Actual cash value is defined as the amount of reimbursement based on the current market value of an item, allowing for depreciation.
All risk is a type of coverage for any event except those specifically named as exclusions.
Average replacement cost is the establishment of an average cost for all holdings or groups of holdings
Blanket coverage is insurance written to cover all items.
Coinsurance is a clause in insurance policies to protect the carrier by limiting the amount of reimbursement when inadequate coverage is held.
Direct loss is defined as a financial loss that results from the physical damage, destruction, or theft of the property.
Fine arts are paintings; etchings; pictures; tapestries; rare or art glass; art glass windows; valuable rugs; statuary; sculptures; antique furniture; antique jewelry; bric-a-brac; porcelains; and similar property of rarity, historical value, or artistic merit excluding automobiles, watercraft, aircraft, coins, stamps, money securities, furs, jewelry, precious metals.
Hazards are conditions that increase either the frequency or the severity of losses. (Poor lighting by itself would not cause the loss, but to the extent that it makes theft more frequent it is a hazard).
Indirect loss is a financial loss that results indirectly from the occurrence of a direct physical damage or theft loss.
Insurance is a financial arrangement that redistributes the costs of unexpected losses by transferring the cost of the predicted losses back to the exposures. Legally it is a contractual arrangement whereby one party agrees to compensate another party for losses.
Insurance Contract (Basic Parts of:)
- Conditions are provisions inserted in the policy that qualify or place limitation on the insurer's promise to perform; i.e. file a claim.
- Declarations are statements that provide information about the property to be insured.
- Deductible is a provision by which a specified amount is deducted from the total loss payment that otherwise would be payable.
- Endorsements and riders are written provisions that add to, delete, or modify the provisions in the original contract.
- Exclusions are excluded perils, excluded losses, excluded property.
- Insuring agreement summarizes the major promises of the insurer.
- Miscellaneous provisions establish working procedures for carrying out the terms of the contract.
Named peril is insurance that specifics what hazards are being insured against.
Peril is defined as the cause of loss.
Physical hazard is a physical condition that increases the chance of loss.
Replacement is defined as the real cost of replacing or restoring an item in the current market.
Risk is defined as uncertainty concerning the occurrence of a loss. All-risks policy; i.e. all losses are covered except those losses specifically excluded.
Scheduled limit is the specified limit for insured to receive full value after a loss. SChedule requires description of property and its appraised value.
Self-insurance is a funding vehicle to handle any losses by the organization itself, rather than through the purchase of commercial insurance.
Specific coverage is insurance that names coverage in a specific category or location.
Valuable papers and records coverage covers loss to valuable papers and records. The form covers the cost of reconstructing the damaged or destroyed records and should cover restoration since in many cases repurchase is not possible. Valuable Papers and Records are written, printed or otherwise inscribed documents and records, including but not limited to books, maps, films, drawings, abstracts, deeds, mortgages, micro-inscribed documents, manuscripts but does not include money and/or securities, or electronic processing media.
Definitions have been taken from Foundations of risk management and insurance by Charles M. Nyce. Published by American Institute for Chartered Property Casualty Underwriters/Insurance Institute of America located in Malvern, Pennsylvania in 2006.