Home insurance is very important, but it can also be very confusing for those who are not familiar with its specific terms.
This brief guide will provide you with a basic glossary of words you need to master in order to navigate the world of home Insurance with more confidence.
A note about how to use the glossary: Words in italics have their own entries, so it’s important to check them when you come across them while you read a definition.
Actual Cash Value (ACV)
This is the cost of repairing or replacing property after a loss, minus depreciation. This value is calculated by taking how much it would cost to buy your property today and subtracting depreciation considering factors such as wear and tear. This allows the insurance company to pay you the exact amount your property was worth when the loss occurred.
Adjuster
This person represents the insurance company and investigates your claim. After looking into the matter, they’ll help determine the amount you should receive as compensation.
Claim
A claim is the request you make to the insurance company to compensate you after a loss. If the company validates the claim with the help of their adjuster, you’ll receive a payment.
Declarations
This term is widely used, but in home insurance it refers to the part of a policy that describes the insured property, states your name, address, the amount of the premium and the period during which the policy is in force. This section is colloquially known as the “dec page”.
Depreciation
This is a decrease in the value of your property over time due to damage, wear and tear or becoming obsolete. This factor is important to determine your property’s Actual Cash Value (ACV).
Liability Insurance
This part of your home insurance helps you pay for damages or injuries that occur on your property. For example, this may be useful in case someone slips on your floor.
Loss
Any damage to your property that the insurance company agrees to cover.
Policy/Policy Owner
A policy is the written contract between the insurance company and you, the policy owner. This document details what type of incidents and damages are covered, so you must read it carefully and make sure you understand its terms.
Renters Insurance
This type of insurance provides coverage for those renting the place where they live. Renters insurance usually provides coverage for your belongings, and it may also cover certain lawsuits against you.
Now that you have gained a foothold in the world of home insurance, it’s time to contact an expert to further your knowledge and get the coverage that best fits your needs.
At Delgado’s Insurance we’re driven to protect your most valued possessions. Contact us today by telephone (Riverside: 951-361-0084 Bloomington: 909-421-9003), email or through our social media accounts on Facebook, Twitter and LinkedIn to learn more about our services.
