Act of God.

An event arising out of natural causes with no human intervention which could not have been prevented by reasonable care or foresight. Examples are floods, lightning, and earthquakes.


Actual Cash Value.

An amount equivalent to the replacement cost of lost or damaged property at the time of the loss, less depreciation. With regard to buildings, there is a tendency for the actual cash value to closely parallel the market value of the property.  


Additional Insured.

A person other than the named insured who is protected under the terms of the contract. Usually, additional insured's are added by endorsement or referred to in the wording of the definition of "insured" in the policy itself. 


Agency Company.

An insurance company that produces business through an agency network. Contrast with Direct Writer. 


Approved Roof.

A term used in building construction. It indicates a roof made of fire-resistive materials, such as tile or asphalt shingles.


Blanket Insurance.

A form of Property Insurance that covers, in a single contract, either multiple types of property at a single location or one or more types of property at multiple locations.


Broad Form.

A term generally used to designate policies that provide insurance for multiple types of perils over and above the usual basic perils, or additional coverage's beyond standard coverages.



Termination of a contract of insurance in force by voluntary act of the insurer or insured in accordance with the provisions in the contract or by mutual agreement.


Catastrophe Hazard.

The hazard of large loss by reason of occurrence of a peril to which a very large number of insured's are subject. An example would be widespread loss due to a hurricane or tornado.



A demand made by the insured, or the insured's beneficiary, for payment of the benefits provided by the contract.



The scope of the protection provided under a contract of insurance.


Date of Issue.

The date stated in a policy as the date on which the contract was issued by the insurer. This is not necessarily the effective date of the policy



A term used in insurance other than Life or Health to denote that portion of the contract in which is stated such information as the name and address of the insured, the property insured, its location and description, the policy period, the amount of insurance coverage, applicable premiums, and supplemental representations by the insured.



The portion of an insured loss to be borne by the insured before he is entitled to recovery from the insurer.


Earthquake Insurance.

Insurance covering damage caused by an earthquake as defined in the contract.



A written or printed form attached to the policy which alters provisions of the contract.



Specific situations, conditions, or circumstances that are listed in the contract as being not covered.


Farm Personal Property.

Scheduled or unscheduled classes of farm property which may be covered by the Farm Property Coverage Form. It may include grain, feed, supplies, livestock, farm machines and farm vehicles. Contrast with Household Personal Property. (PR)


Flood Insurance.

A form of insurance designed to reimburse property owners from loss due to the defined peril of flood. Usually sold in connection with a government Flood Insurance plan.



A specific situation that increases the probability of the occurrence of loss arising from a peril, or that may influence the extent of the loss. For example, accident, sickness, fire, flood, liability, burglary, and explosion are perils. Slippery floors, unsanitary conditions, shingled roofs, congested traffic, unguarded premises, and uninspected boilers are also hazards.


Homeowners Policy.

A Property and Liability Insurance contract that provides insurance against any of the Property and Liability perils to which a homeowner or renter is exposed


Household Personal Property.

The term given to household goods, furniture and personal belongings of residents of a farm dwelling. The Farm Property Coverage Form uses the term "household" to distinguish it from the separate coverage for "farm" property. Contrast with Farm Personal Property.


Insurance to Value.

Insurance written in an amount approximating the value of the property insured.



The party to an insurance arrangement whom the insurer agrees to indemnify for losses, provide benefits for, or render services to. This term is preferred to such terms as policyholder, policy owner, and assured.



The party to an insurance arrangement who undertakes to indemnify for losses, provide pecuniary benefits, or render services. It is desirable to use the word "insurer" in preference to "carrier" or "company" since it is a functional word applicable without ambiguity to all types of individuals or organizations performing the insurance function. The word insurer is generally used in statutory law.



(1) A term used to identify a statement in a policy as to what is insured. In a Fire policy one might refer to the contents item, meaning the coverage in the policy which applies to the contents. (2) An individual entry, such as a piece of jewelry, listed with its description and valuation on a schedule by a policy showing items covered.



Money owed or expected to be owed.



(1) Ages below or above which the insurer will not issue a policy or above which it will not continue a policy presently in force. (2) The maximum amount of benefits payable for a given situation or occurrence, e.g., a limit of $50,000 on the contents of a home, or a $40,000 per accident limit for Property Damage Liability.


Livestock Insurance.

A named perils contract that provides a prescribed lump sum payment to an insured upon the death of any animal covered by the policy.



Generally refers to (1) the amount of reduction in the value of an insured's property caused by an insured peril, (2) the amount sought through an insured's claim, or (3) the amount paid on behalf of an insured under an insurance contract.


Malicious Mischief.

Similar to vandalism. Purposely damaging the rights or property of another.


Mortgage (or Mortgagee) Clause.

A provision attached to a Fire or other direct damage policy that covers mortgaged property, specifying that the loss reimbursement shall be paid to the mortgagee as the mortgagee's interest may appear, that the mortgagee's rights of recovery shall not be defeated by any act or neglect of the insured, and giving the mortgagee other rights, privileges, and duties. For instance, one duty is that the mortgagee must report to the insurer any change in hazards that he becomes aware of.


Notice of Cancellation.

Written notice by an insurer of intent to cancel insurance, or written notice by an insured requesting cancellation. 


Notice of Loss.

Notice to an insurer that a loss has occurred. Notice of loss is a condition of most policies, and it is frequently required within a given time and in a particular manner.



An event that results in an insured loss. In some lines of insurance, such as Liability, it is distinguished from accident in that the loss does not have to be sudden and fortuitous and can result from continuous or repeated exposure which results in bodily injury or property damage neither expected nor intended by the insured.


Other Structures.

Structures, such as a garage or storage shed, which are separated from an insured dwelling by a clear space, or are connected only by a fence or utility line. Dwelling and Homeowner policies provide coverage for other structures.


Package Policy.

Any insurance policy including two or more lines or types of coverages in the same contract. Personal and commercial package policies are very common today. In fact, most policies sold are package policies.



The cause of a possible loss. 


Personal Property.

Any property of an insured other than real property. Homeowner policies protect the personal property of family members.



The price of insurance protection for a specified risk for a specified period of time


Property Insurance.

Insurance that indemnifies a person with an interest in physical property for its loss or the loss of its income producing abilities. This definition encompasses all lines of insurance written by Property and Inland Marine insurers and can also include certain kinds of insurance written by Casualty insurers, e.g., Burglary and Plate Glass coverages.



The reestablishment of the in-force status of a policy, the term of which has expired or will expire unless it is renewed.


Renewal Certificate.

A short form certificate which is used to renew a policy. It refers to the original policy, keeping all of its provisions, but does not restate all of its insuring agreements, exclusions, and conditions.


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.



Usually, a policy benefit or claim payment. It connotes an agreement between both parties to the policy contract as to the amount and method of payment.



The period of time for which a policy or bond is issue



A condition in which not enough insurance is carried to cover the insurable value.



These words are used to refer to the named insured in many of the modernized/personalized policy forms.



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