Glossary of Terms

Insurance Terms

Q. What is Actual Cash Value (ACV)?
Actual Cash Value is the cost of replacing damaged property with comparable new property, minus depreciation (decrease in value due to wear, tear and time). For example, a 10-year-old chair will be replaced at its current value – not what it would cost to purchase new – because of a decade of depreciation.

Q. Who is an additional insured?
An additional insured is a person that enjoys the benefits of being insured under an insurance policy, in addition to whoever originally purchased the insurance policy. They must have an insurable interest, and often do not live in the home. It applies where the original named insured person needs to provide insurance coverage to additional individual(s). These individuals may have their interests covered under the policy contract by endorsement, if qualified.

Q. What is a co-applicant?
A co-applicant is an individual(s) who is listed on the title to the property to be insured, and who also permanently resides at the location. These individuals may have their interests covered under the policy contact by endorsement, if qualified.

Q. What is a deductible?
A deductible is the amount of the loss that you take responsibility for as a policyholder.

Q. What is depreciation?
Depreciation is a decrease in an insured item's value due to age and deterioration. For example, a 4-year-old computer will be worth less than what it cost new.

Q. What is an endorsement?
An endorsement is an addition to the basic policy contract. Some endorsements are amendments to the policy contract and others are optional to personalize a policy, usually for an additional premium.

Q. What are exclusions?
Exclusions are conditions that are not covered by the insurance policy contract.

Q. What is a home inventory?
A home inventory is a record of your personal possessions in your home. This could include written information, photos or a videotape of your belongings. We recommend you maintain a complete inventory of your household contents in a safe, secure place – and regularly update it.

Q. What is a hurricane deductible?
A hurricane deductible is the amount of the loss – in this case, caused by a qualifying hurricane event -- that you take responsibility for as a policyholder. People’s Trust offers a wide range of options compared to most other Florida carriers. Higher deductibles (for example, 5 percent or 10 percent) may be available and may result in an overall premium reduction.

Q. What are named perils?
Named perils are the specific perils, or the cause of loss, that are covered under the insurance policy.

Q. What does replacement cost mean?
Replacement cost is the amount needed to replace damaged property without deducting for depreciation. This amount is limited by the dollar amount stated on the declarations page of the policy or as otherwise stated in the policy.