Renters Insurance: Terms and Glossary
by Ankur S. Get Free Insurance Quotes Online
Renters insurance is for people who rent any living space
whether it’s an apartment, townhouse, single-family home or any other type of
Renters insurance is used and maintained
by people to cover their belongings within their living premises like
apartment, townhouse, condo or home. It also covers the tenant for liability
coverage that may arise due to an incident on the rented premises.
Some key and common terms used in Renters Insurance quote or
lingo of trade is very important to understand and make the right decision.
Familiarizing yourself with the common insurance industry terms for renters
insurance is very important so you can understand your coverages and at the
same time better equipped to negotiate for the best price on your renters insurance quote or policy.
are some of the common and important terms to know in Renters Insurance:
Actual Cash Value (ACV) –Current cash value of the property.
This is calculated by reducing depreciation from the replacement cost.
Additional Living Expenses (ALE) –Coverage that
provides for temporary living expenses in the event a disaster makes your place
unavailable. This coverage usually pays for hotel accommodation, meals, and
other temporary rentals or living expenses while the rental home is being
Annual Limit –A maximum cap on the amount your insurance company will
pay out to you in any calendar year.
Appraisal –An appraisal is an unbiased professional evaluation to
determine the insurable value of property or amount of a loss.
Claim –A formal request made by a policyholder to an insurance
company to recover for damage or loss covered through the policy coverages.
Coverage –Insurance coverage basically represents specifically, how
much protection your insurance policy provides. Usually, there are several
different types of coverages listed in an insurance policy.
Deductible –Deductible is the amount of money the policyholder agrees
to pay in an insurance claim before the insurance company starts paying based
on the insurance coverages. The policyholder is expected to come up with this
amount of money before a claim request starts paying from the insurance
Depreciation –A reduction in the value of property due to time, wear
Effective Date –The effective date for renters insurance coverage or
policy is the date when your coverage or policy officially becomes active. It
is this date when a policyholder can start receiving services and your
insurance company will pay out the benefits.
Endorsement –An insurance amendment to a renters insurance policy may be used to
change the terms of the policy by making additions, deletions, exclusions or
otherwise alter any coverages.
Exclusion –An exclusion in a policy narrows the scope of coverages
provided by the insurance company. It is a means or a policy provision that
eliminates or reduces coverage for some of the events or certain types of
Grace Period — An insurance grace period in a renters insurance is a
specific amount of time during which policyholder can pay off an overdue
balance without coverage lapse. Generally, insurance companies offer a grace
period of around 30 days, although it may vary significantly between different
Liability Coverage –Liability coverage on a renters Insurance policy covers
for bodily injury and property damage. In the event of an accident, If you’re
found responsible for an injury to a guest at your rented home or apartment,
liability coverage on your renters insurance policy may help pay for the
medical bills that your guest may incur.
Limit of Liability –It refers to the maximum amount of money your insurance
company is on the hook for if there is an event of damage or loss.
Limits — A limit is a maximum amount your insurance company will
pay for a claim filed against a covered loss as defined in your renters
Peril –A peril is a specific cause for a loss or damage. Among
many others, usual perils covered by renters insurance include burglary, fire,
vandalism, falling objects, water-related damage and electrical surge damage.
Qualifying Event –An event that triggers your renters insurance coverage to
become active. For example, a fire, water leak or theft.
Rider Endorsement –A rider (also referred to as endorsement) allows a
renters insurance holder to raise the claim limit of a specific category, such
as jewelry. Basically, it allows the policyholder to purchase additional
coverage for personal property that may be considered by the insurance company
of unusually high value.
Total Loss –A loss so large that the property or possession is
considered to be of no remaining value.
Created on Jan 3rd 2020 10:08. Viewed 235 times.