Unless otherwise defined in the policy, Actual Cash Value in California implies Fair Market price. The Fair Market Price of an item is the dollar amount that an educated purchaser (under no uncommon pressure) is ready to pay and an experienced seller (under no uncommon pressure) is ready to accept.

Agent

A certified individual or organization authorized to sell and service insurance plan for an insurance company.

Aggregate Limit

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

Agreed Value

An approach of loss assessment where the insured and the insurance provider list an agreed upon total up to be paid in case of loss. This valuation approach is most common in residential or commercial property insurance coverage when insuring valuable artwork, antiques, or traditional autos. A professional appraisal is usually needed.

Arbitration Clause

A clause in an insurance plan that allows the insured and the insurance company to each appoint an arbitrator if they can not agree upon a suitable claim settlement. Once the arbitrators have actually been chosen, they in turn select an independent umpire. If the arbitrators disagree, then the umpire decides which claims settlement to support. The last decision is binding.

Betterment

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

Binder

A short-term contract that supplies momentary insurance coverage till the policy can be issued or delivered.

Broker

A certified individual or company who sells and services insurance coverage cops on your behalf.

Broker-agent

A licensed person who can serve as an agent representing one or more insurance providers, and also as a broker handling one or more insurance companies representing your interests.

Cancellation

The termination of an in-force insurance coverage contract by either the insured or the insurance provider before its typical expiration date.

Claim

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

Claim Adjuster

The person who evaluates the damage triggered by a covered loss and identifies the quantity to be paid under the policy terms.

Claims Made

A liability insurance policy where protection applies to claims submitted throughout the policy duration no matter when the loss occurred subject to a retroactive inception date.

Coinsurance

An insurance coverage clause that defines the amount of each loss that the company pays according to the amount of insurance brought, divided by the amount of insurance coverage needed. This standard formula connects to a contracted portion of protection that should be required to prevent a coinsurance charge.

Combined Single Limit

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

Commercial Lines

Insurance coverages for organizations, commercial organizations, and professional organizations, as contrasted with individual insurance.

Commission

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

Concurrent Causation

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

Conditions

The portion of an insurance contract that sets forth the rights and tasks of the insured and the insurance provider.

Consequential Bodily Injury

In Workers Compensation, special situations can emerge when a work-related injury triggers some sort of related injury. (Please see Loss of Consortium, Dual Capacity, and Third Party Over glossary definitions.)

Coverage

Protection that is offered under an insurance coverage.

Declarations (DEC) Page

Usually the first page of an insurance coverage that consists of the complete legal name of the insurance business, the policy number, efficient 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 benefits from the insurance plan are payable.

Depreciation

The actual or accounting recognition of the reduction in worth of residential or commercial property over a duration of time according to a fixed schedule.

Dual Capacity

In Workers Compensation, an employer may be accountable two methods to a worker who incurs physical injury on the task as a result of using an item or service produced by that company. The worker is qualified for Workers Compensation benefits and might also take legal action against the employer because of the defectiveness of the hurting services or product.

Earned Premium

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

Endorsement

A written arrangement that changes the terms of an insurance plan by including or deducting coverage.

Effective Date

The starting date of an insurance coverage policy: the date the policy enters to force.

Exclusion

A contractual arrangement in an insurance plan that rejects or limits coverage for specific hazards, individuals, residential or commercial property, or locations.

Experience Modification

The change of premium arising from making use of experience ranking. Experience ranking plans reflect an insured's past loss experience (generally from the previous three years) and uses this experience to customize and figure out the prem

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

First Party

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

Flat Cancellation

Cancellation that happens on the policy reliable date. No premium charge is made