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Insurance Glossary

Actual Cash Value (ACV) – A type of replacement cost coverage where the insurance company pays the fair market value of the property at the time of the loss. For example, while you may have paid $3,000 for a high definition TV five years ago, its actual cash value, or current fair market value today, is likely dramatically less than that. On the other hand, if your policy has guaranteed replacement cost coverage, your insurance company will pay to replace that TV with a similar model on the market today.

Adjuster – An adjuster, also called a claims adjuster, insurance adjuster, or public adjuster, is an insurance professional who estimates insurance losses. Adjusters either work for the insurance company or the public. Harlingen public adjusters work for policyholders, not insurance companies.

Claim – A claim is the official notification of an insurance loss provided to the insurance company by the insured.

Denial – An insurance denial is the official notice that an insurer sends to an insured if a claim has been refused.

Deductible – Most insurance policies have a deductible which is the amount of money that the insured must pay before insurance benefits kick in. For example, a homeowners insurance policy with a $500 deductible will pay for covered losses above that figure up to policy limits with the insured paying the first $500. A claim with a total value of less than $500 will not be paid by the insurance company because it is less than the deductible.
Depreciation – Age and wear and tear cause property to become less valuable. Depreciation is this decrease in value.

Endorsement – You can add or remove coverage from an insurance policy with an endorsement. For example, if you have an extensive fine art collection, you may want to get an endorsement to add additional coverage because most policies limit coverage for fine art collections.

Exclusion – Exclusions are specific items, causes of damage, or types of damages that have been excluded from the policy. For example, earthquakes are typically excluded from standard homeowners insurance policies.

Insured – The policyholder.

Insurer – The insurance company.

Peril – Storms, wildfires, hail stones, falling trees, and other causes of damages are "perils." Not all perils are covered by insurance policies. For example, storms are usually covered perils while earthquakes are usually excluded from coverage.

Policy – the written contract between a policyholder and the insurance company.

Policy Limit – Insurance policies don't offer "unlimited" protection. Policy limits specify the maximum amount that the insurance company will pay under the policy's terms. Note that an insurance policy may have many limits in place for various items such as jewelry, cash, medical payments, art, furs, collections, and other valuables.

Premium – The recurring cost of an insurance policy.

Rider – You can add or remove coverage from an insurance policy with a rider which is also known as an endorsement.

Statute of Limitations – This is the span of time between the deadline for filing an insurance lawsuit and the date of loss.