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

Agent

A licensed person or organization licensed to sell and service insurance policies for an insurer.

Aggregate Limit

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

Agreed Value

A technique of loss valuation where the guaranteed and the insurer list a concurred upon total up to be paid in case of loss. This valuation approach is most typical in residential or commercial property insurance when guaranteeing important artwork, antiques, or traditional vehicles. A professional appraisal is generally needed.

Arbitration Clause

A clause in an insurance coverage policy that allows the insured and the insurance provider to each select an arbitrator if they can not agree upon an appropriate claim settlement. Once the arbitrators have actually been picked, they in turn designate an independent umpire. If the arbitrators disagree, then the umpire decides which claims settlement to support. The last choice is binding.

Betterment

A circumstance that takes place in a loss when an old piece of residential or commercial property is replaced by a brand brand-new item. The insured is put in a better financial position than they were before the loss took place, and consequentially may need to pay the difference in price for the betterment.

Binder

A short-term contract that offers short-term insurance coverage until the policy can be issued or provided.

Broker

A certified individual or company who offers and services insurance polices in your place.

Broker-agent

A certified individual who can act as a representative representing several insurance providers, and also as a broker dealing with one or more insurance providers representing your interests.

Cancellation

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

Claim

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

Claim Adjuster

The person who examines the damage brought on by a covered loss and determines the amount to be paid under the policy terms.

Claims Made

A liability insurance coverage where coverage uses to claims filed during the policy duration anytime the loss took place subject to a retroactive creation date.

Coinsurance

An insurance coverage clause that specifies the quantity of each loss that the business pays according to the quantity of insurance coverage carried, divided by the amount of insurance needed. This standard formula relates to a contracted percentage of coverage that need to 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 coverages for services, industrial institutions, and professional companies, as contrasted with personal insurance.

Commission

A part of the policy premium that is paid to an agent by the insurance provider as compensation for the agent's work.

Concurrent Causation

Occurs when two or more dangers trigger a loss. When just one of these hazards is covered by the insurance coverage, the court usually rules that the whole loss is covered. Many insurance companies have reworded their policies to clarify that only a loss attributed to a covered peril is indeed covered.

Conditions

The part of an insurance agreement that sets forth the rights and tasks of the insured and the insurer.

Consequential Bodily Injury

In Workers Compensation, unique situations can occur when a work-related injury causes some sort of non-work associated injury. (Please see Loss of Consortium, Dual Capacity, and Third Party Over glossary definitions.)

Coverage

Protection that is supplied under an insurance coverage policy.

Declarations (DEC) Page

Usually the very 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 kinds of coverage, and the deductibles.

Deductible

The quantity of the loss that the insured is responsible to pay before take advantage of the insurance policy are payable.

Depreciation

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

Dual Capacity

In Workers Compensation, a company might be accountable two ways to a staff member who sustains physical injury on the job as an outcome of utilizing a service or product produced by that company. The employee is eligible for Workers Compensation benefits and may likewise sue the employer because of the defectiveness of the hurting services or product.

Earned Premium

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

Endorsement

A written arrangement that changes the regards to an insurance coverage by adding or subtracting protection.

Effective Date

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

Exclusion

A contractual provision in an insurance policy that denies or restricts coverage for certain hazards, persons, residential or commercial property, or locations.

Experience Modification

The modification of premium resulting from using experience rating. Experience ranking strategies reflect an insured's past loss experience (usually from the previous three years) and uses this experience to customize and determine the prem

The termination date of coverage as shown on an insurance plan.

First Party

The insurance policy holder (insured) in an insurance contract.

Flat Cancellation

Cancellation that takes location on the policy efficient date. No premium charge is made