Knowledge is power. If you're familiar with the common industry insurance terms you'll be better equipped to negotiate for the best renters insurance coverage.
Actual Cash Value (ACV) Present property cash value. This is equal to the replacement cost minus depreciation.
Annual LimitThe maximal amount that your insurer will pay out to you in any calendar year.
AppraisalAn evaluation to determine the insurable value of property or to determine the amount of a loss.
ClaimA demand to recover for a loss covered by an insurance policy.
ConditionsThe provisions of an insurance policy stating your rights and duties and those of the insurance company.
CoverageA synonym for insurance, indicating specifically, how much protection the insurance provides. This may mean either the dollar amount purchased or the type of loss covered.
DeductibleThe amount of money the policyholder agrees to pay toward the total amount of an insured loss before the insurance company pays.
DepreciationThe decrease in the value of property due to wear, tear and age.
Effective DateThe actual calendar date that marks when your renters insurance policy goes into effect.
EndorsementAn amendment attached to an insurance policy that adds to or changes the terms of the policy contract.
ExclusionAn event or type of loss that your insurance policy does not cover.
Grace PeriodSpecified length of time during which a renters insurance policyholder can pay off an overdue balance while maintaining coverage. In general, insurers set grace periods at around 30 or 31 days, although some carriers depart significantly from this standard.
Liability CoverageInsurance coverage for bodily injury and property damage.
Limit of LiabilityThe maximum amount of damages that you have to pay in the event of a loss.
LimitsThe maximum amount of insurance that will be paid for a covered loss.
PerilSomething that might cause loss or damage. Typical perils covered by HO-4 policies (renters insurance) include explosions, vandalism, theft, volcanic eruptions, falling objects, water-related damage from your appliances and electrical surge damage.
Qualifying EventA situation or event that triggers your coverage. For instance, a burglarly break-in, apartment fire or burst pipe.
Replacement Cost on ContentsAn endorsement that insures for actual replacement cost rather than actual cash value, which only covers the replace cost minus depreciation.
Rider (Endorsement)A written form or statement that alters or restricts your insurance contract.
Total LossA loss so large that no value is left in the property or possessions. In other words, the property and possessions are completely destroyed. The term can also be used as a synonym for a loss that merits paying out the maximum amount on a policy.
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