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additional coverages

provided without additional cost in property contracts. Examples would include payment for debris removal and for a fire dept service charge.

additional living expenses

an indirect loss coverage designed to offset the additional costs of living in temporary quarters while a dwelling is being rebuilt or repaired. Found in homeowners and dwelling policies

adverse selection

the likelihood of the worst possible risks seeking the best possible coverage. For example, a person who seeks to buy insurance for his home following a TV broadcast that a wildfire is three miles away and blowing in his direction.

all risk

covey the company is providing special or open perils coverage on a property policy. "All Risk" is antiquated term that is legally indefensible; because it implies everything is covered when in actuality there are exclusions even with special or open peril coverage

appurtenant structure

a building or structure, other than a dwelling. Ex: detached garage or tool shed


a process under which two parties (the insured and the insurance company) can settle a claim dispute without the need to go to court. Three arbitrators hear arguments from both parties and set the amount hat should be paid under the claim. the determination made by the arbitrators may or may not be binding.

basic perils

a peril or cause of loss form in which 11 named perils can be covered in commercial lines property policies and 9 named perils can be covered in personal lines policies.

betterments and improvements

protection generally provided tenants against loss to additions or changes made at their own expense that enhance the value of the property they occupy.

boatowners policy

a policy covering property and casualty losses associated with owning or using a boat

broad form homewoners

the HO-2

broad perils

a peril or cause of loss form in which 14 named perils plus collapse can be covered in commercial lines property policies and 12 named perils plus collapse can be covered in personal lines forms.

building ordinance

building codes (ordinance or law) dictate how buildings must be constructed to ensure safety and other concerns are met. Financial losses suffered by an insured that result from the imposition of a building ordinance are either not covered or limited in coverage. Adequate coverage can be purchased with an endorsement.


available udner coverage for damage to your auto, collision covers your automobile if it collides with another car, a stationary object or if it overturns.


used in automobile policies. In today's personal auto policy it is known as Other than Collision coverage. It provides "All Risk" type coverage for damage to a car. Most every peril, other than collision, would be covered. Examples include, loss due to: theft, flood, vandalism, and striking an animal.

concurrent causation

the concept in insurance that states that when two perils (one covered and one excluded) damage covered property at the same time that the insurance company will only pay for damage caused by the covered peril.


the conditions section of a policy essentially directs how the policy works. The conditions are the rules of the contract and would detail the process for filing claims, how cancellation works, and other important information of which the policyowner should be aware.

consequential loss

generally an indirect loss. Specifically, an endorsement that can be purchased with an Equipment Breakdown Policy that would cover losses that occur after, and as a result of, a direct loss. Ex: spoilage that occurs after power is lost.

coverage for damage to your auto

originally--physical damage coverage; this is the portion of an Automobile Policy in which the insured would find coverage for damage to their automobile.

covered auto

generally, your auto, the auto named on the Dec Sheet of the Auto policy. Also includes autos acquired during the policy period, trailers, and temporary substitute autos.

debris removal

additional coverage of a property policy which stipulates to what extent the policy will pay for the removal of debris after a covered loss to property as occurred.

declarations sheet/page

the first page of an insurance contract that contains information concerning who is covered, what is covered, when it is coveerd, the amount and cost of coverage, and where covered property is located


the amount of the risk that the insured has retained. If you have a $500 deductible, for example, you have agreed that the first $500 suffered in a covered loss is your responsibility. The purpose of a deductible is to reduce claims and prevent over use of a property policy.


the loss of value of an item over time


a home and more. For insurance purposes a dwelling is considered a house as well as items built-in to the home and items attached to the home.

dwelling policy

a policy to cover a dwelling in which the owner does not reside or for some other reason does not qualify for homeowners coverage.

earthquake endorsement

coverage available at extra cost in a property contract to cover losses due to earthquake and volcanic eruption


losses not covered by a policy, such as Flood and Intentional Losses

Fair Rental value

an indirect loss coverage designed to offset the losses sustained by a landlord following the damage or destruction of a rental property

fire department service charge

an additional coverage automatically provided in both homeowners and commercial property it is the payment made to the fire department to put out a fire. In homeowners that amount is $500. In commercial property, it is $1000.


coverage available under inland marine insurance to cover personal property for more perils and with a better method of valuation than offered in property insurance. Providing worldwide coverage, a floater is called such because the coverage moves or floats along with covered property wherever the property may be.


the covering of normally dry land with water that overflows its banks. Also would include erosion of shorelines, the unusual accumulation of surface water and mudflows. Does not include sewer back-up or wind blown rain.

flood insurance

insurance available to cover floods. Since floods are excluded by most property policies covering real property, flood insurance can be purchased through the national flood insurance program (NFIP). Although sold by insurance companies flood insurance is actually underwritten by the Federal Government.


the criminal act of fraudulently making or altering a document with the intent of depriving others of some right, interest or property.

governmental action

an excluded loss in a property policy caused by the seizure or destruction of property due to the actions of the government. The preventive destruction of property to stop the spread of a covered fire would be covered.


a basic peril covered under windstorm/hail


the series of contracts (HO2 through H08) that provides property and casualty coverage for the exposures of the typical homeowner

insuring agreement

the provision in a contract that contains the insurance company's promise to pay benefits for covered loss

intentional water

friendly water invited into building such as water found in pipes and appliances. Intentional water that suddenly and accidentally damages covered property is a covered peril under the broad peril form.


to have responsibility for damage caused to another person or their property


a basic peril

loss of use

an indirect loss following a covered direct loss. For example, if your home burns down, the amount of money it would cost to rent a hotel room would be considered "Loss of Use"

market value

determining worth on the basis of what someone would pay for the property today. Seldom used in insurance; the notable exception being the HO-8

medical payments

a "no fault" coverage found in homeowners. Commercial general liability policies and automobile policies, medical payments (Med Pay) is designed to pay medical bills, dental bills, and funeral expenses. In homeowners and CGL policies med pay pays for injuries sustained by others, in auto it pays for injuries sustained by insureds as well as passengers in the insured's auto.

mobile homeowners

A policy equivalent in most respects to an HO-2 or HO-3 tailored to meet the needs of mobilehomeowners.

modified coverage form homeowners

the HO-8


quite often the basis of liability claims and is defined as: "The failure to do or not do what a reasonable person would do or not do in the same or similar circumstances."


in automobile insurance simply means to be in or around a car. In property policies occupying a building means that you and your property are in the structure (dwelling or commercial building)

other structures

in a property policy, other structures refer to buildings that are not attached to a dwelling or the primary insured building. In a homeowners policy, a detached garage and a tool shed would be two examples of other structures.

other than collision coverage

the modern day version of comprehensive coverage. It provides coverage for physical damage coverage caused to your car by something other than a collision with another car or stationary object. Ex: theft, contact with bird or animal, flood or glass breakage, plus any other accidental loss not caused by a collision with another car or stationary object.

personal articles floater

coverage available under an inland marine policy for certain items that need more coverage or coverage for more perils that could be obtained under a homeowners policy. Types of items might be furs, cameras, jewelry, and collections

personal automobile policy

a policy purchased to provide coverage on the named insured's auto or on any auto being operated the named insured or any insured family member. A personal automobile policy contains liability coverage plus it may or may not contain property coverage for the car, medical payments coverage, and uninsured/underinsured motorist coverage

personal injury liability

under a commercial general liability policy, personal injury liability refers to damage to an individual's reputation

personal liability policy

another name for section II of a homeowners policy

personal property

sometimes referred to as contents, personal property is that property covered under a homeowners policy that can be easily moved. Ex: clothing, furniture and dishes. Personal property is covered in many locations including your home, in your garage, in your shed, or in your possession.

pollutant clean-up

the portion of the CGL and other liability policies which covers necessary pollution clean-up

reasonable repairs

the company will pay for reasonable repairs made by the insured to protect the property from further damage following a covered loss.


a person related by blood, marriage or adoption and living with the named insured. A child in college is also considered a relative or family member


also known as preservation of property, removal is the action of taking undamaged property from a building damaged by a covered peril and putting it in a place where it is unlikely to sustain further damage. Ex: removing a couch from a storm damaged home and putting it in a storage locker. Property removed is covered both under a homeowners policy and a commercial property policy for 30 days.

replacement cost

in a property policy provides for new property of like kind and quality to replace covered property destroyed or lost due to a covered peril.

residence premises

your home as well as all other structures and the property on which they wit is considered your residence premises under a homeowners policy

right of salvage

if an insurance company declares an insured piece of property to be non-repairable the company can simply pay the insured the value of the item and salvage the damaged property


covered under basic perils coverage. The peril would cover damaged caused by rioters, striking employees and property looted during a riot.

scheduled personal property

an inland marine endorsement to a homeowners policy which provides coverage for items excluded or limited under the basic policy.

single limit

found most frequently within a commercial auto policy, a single limit simply states the total amount the insurance company would pay in a liability claim against an insured driver in a single occurrence without subdividing the amount into bodily injury or property damage coverage as is the case in split limits.

special form homeowners

the HO-3

split limits

used in connection with an auto policy, a split limit simply states the total amount the insurance company would pay in a liability claim against an uninsured driver. Expressed as three numbers such as 25/50/10. The first two numbers refer to Bodily Injury Per Person and Bodily Injury Per Occurrence. The last number is the total amount payable for Property Damage per Occurrence.

Tenants Form Homeowners

the HO-4

theft coverage

not all property policies cover theft since it is a rather broad (and oftentimes high risk) peril. Dwelling policies without a limited theft or broad theft endorsement do not cover theft at all and neither do commercial property policies written with a basic or broad cause of loss form. All homeowner policies cover theft.

underinsured motorist

an at-fault motorist who causes an accident and who, although meeting state liability requirements, does not have enough insurance to pay for the damage they caused. Legal, but inadequate.

vehicle and aircraft damage

a covered basic peril. Vehicle and aircraft coverage would pay for losses to covered property when the property is damaged or destroyed by an aircraft or other vehicle.

volcanic action

a covered basic peril. Volcanic action refers to above ground losses caused by a volcano including ash and lava flow


normally applies to private usage canoes, rowboats, sailboats and motor boats which can be insured under a homeowners, boatowners or yacht policy

water damage

a covered broad peril. provides coverage for property damaged or destroyed by contact with friendly water that has escaped from a pipe or appliance due to leaking or freezing.

weight of ice and snow

a broad form peril covering insured property from damage or collapse due to the weight of ice an and/or snow


a covered basic peril. Windstorm covers damage caused by straight line winds, tornadoes, and, of course, hail.

yacht policy

covers private watercraft that exceed the coverage limits of a boatowners policy.

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