New to homeowners’ insurance? You’re not alone. The right homeowner insurance policy can protect your property and its possessions from substantial losses due to unexpected events, such as theft, fire, vandalism, and more. It’s a smart tool to help save money in the long run.
However, to obtain home insurance coverage, policyholders have to pay premium that differs among insurance companies. If you want to maximum coverage
at the most rate, it’s important for you to understand home insurance lingo. This will help you understand what’s covered and what’s not covered in your policy.
The following is a list of the most frequently used home insurance terms:
An unexpected or unintentional event that causes damage or losses to your property and possessions.
Actual cash value
This is the actual or market value of your residence and possessions before and after a loss. It’s the cost of repairing or replacing a damaged home and its possessions, minus the diminished value from its age or wear and tear.
Apart from basic coverage, you can sign up for additional or extra coverage to protect certain items. For example, some homeowners get additional coverage for protecting their valuable items, such as jewelry or artwork.
Additional living expense
If your home has been damaged and you can no longer live there, your home insurance company will reimburse you for temporary living expenses, which includes the cost of a motel room, etc.
The difference between home improvements (you made) and the value lost by your home.
An individual or organization covered by insurance.
When an insured demand for payment of insurance benefits, they will file a claim.
An individual who calculates home insurance claims is known as an adjuster. They can work for an insurance company or independently.
The smallest home insurance policy an individual can purchase in their state. You will find basic limit in a liability policy.
A blanket policy is a policy that offers coverage for multiple properties.
The scope of financial protection mentioned in your homeowners’ insurance policy. Coverage varies from one insurance company to another company.
A decline in a property’s value over some time period due to wear and tear.
Unlike a standard policy, a dwelling policy offers coverage for specific types of risks, such as fire, explosion, vandalism, lightning and more. However, it excludes liability coverage.
Exclusions are risks not covered by your homeowners’ insurance policy.
It’s a written contract for home insurance. As the insurance contract specifies the premium, coverage and exclusions, go over it thoroughly.
Premium is the amount of money your homeowners’ insurance company will charge you. Companies use different factors, including the value of a home, an applicant’s personal information, and more, to determine premium.
The chance of loss from specific events. Generally speaking, the greater the risk, the higher the premium.
This type of property insurance offers coverage for rental properties.