Insurance Glossary

Actual Cash Value – Also referred to as "ACV," actual cash value is the fair market value of property at the time of the loss.

Adjuster – A type of insurance professional that "adjusts" (estimates) insurance losses.

Claim – An insurance claim is the notification that an insured gives to the insurance company that a loss has occurred.

Denial – An insurance denial is the notification from an insurance company that the insured's claim has been refused.

Deductible – An insurance deductible is the amount of money that the insured is responsible for paying toward the claim. This amount has been pre-determined under the terms of the policy. For example, if you have a $500 deductive, you will pay the first $500 of the loss. The insurance company will pay the amount above $500 up to the policy's limits.

Depreciation – Property depreciates over time due to age or wear and tear. Depreciation is the decrease in value of property or personal belongings.

Endorsement – An insurance policy endorsement is a written change that either adds or removes coverage.

Exclusion – Insurance policies often contain exclusions which exclude specific items, damage types, or damage causes from coverage.

Insured – The policyholder.

Insurer – The insurance company.

Peril – Perils are causes of an insurance loss such as a storm, tornado, or fire. Some perils are covered while others may be specifically excluded from coverage.

Policy – An insurance policy is a written contract between an insurance company and the policyholder.

Policy Limit – Insurance policies come with policy limits which are the maximum amount that the insurance company will pay under the policy's terms.

Premium – An insurance premium is the regular, recurring payment for an insurance policy.

Proof of Claim – The proof of claim is written documentation that supports the scope or value of an insurance claim.

Proof of Loss – The proof of loss is a policyholder's sworn statement detailing the loss including information such as date, time, and cause of the loss, value of the loss, and others who have an interest in the property.

Rider – An insurance policy rider is a written change that either adds or removes coverage.

Statute of Limitations – The time period between the date of loss and the deadline for filing a lawsuit involving the claim.