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Property Insurance
Insurance that covers losses to personal property.
Real Property
The actual structure or buildings, such as houses or commercial buildings.
Personal Property
Movable contents within a building, including clothes, appliances, and furniture.
Scheduled Coverage
A type of insurance policy that lists specific items or details that are covered.
Blanket Coverage
A type of insurance policy that covers items without a detailed list of what is covered.
Limits of Insurance
The maximum amount an insurance policy will pay for a covered occurrence.
Named Peril
An insurance policy that covers only the perils specifically listed in the policy.
Open Peril
An insurance policy that covers all risks of direct physical loss except those specifically excluded.
Basic Perils Policy
The least expensive insurance policy that covers essential risks such as fire, lightning, and explosion.
Extended Coverage
Additional coverage for perils like wind, civil commotion, and vandalism that may extend beyond basic perils.
WC Schaeffer
A mnemonic to remember the basic perils covered under a basic policy.
Broad Perils Policy
A named peril policy that covers all basic perils plus additional perils identified by the acronym BIG Effect.
BIG Effect
An acronym representing additional perils covered under a broad policy, including Burglary and Ice damage.
Special Perils Policy
An all-risk policy that covers everything except for a few specific exclusions.
Direct Loss
Immediate damage caused directly by a peril.
Indirect Loss
Loss resulting from a direct loss, such as additional living expenses incurred while a home is being repaired.
Class 1 construction
Frame construction built of wood, most likely to catch fire.
Class 2 construction
Jointed masonry, constructed of concrete or brick.
Class 3 construction
Non combustible construction primarily made of metal.
Class 4 construction
Masonry non combustible, meaning the roof and floor do not contain wood.
Class 5 construction
Modified fire resistive class, rated at 2 hours or less.
Class 6 construction
Fire resistive class, rated at 2 hours or more.
Actual Cash Value (ACV)
Replacement cost minus depreciation based on today's costs.
Replacement Cost
Cost to replace an item without depreciation.
Functional Replacement Cost
Replaces damaged items with alternatives that serve the same function but are not identical.
Market Value
Price based on free market conditions, influenced by supply and demand.
Agreed Value
Value agreed upon by the insured and insurance company before the policy is issued.
Stated Value
Value used to determine premiums, not the amount the insured will receive.
Pair or Set Clause
Valuation of a loss based on a fair proportion of the total value of the set.
Appraisal
Process used to resolve disagreements on the amount of a loss.
Arbitration
Process used to resolve disagreements on areas other than the loss amount.
Coinsurance
Clause requiring property to be insured for a specified percentage of its value, commonly 80%.
Vacancy
No property or people present at the time of loss.
Unoccupancy
No people present at the time of loss, but property may still be there.
No Benefit to Bailee
Policy clause stating that no insurance coverage applies while property is in the temporary possession of a bailee.
