​Important Insurance Terms


couple learningYour insurance policy probably ranks right up there with War and Peace on your list of “easy to read” literary works. Here’s a helpful tip: your policy’s Declarations Page gives you a “Cliff’s Notes” overview of your coverage.

We’ve compiled – and defined – a list of commonly used terms to help you shop for and understand the coverage offered through your Florida home insurance policy:

Actual Cash Value

Amount it would cost to replace an item with depreciation due to age and usage deducted.

Additional Living Expense (ALE)

Covers extra cost you incur when your home is deemed unlivable and is being restored. This includes reasonable payments for lodging, food, clothing and other associated expenses. This is also referred to as loss of use coverage. Tip: Make sure to keep your ALE-related receipts to submit for reimbursement.

Adjuster

Evaluates and settles a policyholder’s claim.

Appraisal

Survey that determines a property’s value.

Coverage

A policy’s specified protections for loss or damages up to limits of liability.

Declaration Page

Includes information about the policyholder, policy periods, premiums, and selected coverage.

Deductible

Amount of money a policyholder must pay before they can collect money from their insurance company for a covered loss. In Florida, a homeowner’s insurance policy has two deductibles; one for hurricane damage, which is typically a percentage of your Coverage A amount, and an “all other perils” deductible, which is generally a flat amount. The Declarations Page of your insurance policy lists the dollar amount of both deductibles.

Depreciation

The reduction in your property value due to time and/or normal wear and tear.

Dwelling Coverage

Coverage for your home and attached structures. This is based on the cost to rebuild the home and does not include the value of the land. This means the amount paid for a home in a real estate sale could be different than the dwelling coverage amount.

Flood Insurance

Available from the federal government under the National Flood Insurance Program. It is excluded under homeowners policies.

Personal Property

Term for property or belongings that are portable, such as furniture or jewelry

Personal Property Coverage

Coverage to replace belongings at actual cash value after a loss. This is typically a percentage of the dwelling coverage value. For some items, additional coverage can be purchased.

Reinsurance

Insurance bought by insurance companies. If any one event causes a certain amount of damage to the company’s policyholders, the insurance company pays a certain portion of the costs (similar to how customers pay their deductible), and the reinsurance company/companies pay the rest. Learn more about reinsurance and American Integrity Insurance’s financial stability.

Renter’s Insurance

Purchased by a renter to protect their belongings from events such as fire and theft. Other features can include coverage for personal liability in the event of the policyholder or dependent causing damage to a third party, as well as additional living expenses.

Replacement Cost Value

Amount it would cost to replace an item based on current market prices, meaning depreciation would not be deducted. However, the cost reimbursed would not exceed the maximum dollar amounts shown on the policyholder’s declarations page.

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