Glossary of Terms

Term Description
Premium The premium is the name given to the cost of your insurance. In property insurance, the premium varies based on different factors, such as type of construction, i.e. wood or cement, whether it's occupied by its owner or empty, and the limit for the insurance you acquire.
Deductible The deductible is a way of sharing the risk of loss with the insurance company. It is the amount you are required to pay out of pocket on each claim before the insurance company starts paying. It may be stated as a percent of the total insured limit or as a fixed amount.
Hazard A hazard is the cause of the loss covered under the insurance policy. Some examples of hazards are fire, earthquakes, hurricanes, or vandalism. When a claim is submitted, the insurance company will evaluate whether the claimed damage was caused by an insured hazard. We urge you to read your policy in order to identify the covered hazards and their exclusions.
Limit The limit in a property insurance is the maximum insurance amount covered in the policy. In terms of the structure coverage, the limit should be the replacement cost of your property, not the market value of your home. The insurance limit that is right for you may change over time. You should review it regularly to make sure you are well protected.
Replacement cost The replacement cost is the amount of money needed to rebuild or replace your property with materials of equal or similar quality after a loss. The replacement cost does not include the value of the land. The replacement cost may change over time or as a result of home improvements performed. Make sure to review your replacement cost and update your insurance limits.
Coinsurance The coinsurance is the penalty applied if the minimum amount of insurance covered under the policy (the insured limit) is less than the minimum cost for reconstruction or replacement required by your policy. If you do not maintain adequate limits in your policy, your claim payment may be reduced. Avoid coinsurance penalties by reviewing your limits regularly.

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