Homeowners Insurance Glossary

Actual Cash Value
The amount an item is worth based on the replacement cost with depreciation taken into account. So, if you’ve got an item that is considered to be useful for 10 years, and make a claim on the item when it’s 5 years old, the actual cash value will only be half of the replacement cost. No Kin policies use actual cash value for our coverage.

Adjuster
The person who investigates claims for an insurance provider, which includes assessing damaged property, interviewing witnesses, and reviewing police and hospital records.

Agent
A licensed insurance representative who finds coverage that fits your home and budget and binds the policy. At Kin, we create technology that supports our agents so they can help you secure better coverage faster.

Animal Liability
Animal liability covers damage caused by your pets, most notably dogs. If you have a dog, it's worth understanding whether you need animal liability coverage, and whether it covers damage or injury caused by your animal off of your property.

Appraisal
An appraisal is a professional assessments of a property’s value. Your home, belongings, and property losses can be appraised.

Claim
A request made to an insurance company asking for payment on a loss that is covered by a policy. If a claim is approved, your deductible will be subtracted from the covered amount.

Catastrophic Coverage
A type of insurance that pays for damage caused by low-probability, high-cost events, such as floods, earthquakes, and hurricanes.

Coinsurance Clause
A provision in your insurance policy that requires you to carry coverage equal to 80 percent of your home’s value. 

Declarations Page
This is the first page of your insurance policy that lists key information about your coverage, such as policy limits and deductibles.

Deductible
The amount of money, per claim, that you are responsible for covering. Deductibles only apply to approved claims. If you have a $1,000 deductible and a claim is approved for $20,000, Your insurance company will cover $19,000 of it. Some perils (like hurricanes or wind) may have their own deductibles. 

Depreciation
The amount of value that an item loses over time. Items that depreciate are considered to have a specific length of time that they are considered useful, and will depreciate from 100% of their value when they are new, to 0% of their value when they have reached their useful age.

Designated Catastrophe Area
A zone in Texas located east of Highway 146 along the Gulf of Mexico that faces increased wind damage risk.

DP-3 Policy
This is a type of dwelling fire insurance for non-owner occupied, residential homes. Like other dwelling fire insurance policies, DP-3 can cover the home’s physical structure but not its contents. 

Dwelling
This is a fancy way of saying home. It means the main building that is covered by your homeowners policy, and any attached structures (except fences).

Fungi and Mold Insurance
Most home insurance policies exclude coverage for fungi and mold (though there's often a gray area if the fungi and/or mold is caused by water damage), so depending on the age of your home and how humid the climate, you might consider adding coverage for fungi and mold.

Golf Cart Insurance
If you own a golf cart, you might be surprised to learn that a standard policy does not protect damage to, or liability from us of the golf cart. Coverage is exceptionally affordable, and likely worthwhile if you use a golf cart regularly.

HO-1 Policy
Named-perils insurance that provides coverage for an owner-occupied, standalone home and its contents.

HO-2 Policy
A broad form home insurance policy that can cover your home and personal property against 10 named perils.

HO-3 Policy
A special form home insurance policy that covers your home and other structures on an open-perils basis and your personal property on a named-perils basis.

HO-5 Policy
A comprehensive form home insurance policy that covers the home, other structures, and personal property on an open-perils basis.

HO-8 Policy
A modified coverage form that provides home insurance for older buildings with replacement costs that outweigh the market value.

Hurricane Deductible
Typically homeowners’ insurance providers impose a separate Hurricane Deductible to your Standard Deductible. Your Hurricane Deductible is based on a percentage of your home’s value, and is the amount you will pay out of pocket should your home be damaged as a result of a hurricane.

Hurricane Screened Enclosure
If you have a screened enclosure, it's likely not covered by your basic insurance policy. The good news is that additional coverage is available, and not exorbitantly expensive.

Identity Fraud Expense
Identity fraud insurance covers expenses related to the consequences of having your identity stolen. Some examples include attorney and tax advisor fees, credit report fees, loss of income due to absence from work while dealing with the fraud, loan re-application fees, notary fees and costs for certified mail. Kin offers identity fraud add-ons to all policies. Be sure to ask your agent about it if you're interested.

Loss Assessment
Loss assessment coverage provides protection for members of an HOA or condo association, where each owner of a shared property is financially responsible for damages to the main building, shared areas of the property, injury in shared areas and deductibles.

Ordinance / Law Coverage
Ordinance or law coverage applies if you are faced with having to rebuild your home after a covered loss and are required by ordinance or law to upgrade the rebuild to meet current codes. This includes construction, electrical, and plumbing codes, among others.

Other Structures
Any buildings or built items (like fences, decks, etc.) that are covered by your policy, but aren’t attached to the main building that you live in.

Perils
A peril is a specific risk, or cause of loss, covered by an insurance policy. All Kin policies offer special coverage, which means you are covered for any and all perils except those that are specifically excluded.

Personal Reports
Also called a CLUE insurance report, a personal property report documents your 7-year loss history. It gives insurers insight into how "risky" it might be to insure your home.

Premium
The money that you pay to the insurance company to provide coverage to you through your insurance policy.

Protection Class
Put simply, a protection class is a grade given to a home based on the community's fire fighting abilities. This is used as a major factor in determining premium. If you're close to a source of water, that helps reduce premium.

Replacement Cost
The amount it would cost to replace or rebuild an item of similar quality using materials and goods that are currently available. When an item is rebuilt or replaced, you may end up with something that is better quality than what you’re replacing because the current standards for the item have improved over time. All Kin policies use replacement cost for our coverage.

Scheduled Property
Some types of personal property (like jewelry) have a predetermined coverage limit. You can make sure that individual items are covered by adding them to your policy as “scheduled property”. Some high-value items may require an appraisal. These scheduled items will then be covered up to the amount of the appraised price.

Sinkhole Insurance
Sinkhole insurance provides cover for damage to your home, Other Structures on your property as well as your Personal Property within these structures if they incur damage or loss due to a sinkhole on your property. Certain states require home insurers to offer ‘catastrophic ground collapse’ coverage as part of their homeowners insurance, whilst others require earth movement to be made available as an optional extra. 

Umbrella Policy
Extra liability coverage that goes beyond the coverage defined in your homeowners policy. It provides an extra layer of security from being sued.

Water Backup and Sump Overflow
Water backup and sump overflow coverage provides protection in the event that water enters your home through public utilities or septic systems. This is typically excluded from a standard home insurance policy, but is available as an endorsement.

Wind Mitigation

The process of making your home more resistant to wind damage. This can save you a lot of money on your home insurance.

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