Commonly Used Insurance Terms

There are specified deductibles for hurricane damage in Florida which must be met before insurance starts paying

Actual Cash Value: “ACV”. This is a term used by insurance companies to pay claims. It is generally known as being the replacement cost of items less depreciation. It is the subject of much controversy in claims handling.

Depreciation is calculated subjectively based upon the age and condition of the property. It accounts for obsolescence, wear & tear, and the remaining useful life of the property in question. Note: Because insurers are generally able to withhold depreciation from insurance claim payments, it has become commonplace for insurers to over-calculate the depreciation (and, thus, pay less on the claim initially as a result).

Adjuster: A representative sent by an insurance company to interact with a person who has made a claim who is sent to evaluate the claim.

Appraisal: A process available under some insurance policies where there is a disagreement on the amount of the loss. Specific policies have controlling language and different jurisdictions allow for different processes.

Appraiser: An appraiser, with respect to the insurance appraisal process, is typically an expert in the field of the repairs needed who is engaged by either the insured or the insurer to set the amount of the covered loss with respect to a claim.

Additional Living Expense: “ALE”. It is money you may be owed under your insurance policy if you need to vacate your property either due to a covered loss or necessary repairs due to a covered loss. It also commonly covers "Loss of Use" and/or "Loss of Rental Income"

Bad Faith: with respect to insurance this is known as unfair or deceptive practices by an insurance company and is the subject of a number of Florida Laws.

Claim: A request to an insurance company for payment pursuant to the policy.

Conditions: these are requirements that must be met by an insured who is seeking coverage.

Common policy conditions included, but are not limited to, compliance with document requests, examination under oath requests, requests for sworn statements in proof of loss, and requests for inspection of the property by the insurer.

Declarations: “Dec. Page”. Declarations are insurance forms that go with an insurance policy that give details of what coverage applies.

Direct Loss: damage that is a result of an occurrence or chain of events that results in coverage under the insurance policy.

Examination Under Oath (EUO): A process authorized by the policy of insurance where an insured, can be placed under oath and questioned by the insurance company, or it’s representative.

Independent Adjuster: This is a third party who is paid to adjust losses on behalf of an insurance company.

Insured: The person or entity covered by an insurance policy.

Insurer: A company that writes and sells insurance

Loss payment clause: A provision that can be found in most insurance policies. The provision addresses how and when claims are to be paid.

Policy: A written contract containing the terms and conditions of the insurance company’s obligations.

Premium: The amount paid for insurance coverage

Primary Insurance: Coverage that is first when more than one policy exists

Proof of Loss: A document detailing the claimed amount by an insured that is given to the insurer regarding a claim. Proofs of loss are very important in a number of different ways and should be handled carefully. Their submission is very often a requirement to receive payment.

Provisions: Differing sections of an insurance policy

Public Adjuster: A licensed individual that adjusts insurance claims on behalf of insureds as opposed to insurance companies.

Public adjusters are generally engaged on the basis of a "contingent fee", meaning they will receive a percentage of amounts you recover from the insurer in your claim. The percentage a public adjuster is allowed to charge is governed by statute in the State of Florida (and, in some states such as Louisiana, public adjusters are not allowed to charge a percentage fee for their services).

Replacement Cost Value: The cost of repairing or replacing damaged property without reduction for depreciation.

Term: The time during which an insurance policy is in effect. This is also commonly referred to as the "policy period", and is generally for a term of one year at a time.

Third Party: Someone other than the policyholder who has experienced loss or is entitled to be paid under the policy

Umpire: An umpire is typically an expert in the field of the repairs needed, who participates in the Appraisal process


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If you have any additional questions or would like to speak with one of our team members about your specific concerns please call us at 833-941-STORM (7867), visit us at 200 Lake Morton Drive, Suite 300, Lakeland, FL 33801 or use the contact form. We are here to help.