Stephen Hadhazi Hawaii Public Insurance Adjuster
Insurance Claim Glossary
Insurance claims are loaded with unfamiliar words and acronyms. Make your next insurance claim easier by using this glossary to learn the most common insurance terms.
ACV - ACV is an acronym that stands for "actual cash value." ACV is a type of replacement coverage where your belongings will be valued at their current market value. This means a $3,000 sofa purchased three years ago probably isn't going to be valued at $3,000 under ACV. It may be valued significantly lower than what you paid for it due to time, wear and tear, and market conditions at the time of loss. In contrast, if you had guaranteed replacement value coverage, the sofa would be valued at the current cost to replace it with a similar sofa.
Denial - If your insurance claim is denied, the insurance company will send you a claim denial letter telling you that the claim is not valid. Denials are not the final word, however. An experienced public adjuster may be able to support your claim and get that denial reversed.
Deductible - Insurance policies often have a deductible which is your share of the cost toward an insurance claim. For example, a homeowners insurance policy with a $1,000 deductible would require you to pay $1,000 of the cost. The insurance company would then pay for its share of covered losses up to policy limits.
Depreciation - Depreciation refers to an item's loss of value due to market conditions, age, and wear and tear.
Endorsement - Insurance policies can be modified to ensure that you buy adequate coverage. An endorsement is used to add or remove coverage. For instance, if you have an antique collection worth tens of thousands of dollars, a typical homeowners policy would not be sufficient. You'd need to add an endorsement to cover your expensive antique collection.
Exclusion - Exclusions are specific damage types or causes that an insurance policy does not cover. Common exclusions include earthquakes, mudslides, volcanic eruptions, and other earth movements.
Insured - The person or entity that takes out an insurance policy.
Insurer - The company that has issued an insurance policy.
Peril - A covered peril is a type of cause of damage that an insurance company will cover while an excluded peril is a type of cause of damage that an insurance company will not cover.
Policy - A policy is the contract between you and the insurance company. It includes all terms and conditions, coverages, policy limits, costs, and more.
Policy Limit - A policy limit is the maximum amount an insurance company covers either for the entire property or individual items. For example, your policy may have a limit on how much cash it will cover (typically just $500) if your house burns down.
Premium - The amount you must pay each month (or year) for insurance coverage is typically referred to as the "premium."
Rider - A rider is similar to an endorsement. It is used to add or remove coverage.
Statute of Limitations - If you have an insurance loss, you may file a lawsuit related to that loss for a specific length of time known as the statute of limitations. Once the statute of limitations expires, you can no longer file a lawsuit related to your insurance loss.