Home Insurance Terms D-G

Glossary of defined terms

Damages
The sum of money that a party is legally obligated to pay another party as compensation for injury or other types of loss.

Debris Removal Clause
Most property policies only cover direct damages caused by an insured peril. This clause provides the insured reimbursement for expenses incurred for the removal of debris.

Declarations
A section of an insurance policy which provides detailed information: Name and address of the insured, the insured property, its location and description, the policy period, the amount of coverage provided and the premium amounts.

Deductible
The amount of money an insured agrees to pay toward the total amount of an insured loss, before the insurance company pays the remainder of the covered loss.

Depreciation
The decrease in value of any property over time resulting from use, wear and tear or obsolescence.

Direct Loss
This is damage or a loss which is a result of a direct consequence of a particular peril. For example, fire damage to a freezer would be a direct loss. The food destroyed in the freezer as a result of the fire damage is considered an indirect loss.

Direct Writer
A direct writer is an insurance company that sells directly through their own salaried or commissioned employees to the consumer.

Dwelling Coverage
The section of a homeowners insurance policy that covers a house, attached structures, and the personal property in it, plus other coverages. These forms vary by the degree of coverage they provide.


Earth Movement
A peril which includes mud flow, landslide, earth sinking, rising or shifting, and earthquake. This peril is usually not included on homeowners and commercial property policies.

Earthquake Endorsement
Insurance coverage for damage caused by an earthquake. Most homeowners policies exclude this coverage. Homeowners who are concerned about the risk of earthquake damages may request this additional coverage.

Easement
This entitles the holder to specific interests. Example: Using land owned by another to access your own property.

Effective Date (or Inception Date)
The date an insurance policy´s coverage begins or goes into effect.

Eighty Percent Rule(also called the Co-Insurance Rule)
Requires your home to be insured for at least 80% of the full replacement cost at the time it is damaged or destroyed,if you want to collect the full replacement cost.

Endorsement
A change or amendment to an insurance policy that modifies the original provisions of the contract.

Exclusion
An insurance policy provision which rules out coverage of certain risks, persons, property or locations.

Exclusive Agent
An agent who is employed by only one insurance company and who solicits business exclusively for that company only.

Expiration Date (or Expire Date)
The date the coverage of an insurance policy ends. There is usually a time of day associated with this date. Example: An expiration date of 06/05/03 at 12:01am means the coverage ends one minute after midnight on the date shown.


FAIR
Fair Access to Insurance Requirements (FAIR) is a government pooling plan that offers insurance to people in high-risk areas who might otherwise be denied coverage.

Fire Insurance
Insurance coverage for losses caused by fire.

Fire Resistive Construction
A building with exterior walls, floors and roof constructed of fire resistant materials.

Fire Wall
A wall specifically designed to contain or seal off fires within a building.

Fireproof
Used in describing building construction, referring to buildings constructed to be practically undamageable by fire. This term is gradually being replaced by the term "fire-resistive", as it is impossible to design a totally fireproof building.


Floater
An insurance policy that covers personal property which may be moved from one location to another. The coverage "floats" based on the property location.


Flood
Any temporary submersion, partial or complete, of ordinarily dry land by water or mud. Floods are typically caused by an overflow of waters, whether inland, tidal or from any accumulated runoff from any source. Flood is excluded under a typical homeowner insurance policy.


Flood Insurance
Coverage against loss resulting from flood. This coverage is available separately from your homeowners policy through a program developed by private industry and the federal government.


Frame Construction
A building made primarily with wood frames and joists, the most common form of housing construction.


Guaranteed Replacement Cost
Coverage that guarantees the home insured will be repaired to its full value at the time of loss, regardless of the amount of coverage carried.


Information from Deschutes Insurance

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