Insurance Terms Glossary

Insured / Named Insured: The individual or individuals who are named on the insurance policy. Can also be referred to as a policyholder.

Actual Cash Value (ACV): What the materials on your property are worth right now. Calculated by subtracting Depreciation from Replacement Cost Value.

Replacement cost value (RCV): The actual cost of replacing the materials on your property today, without applying Depreciation.

Depreciation: The loss value over time due to factors such as age and wear and tear.

Premium: The actual cost of your insurance plan. Typically annual or monthly payments due to your insurance company that represent your obligation to the contract that is your policy.

Deductible: The amount that you must pay out of your own pocket before the insurance company will begin paying towards any covered loss to your property. It is illegal for a contractor to waive the deductible.

Declarations Page: A page which summarizes the details of the policy. Typically outlines coverages, limits, your premiums, and your deductible. 

Peril: A danger or hazard that can cause a loss, for example, a hailstorm or a fire.