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

Agent

A certified individual or organization licensed to sell and service insurance plan for an insurance business.

Aggregate Limit

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

Agreed Value

An approach of loss evaluation where the guaranteed and the insurance company list a concurred upon total up to be paid in case of loss. This assessment technique is most typical in residential or commercial property insurance coverage when guaranteeing valuable artwork, antiques, or timeless autos. A professional appraisal is typically required.

Arbitration Clause

A stipulation in an insurance plan that enables the insured and the insurer to each designate an arbitrator if they can not concur upon a proper claim settlement. Once the arbitrators have been chosen, they in turn select an independent umpire. If the arbitrators disagree, then the umpire chooses 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 changed by a brand new item. The insured is put in a better financial position than they were before the loss occurred, and consequentially might need to pay the difference in price for the betterment.

Binder

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

Broker

A licensed person or organization who offers and services insurance coverage polices on your behalf.

Broker-agent

A certified individual who can function as a representative representing several insurance companies, and also as a broker handling several insurance providers representing your interests.

Cancellation

The termination of an in-force insurance contract by either the guaranteed or the insurance company before its typical expiration date.

Claim

Notice to an insurer that a loss has actually happened that might be covered under the terms of the policy.

Claim Adjuster

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

Claims Made

A liability insurance plan where coverage applies to claims submitted during the policy period no matter when the loss happened based on a retroactive creation date.

Coinsurance

An insurance clause that defines the quantity of each loss that the business pays according to the quantity of insurance coverage carried, divided by the quantity of insurance required. This standard formula associates with a contracted portion of coverage that must be required to prevent a coinsurance penalty.

Combined Single Limit

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

Commercial Lines

Insurance protections for companies, business organizations, and expert organizations, as contrasted with personal insurance coverage.

Commission

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

Concurrent Causation

Occurs when 2 or more perils cause a loss. When just one of these perils is covered by the insurance coverage policy, the court normally rules that the entire loss is covered. Many insurance companies have actually reworded their policies to clarify that only a loss associated to a covered hazard is certainly covered.

Conditions

The portion of an insurance contract that sets forth the rights and duties of the insured and the insurer.

Consequential Bodily Injury

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

Coverage

Protection that is supplied under an insurance coverage.

Declarations (DEC) Page

Usually the very first page of an insurance plan that contains the full legal name of the insurer, the policy number, reliable and expiration dates, premium payable, the amount and kinds of protection, and the deductibles.

Deductible

The quantity of the loss that the insured is responsible to pay before advantages from the insurance coverage policy are payable.

Depreciation

The actual or accounting recognition of the decrease in value of residential or commercial property over an amount of time according to a fixed schedule.

Dual Capacity

In Workers Compensation, an employer may be accountable 2 ways to a worker who sustains physical injury on the job as an outcome of using a service or product produced by that company. The employee is qualified for Workers Compensation benefits and might likewise sue the company due to the fact that of the defectiveness of the hurting product and services.

Earned Premium

The part of the policy premium paid by a guaranteed that has been assigned to the insurance coverage company's loss experience, expenses, and revenue year to date.

Endorsement

A written agreement that changes the regards to an insurance plan by adding or deducting coverage.

Effective Date

The starting date of an insurance plan: the date the policy goes in to require.

Exclusion

A contractual provision in an insurance coverage policy that denies or limits coverage for particular hazards, individuals, residential or commercial property, or places.

Experience Modification

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

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

First Party

The policyholder (insured) in an insurance contract.

Flat Cancellation

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