provides limited coverage for such items as jewelry, silverware, furs, and firearms. However, it may not cover some types of loss that may be important to you, such as the stone falling out of your diamond ring, your antique statue that is accidentally broken, or a flooded basement that damages your personal computer. In fact, most homeowners policies set dollar limits on the amount of protection offered to cover the theft of items such as jewelry or furs ( usually only up to $1,000), firearms (up to $2,000), or silverware (up to $2,500). Optional add-on coverage to the homeowners policy (like our Valuable Items Plus endorsement) is available to enhance coverage by providing higher limits (up to as high as $50,000 in some cases, but limited to $10,000 per item) and expanded protection for special property. This usually provides most homeowners with enough coverage.

However, if you own extremely valuable items, this still may not be enough coverage. For example, if you own a diamond ring valued over $10,000 or a collection of fine arts valued over $50,000, you need more protection and should consider buying separate Valuable Items policy.

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