Home Insurance Terms H-L

Glossary of defined terms

Hazard
A condition or situation that increases the possiblility or extent of a loss.

Homeowner Policy
Combined property and liability insurance that provides insurance coverage against the covered perils to which a homeowner is exposed.


Improvements and Betterments
Permanent changes made at your own expense to your rented home.

Increased Cost of Construction Insurance
Commonly added as an endorsement to homeowner policies, "increased cost of construction insurance" covers the additional costs of building repair or reconstruction when you rebuild with more expensive services, materials and techniques required by local ordinances. Insurance that covers the additional cost of reconstructing a damaged or destroyed building where ordinances require rebuilding with more expensive materials, services or techniques than originally used.

Increased Hazard
Dangerous materials or activities that are not inherent to the property.

Independent Agent
A contractor who represents different insurance companies

Indirect Loss (or Damage)
Loss resulting from a peril, but not directly caused by that peril.

Inflation Protection (or Inflation Guard Coverage)
An amendment to a policy that provides protection against inflation by adjusting the level or amount of the benefit.

Inherent Vice
A flaw in an item of property that will, in time, produces damage to the property without the assistance of an outside force

In Kind
Replacement of property with other property instead of cash.

Insurance Commissioner
A state official charged with enforcing the state´s laws governing insurance.

Insurance Department
State Government Department that is in charge of enforcing the laws governing insurance.

Insurance Fraud
Any crime that involves an insurance company

Insured
The person(s) protected by an insurance policy.

Insured Premises
The place where you live, any surrounding land you own, and any structures on your property.

Insurer
The insurance company providing the coverage.


Jacket
The cover of an insurance policy containing the declarations, exclusions, and conditions to the policy.

Juvenile Insurance
Life insurance policies written for children under a specified age.


Kidnap/Ransom Insurance
Insurance coverage for the cost of ransom or extortion payments

Key Person Insurance
Insurance that helps protect a business against the loss of income resulting from the disability or death of a significant employee.


Liability
Any legally enforceable obligation

Liability Insurance
Insurance that pays when you are responsible for an accident in which you have injured someone or damaged their property.

Liberalization Clause
A clause that states that should the insurer, within a specified period of time, begin offering a broadened version of the current policy without increasing the premium, then that increased coverage will apply to the current policy.

Limit of Liability
The maximum amount that an insurer agrees to pay in the case of loss..

Limited Building Code Upgrade
An endorsement added to a policy that provides coverage for demolition costs and increased construction costs required or regulated by law.

Limits
The maximum amount of insurance that will be payed for a covered loss.

Loss
The dollar amount of an insurance claim.

Loss Assessment
A type of coverage that protects a condo unit owner if fees are assessed by the condominium association for unexpected loss to the property.

Loss Deductible Clause
A clause that requires you to pay part of your loss before the company will pay the rest.

Loss of Use
Coverage to compensate a policyholder when they have lost the use of their property.

Loss Payable Clause
Extends coverage to parties with an insurable interest in your property.


Information from Deschutes Insurance

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