Home Insurance Glossary A-C
Act of God
An unpreventable accident or event that is the result of natural
causes; for example, floods, earthquakes, or lightning.
Actual Cash Value
An amount equal to the replacement cost of lost or damaged property at
the time of loss, less depreciation.
Additional Insurance
Insurance that supplements an already existing policy. It is uncommon
that the company or its duly authorized agent allows additional
insurance.
Additional Living Expense
Any necessary increase in living expenses incurred by the insured, so
the household can maintain its normal standard of living.
Applicant
A person who fills out and signs a written application for insurance.
Application
A written statement by a prospective policyholder that gives the
information the company relies upon when evaluating the applicant and
issuing the policy.
Appraisal
A survey by a Liberty Mutual Claims Representative or Claims Appraiser
estimating the amount of damage to property and the cost to repair or
the determination of a complete loss.
Basic Limits
The lowest coverage amount, as prescribed by law or the company, for
which an insurance policy can be written. Basic Limits primarily
prescribe limits of liability.
Cancellation
Termination of an insurance contract before its expiration date by
either the insurance company or the policyholder.
Catastrophe
A sudden, severe disaster that causes a large loss.
Claim
A demand for payment under an insurance contract for the estimated or
actual amount of loss.
Conditions
Provisions that set forth the rights, duties, and responsibilities of
the parties to an insurance contract. Conditions may be found
anywhere in the contract.
Coinsurance Clause
A clause requiring the insured maintains insurance on the property at
least equal to a stipulated percentage of its value in order to
collect partial losses in full.
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