Insurance terminology can be confusing. We’re here to help with
definitions of insurance terms that are used on this website. Some of
these coverages are optional and may not apply to your policy.
Applies to:
auto,
home,
condo,
renters,
motorcycle, and
RV insurance.
Actual cash value is determined by calculating the cost of repairing
or replacing damaged property, less depreciation and the effects of wear
and tear over time. If an item is damaged beyond repair, actual cash
value reflects the market value of the item before the damage took
place, less depreciation and the effects of wear and tear over time.
If your couch was worth about $200 dollars in a yard sale before it
became damaged, but would currently cost $1000 to replace with a new
couch of similar size and style, the actual cash value of your couch
would probably be around $200, not $1000. Actual cash value is
calculated by subtracting the effects of wear and tear over time, and
depreciation, from the actual replacement cost.
Applies to:
home,
condo,
renters,
Landlord Protection® and
motorcycle insurance.
Actual replacement cost is the amount of money it would cost to
replace a damaged item with a new one at the time of the claim. Actual
replacement cost does not factor in an item’s age and depreciation, or
the effects of wear and tear over time.
If your couch was worth about $200 dollars in a yard sale before it
became damaged, but would currently cost $1000 to replace with a new
couch of similar size and style, the actual replacement cost of your
couch would be around $1000.
Applies to:
home,
condo and
renters insurance.
If you’re unable to live in your home while it’s being repaired or
rebuilt after a covered loss, Safeco additional living expenses helps
pay the cost of temporary housing and living expenses, for up to 24
months.
Applies to:
boat and
classic car insurance.
When you take out or renew your insurance policy, we agree on a value
your boat, personal watercraft or classic car is worth. If we agree
your boat is worth $10,000 and it is declared a total loss after an
accident or theft, we’ll pay you $10,000. There’s no complicated formula
involving the effects of age, wear and tear that will make a total loss
payment less than the agreed value. It’s simple.
Applies to:
auto,
motorcycle and
umbrella insurance.
Helps pay for bodily injury expenses, like hospital bills and medical
care, that you may be held responsible to pay if you cause an accident
that injures someone else.
Applies to:
boat insurance.
Helps pay for expenses related to injuries or property in a covered
loss involving your boat or personal watercraft. Safeco broad form
liability also covers some accidental watercraft fuel spills and
wreckage removal.
Applies to:
home,
condo, and
motorcycle insurance.
C.L.U.E. (Comprehensive Loss Underwriting Exchange) is a claims
history database that contains up to five years of personal auto or
personal property claims history. It’s used by insurance companies, like
us, to research the claims history of a property they’re considering
underwriting or rating for an insurance policy. If you’re a prospective
home buyer, you can request a copy from the seller of a home you’re
interested in buying.
You can order a C.L.U.E. report from: LexisNexis Personal Reports or call 866-312-8076.
Applies to:
auto,
classic car,
motorcycle and
RV insurance.
Pays to repair damage to your vehicle that is caused by an accident
involving other vehicles and objects like guard rails, sign posts, trees
and buildings. It does not cover damage to another driver’s vehicle.
Applies to:
auto,
classic car,
motorcycle and
RV insurance.
Pays to repair or replace your vehicle if it is stolen, vandalized or
damaged in some way other than in a collision. Includes loss or damage
from fire, flood, falling objects, wind, hail and collision with an
animal.
Applies to:
auto,
classic car,
motorcycle and
RV insurance.
Compulsory coverage is any insurance required by state law.
Requirements for different types and amounts of insurance coverage vary
from state to state.
Applies to:
motorcycle insurance.
Helps pay for repairs or replacement of your motorcycle’s aftermarket parts and accessories.
Applies to:
auto,
home,
condo,
renters,
boat,
classic car,
motorcycle,
RV ,
and
umbrella insurance.
The amount of money you agree to pay out-of-pocket for a claim is
called your deductible. The deductible you choose often affects how much
you pay for your insurance. A higher deductible usually means a lower
insurance bill. In the case of a covered loss, you’ll only be required
to pay your deductible, and the insurance company will cover the excess,
up to the amount specified in your policy.
For example, if the total cost to repair your boat is $1,000 and you
have a $500 deductible on your boat insurance policy, you’ll need to pay
$500 of the $1,000.
Applies to:
home insurance.
Equipment breakdown coverage is a type of home warranty that extends
to your essential home systems and appliances. It provides protection in
the event of an unexpected mechanical or electrical breakdown not
caused by normal wear and tear or corrosion. Equipment breakdown
coverage can be used to replace costly and confusing coverage provided
by home warranties and big-box retailer extended warranties. It’s an
alternative way to protect both your belongings and your budget.
Applies to:
auto.
GAP is loan and lease protection. It covers the difference between
how much is left on your loan or lease and how much your car is actually
worth if it’s declared a total loss.
Applies to:
home,
condo and
renters insurance.
Identity theft occurs when someone steals your personal information
and uses it to open accounts or incur charges without your permission.
Thieves can access your personal information in a variety of ways, such
as stealing your personal mail, your wallet or hacking your computer
files. A thief can use your identity to rack up debt in your name or get
a fake driver’s license. For more information on identity theft and
tips on prevention visit the Federal Trade Commission’s Fighting Back
Against Identity Theft website.
Providing indemnity means to financially restore someone after a loss, through payment, repair or replacement.
A Credit-Based Insurance Score (CBIS) is derived from information on
your credit report. It is a number that measures the likelihood of
having an insurance claim, not a measure of credit worthiness. Insurers
use CBIS along with a number of other factors, including driving
records, claims history, and the type of home or vehicle you own, to
evaluate new and renewal auto and homeowner insurance policies.
Applies to:
home,
and
condo insurance.
Insurance to value is a ratio that reflects the relationship between
insurance coverage limits and the actual cost to completely rebuild,
repair or replace a covered item after a total loss. Insurance companies typically
require 100 percent insurance to value, meaning your policy limits are
sufficient to replace the covered property in the event of a total loss.
Applies to:
auto,
home,
condo,
renters,
boat,
classic car,
motorcycle,
RV ,
and
umbrella insurance.
Liability limit is the maximum dollar amount your insurance policy
will cover for liability. For example, if your auto insurance has
liability limits of 25/50/25, the maximum dollar amount your policy will
pay is $25,000 for a person injured in an accident, a combined total of
$50,000 for all people injured in a single accident, and $25,000 for
property damage. Minimum liability limit is the compulsory, or the
minimum amount of auto liability insurance you’re required to have in
your state.
Applies to:
condo insurance.
Loss assessment coverage helps protect you from paying out of pocket
for damage or liability that exceeds your condominium association master
policy limits. When you own a condominium, and damage to community
owned property costs more than it’s insured for, you and other condo
owners could be responsible for paying the difference out of pocket.
Loss assessment coverage helps compensate for this out-of-pocket
difference.
Applies to:
auto,
classic car,
RV ,
home,
condo and
renters insurance.
For property: Loss of use means you are unable to live in your home while it is being repaired or rebuilt.
For vehicles: Loss of use means you are unable to drive your car or RV while it is being repaired.
Additional living expenses and rental car reimbursement are two types of loss of use coverage.
Applies to:
home, and
condo insurance.
The market value of your home is based on current economic
conditions, school districts, the value of the land, location, and other
factors. It’s the price your home would sell for if you put it up for
sale. Market value should not be confused with your home’s replacement
value.
Applies to:
auto,
classic car,
boat,
motorcycle,
RV ,
home,
condo, and
renters insurance.
For auto, classic car, boat, motorcycle and RV: Medical payments
helps cover hospital bills and medical care expenses for you or your
passengers injured in an accident, no matter who is at fault. MedPay for
boat also includes injuries from water-skiing and wake-boarding.
For home, condo and renters: Medical payments help cover hospital
bills and medical care expenses for guests if they are injured on your
property. In certain situations it also helps cover people who are
injured off of your property. It does not cover healthcare costs for you
or other members of your household.
Applies to:
boat insurance.
Personal effects coverage protects your clothing, scuba and
snorkeling gear, fishing equipment and other personal items from damage
and theft.
Applies to:
auto and
motorcycle insurance.
Personal injury protection or PIP helps pay for hospital bills and
medical care expenses for you and your passengers injured in an
accident, no matter who was at fault. Florida requires personal
injury protection as part of your auto or motorcycle insurance coverage.
Applies to:
home,
condo and
renters insurance.
If someone other than a family member is injured or property is
damaged and you are held legally responsible, personal liability
coverage helps cover the cost of hospital bills, medical treatment or
repairs you may be obligated to pay for.
Applies to:
home,
condo and
renters insurance.
Your home is filled with furniture, clothes, sports equipment, and
other items that mean a lot to you. Personal property replacement cost
coverage will help pay for the actual cost to replace your personal
belongings that are lost, stolen or destroyed as a result of an insured
event.
Applies to:
boat insurance.
A personal watercraft, or PWC, is a floating recreational vehicle on
which you ride by sitting or standing, as opposed to riding inside a
cabin or cockpit like with a boat. Models have an inboard engine driving
a pump jet that has a screw-shaped impeller to create thrust for
propulsion and steering. Popular personal watercraft include Jet Ski®,
WaveRunner®, Sea-Doo® and AquaTrax®.
Applies to:
auto,
motorcycle,
classic car,
RV and
boat insurance.
For auto, motorcycle, classic car and RV: Physical damage is a
general term that includes both comprehensive and collision coverage.
For watercraft: Physical damage helps pay to repair damage to your
watercraft caused by an accident. It also generally pays to repair or
replace your watercraft for insured situations such as theft, fire,
vandalism or other non-collision damages that occur in or out of the
water.
Applies to:
auto,
home,
condo,
renters,
boat,
classic car,
motorcycle,
RV , and
umbrella insurance.
Your insurance premium is the total cost or amount you pay in
exchange for one term of policy coverage. One term of policy coverage is
usually six or 12 months.
Applies to:
home insurance.
Helps cover the cost to repair or rebuild your home if it’s damaged
or destroyed by something your insurance policy covers, like a kitchen
fire or a tree falling through the roof. This is the main component of
home insurance.
Applies to:
auto,
home,
condo,
renters,
boat,
classic car,
motorcycle, and
RV insurance.
A total loss is declared when the cost of repairs will be greater
than the total current market value of your vehicle or property. Model,
year, mileage, condition, options, school districts, land value,
location and your local market area are all factors in deciding if your
property or vehicle is a total loss. Sometimes a total loss is simply
called totaled, as in “My car was totaled.”
Applies to:
umbrella insurance.
An umbrella insurance policy is an additional layer of liability
coverage that may cover you when your other insurance policies, such as
homeowner’s and auto, have exhausted the maximum amount they will pay
for liability claims.
Applies to:
boat insurance.
Pays to repair or replace equipment that is not permanently attached
to your boat or personal watercraft. This includes items like anchors,
oars, life jackets, water skis and sports equipment but is different
than personal effects like clothing, scuba gear and fishing equipment.
Applies to:
umbrella insurance.
When an umbrella policy is adding protection to another insurance
policy, like your auto insurance for example, your auto insurance is the
underlying insurance policy. Any and all of your other policies being
protected by umbrella insurance are considered underlying insurance
policies.
Applies to:
umbrella insurance.
When an umbrella policy is adding protection to another insurance
policy, like your auto policy for example, the underlying liability
coverage is the maximum amount your auto policy will pay for liability
claims.
Underwriting is the process your insurance company uses to assess
risk when deciding whether to issue a policy of insurance to a customer.
Applies to:
auto,
classic car,
motorcycle,
RV and
umbrella insurance.
Helps pay for damages associated with bodily injury or death from an
accident caused by an uninsured, underinsured or hit-and-run driver.
Specifics of what is covered by these terms can vary from state to
state. It may also cover you if you are hit as a pedestrian.
Applies to:
home,
condo and
renters insurance.
Personal belongings you specify are protected by an agreed dollar
amount. If you have special possessions like jewelry, fine art, antiques
or collectibles, you may need this type of extra protection. There is
no deductible applied to valuable articles coverage claims.
Contact us for all your Insurance needs! (321)725-1620
Bob Lancaster Insurance
Serving Florida since 1964
