Unless otherwise specified in the policy, Actual Cash Value in California indicates Fair Market price. The Fair Market Price of an item is the dollar quantity that a well-informed purchaser (under no unusual pressure) is prepared to pay and a well-informed seller (under no uncommon pressure) is prepared to accept.

Agent

A licensed individual or company licensed to offer and service insurance plan for an insurer.

Aggregate Limit

The optimal dollar quantity of coverage in force for a residential or commercial property damage policy or liability policy. This maximum amount can be figured on a per incident basis or as a general aggregate for the total policy term.

Agreed Value

An approach of loss assessment where the guaranteed and the insurer list a concurred upon total up to be paid in case of loss. This assessment technique is most common in residential or commercial property insurance coverage when insuring valuable art work, antiques, or classic vehicles. An expert appraisal is generally needed.

Arbitration Clause

A clause in an insurance policy that permits the insured and the insurer to each select an arbitrator if they can not concur upon a suitable claim settlement. Once the arbitrators have actually been picked, they in turn designate an independent umpire. If the arbitrators disagree, then the umpire chooses which declares settlement to support. The final choice is binding.

Betterment

A situation that occurs in a loss when an old piece of residential or commercial property is changed by a brand new item. The insured is put in a much better financial position than they were before the loss took place, and consequentially may have to pay the difference in rate for the betterment.

Binder

A short-term arrangement that provides momentary insurance coverage until the policy can be released or delivered.

Broker

A certified person or organization who sells and services insurance coverage authorities on your behalf.

Broker-agent

A certified person who can serve as a representative representing several insurance providers, and also as a broker dealing with several insurance providers representing your interests.

Cancellation

The termination of an in-force insurance coverage agreement by either the guaranteed or the insurer before its typical expiration date.

Claim

Notice to an insurance provider that a loss has taken place that might be covered under the terms and conditions of the policy.

Claim Adjuster

The person who examines the damage triggered by a covered loss and figures out the amount to be paid under the policy terms.

Claims Made

A liability insurance plan where coverage applies to claims filed throughout the policy period anytime the loss happened subject to a retroactive creation date.

Coinsurance

An insurance coverage clause that defines the quantity of each loss that the company pays according to the quantity of insurance brought, divided by the quantity of insurance needed. This basic formula relates to a contracted percentage of coverage that must be required to avoid a coinsurance charge.

Combined Single Limit

When bodily injury liability and residential or commercial property damage liability is revealed as a single amount (limit) of protection.

Commercial Lines

Insurance protections for businesses, business organizations, and professional companies, as contrasted with personal insurance coverage.

Commission

A part of the policy premium that is paid to a representative by the insurance coverage company as settlement for the representative's work.

Concurrent Causation

Occurs when two or more perils cause a loss. When just one of these hazards is covered by the insurance coverage policy, the court usually rules that the whole loss is covered. Many insurance provider have actually reworded their policies to clarify that only a loss credited to a covered danger is certainly covered.

Conditions

The portion of an insurance coverage agreement that states the rights and tasks of the insured and the insurance company.

Consequential Bodily Injury

In Workers Compensation, special scenarios can develop when a job-related injury causes some sort of non-work associated injury. (Please see Loss of Consortium, Dual Capacity, and 3rd party Over glossary definitions.)

Coverage

Protection that is supplied under an insurance plan.

Declarations (DEC) Page

Usually the first page of an insurance plan which contains the complete legal name of the insurance provider, the policy number, reliable and expiration dates, premium payable, the quantity and types of protection, and the deductibles.

Deductible

The amount of the loss that the insured is accountable to pay before take advantage of the insurance coverage are payable.

Depreciation

The real or accounting recognition of the reduction in worth of residential or commercial property over a time period according to a predetermined schedule.

Dual Capacity

In Workers Compensation, an employer may be liable 2 ways to a worker who incurs physical injury on the task as a result of utilizing a product and services produced by that company. The staff member is eligible for Workers Compensation advantages and may likewise sue the company because of the defectiveness of the injuring product or service.

Earned Premium

The portion of the policy premium paid by a guaranteed that has actually been allocated to the insurance business's loss experience, costs, and revenue year to date.

Endorsement

A written contract that alters the regards to an insurance coverage by adding or subtracting protection.

Effective Date

The beginning date of an insurance plan: the date the policy goes in to force.

Exclusion

A legal arrangement in an insurance coverage policy that rejects or restricts protection for specific perils, individuals, residential or commercial property, or locations.

Experience Modification

The modification of premium arising from the usage of experience score. Experience score plans show an insured's past loss experience (generally from the previous 3 years) and uses this experience to customize and identify the prem

The termination date of protection as indicated on an insurance coverage.

First Party

The policyholder (insured) in an insurance agreement.

Flat Cancellation

Cancellation that takes place on the policy effective date. No premium charge is made; however, other charges (i.e., service) might use.

Fraud

An intentionally deceptive act dedicated to obtain an unreasonable or illegal advantage. Fraud usually includes monetary gain.

Frequency

The number of times a loss happens.

Hazard

A situation that increases the possibility or potential seriousness of a loss.

Indemnity

In a residential or commercial property and casualty contract, the objective is to bring back an insured to the very same financial position after the loss that the insured had previous to the loss. In one of the most standard sense, indemnity is compensation for a loss.

Independent Adjuster

An individual or organization that provides claim adjusting services to different insurance companies on an agreement basis.

Insurable Interest

Any interest (most frequently ownership) that an individual, company, or corporation has in a subject of insurance coverage such as a business, structure, or auto, which can be harmed and may trigger the individual, company, or corporation financial loss or other concrete deprivation. Generally, an insurable interest must be shown when a policy is issued and need to exist at the time of loss.

Insurance

A method of moving risk from a person, business, or organization to an insurance company in exchange for the payment of premium. The insurance coverage company devotes to be accountable for covered losses.

Insured

The insurance policy holder(s) entitled to coverage under an insurance coverage policy.

Insurer

The insurance business who provides insurance coverage and consents to pay for losses and provide covered advantages.

Insuring Agreement

The part of an insurance contract that explains what is covered. The guaranteeing contract typically specifies the hazards guaranteed versus, the individual(s) and/or residential or commercial property covered, the residential or commercial property places, and the duration of the contract.