We Help You Move Forward From Loss

At Pazos Law Group, we want to help you move forward. When you’re facing the results of an accident or damage to your home or business, handling the complex and often confusing insurance claims process can be overwhelming. We are here to help–but don’t just take our word for it. Take a look at what our clients have to say.

COMMON INSURANCE POLICY TERMS

Confused by the letters you’re receiving or the terms your insurance company is using related to your claim? Take a look at these common insurance terms, written in language you can actually understand, for help.

Actual Cash Value (ACV): This term refers to how an insurance company decides the value of lost or damaged property. Generally, this involves taking the replacement value and subtracting any depreciation (loss of value over time). You should ask your insurance company how this value is calculated, since it’s entirely in the insurance company’s control.

Aggregate/Aggregate Policy: The aggregate is a limit within the policy or the maximum the policy will pay for the total number of losses you have within a certain time frame.

Any Occupation Disability Insurance: This type of insurance offers benefits if the person who holds the insurance can’t work in the industry/occupation, and that industry/occupation is not limited to a specific type.

Application Misrepresentation: When the person who applies for insurance does not provide complete or accurate information, either on purpose (fraud), due to a lack of care (negligence), or innocently, this lack of information can be grounds for a denial of a claim.

Appraisal: When the insurance companies disagree about how much loss has been suffered, they order an appraisal process which assesses value. This process is often determined by your individual policy.

Assisted Living: Housing, often for senior citizens, that offers assistance with daily living tasks (i.e. cooking and cleaning and transportation) but not intensive medical care.

Bad Faith: Intentional deception is bad faith, and can be used to describe when an insurance company does not fulfill its obligations to a policyholder or when they use unfair or dishonest actions, like using badly trained adjusters to determine value or damage.

Beneficiary: The person who receives the benefits (or payment) from a will, life insurance policy, retirement account, annuity, trust, or a similar policy/account.

Benefits (Medical and Hospital Expenses): The health care expenses that are covered by an insurance policy.

Business Owners Policy: An insurance policy created specifically for a business, which focuses its coverage on property, liability, or business interruption.

Catastrophic Loss: A tremendous loss (i.e. the entire house is destroyed by fire, a vehicle is totaled in an accident) that could not have been predicted.

Claim: The formal request that a policyholder sends to an insurance company, asking for the insurance company to cover loss and damage that is covered by the policy.

Company Insurance Adjuster: The person sent by the insurance company with the task of determining how much the insurance company should pay for the claim.

Conditions: The requirements that policyholders must follow when they’re seeking coverage; these conditions are often different from policy to policy.

Declarations (“Dec Pages”): Pages within the insurance policy that lay out the details about things like insurable interest, demographic information, and property specifics for the policy.

Direct Loss: The property loss or damage that is a direct result of an event (or an unbroken chain of events) that are covered under the policy.

Examination Under Oath (EUO): A formal process that involves the insured person being put under oath and answering, in the presence of a court reporter, questions asked by an insurance company attorney or representative. In these cases, you should be represented by your own insurance lawyer. The insurance company’s lawyer is NOT looking out for your best interest.

Exposure: This term could refer to a policyholder or to a property, depending on what is insured. Exposure refers to a loss that is a result of a contingency or a hazard.

Hazard: A situation or scenario that could increase the likelihood of a loss or its severity.

Independent Adjuster: An adjuster who works freelance, meaning he or she is paid by multiple insurance companies. This adjuster is not a policyholder adjuster or a public adjuster.

Insured (also Policyholder): The person, organization, or business covered by a particular policy.

Insurer (also Insurance Company): A person or company allowed by law to write property and/or casualty insurance within your state.

Irrevocable Beneficiary: The life insurance beneficiary, whose compensation cannot be changed without consent.

Loss Payment Clause: A fairly standard provision in commercial and residential insurance policies, one of the few that works in the policyholder’s favor, that should be followed when any benefits are received.

Negligence: The failure to use reasonable care, which then results in loss or damage to you or others.

Nursing Home: Private organization/institution that offers living quarters for people who need health care assistance, usually for older people.

Own Occupation Disability Insurance: Type of insurance that covers a person when he or she cannot work within a specific field any longer, even if he or she can continue to work in another field or industry.

Package Policy: A single contract with two or more policies combined.

Policy: A written contract, with terms and conditions, that creates an agreement between an insurance company and a person or organization being insured.

Premium: An amount, which reflects the insurance company’s expectation of loss, paid on a regular basis by the insured.

Primary Insurance: Coverage that takes precedence when more than one policy covers the same loss or claim.

Proof of Loss: The formal statement that the insured person or organization makes to the insurer about the claim, especially related to property insurance, so that the insurer can determine whether or not they are liable to pay for the damage. These statements should be made in a timely fashion and following the strict requirements that the insurance company sets forth in the policy. Not doing so is a common reason for a claim to be denied.

Provisions: Specific details of the policy (sometimes called contingencies) that are detailed within each section.

Proximate Cause: An event related to a legally recognized injury and named the cause of the injury, which would then be covered under a specific policy.

Public Adjuster: A licensed, trained specialist that adjusts insurance claims for homeowners, commercial owners, or businesses. These adjusters work for the policyholders and not for the insurance companies.

Replacement Cost Value (RCV): The cost of replacing property loss or damage without a reduction for depreciation (loss due to age or wear and tear).

Salvage: Any value that remains after the loss or damage.

Term: The period of time for which the insurance policy is in effect.

Third Party: Someone other than the insured person or policyholder who has experienced a loss and is therefore entitled to benefits because of the actions of the insured.

Umpire: An expert in the field of the damage/loss (i.e. a general contractor, engineer, or roofer) who is called in when two appraisers cannot agree on the amount of damage/loss and need a tie-breaking opinion. Any agreement by two of the experts involved is binding.

PLEASE NOTE: These general definitions are to increase your familiarity with insurance terms. Please check your specific insurance policy for policy-specific definitions and terms.

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