Homeowners Insurance Definitions and Terms – it is a type of property insurance that offers protection to a home that may constitute buildings and what is within the building. Some of the key terms to consider while taking a Homeowners insurance cover include:
Homeowners Insurance Definitions and Terms
1. Limit of indemnity
This is the highest amount the insured can be compensated for due to the risk insured against occurs.
2. Insurance period
This is the specified period for which the Insurance cover will be active, and the insured gets indemnified during this period if and when the risk insured against occurs. Most insurance covers run for twelve months and may require yearly renewals.
3. Loss event
An unforeseen event that causes damage to the property is called a loss event.
4. Insured event
This event is provided for an insurance company’s terms and conditions must comply with and perform its obligatory duties.
5. Insurance Premium
These are the periodic payments made to the insurer during the valid policy.
6. Fair market value
Any item insured will always be assessed at the prevailing market price to ascertain its worth. This frequently causes a fall in prices of times insured as they generally depreciate with time.
7. Insurance deductible
The insured individual’s amount while making a claim affects the insurance cost. The insurance cost can be decreased by increasing the insurance deductible.