Actual Cash Value (ACV)
The value of the property, based on the current cost to replace it minus depreciation
1/46
| Term | Definition |
|---|---|
| Actual Cash Value (ACV) | The value of the property, based on the current cost to replace it minus depreciation |
| Additional Living Expenses | Extra expenses incurred if homeowner lives away from home following an insured risk |
| Homeowners Insurance Coverage D + Typical Cost | Additional Living Expenses, Typically 20% of the insurance on your house |
| Adjuster | individual employed by an insurer to evaluate losses and settle policyholder claims |
| Agent | person who sells insurance policies |
| Page that includes basic details, such as name of insurance company, name of insured, location of insured residence, policy number, property covered, coverages purchased, limits of liability, applicable deductibles, and policy premium(s) | Declarations (Dec) Page |
| Policy Section I | Describes property coverages and perils it covers |
| Policy Section II | Liability Coverage, Premises of medical coverage and accidental injury coverage |
| Michigan Basic Property Insurance | created by the government for those ineligible for standard home insurance |
| Is Homeowners insurance required in the state of Michigan? | No, but lenders may require it. |
| If you do not maintain insurance coverage, the lender puts coverage on the house for you and charges extra for it | Force Placed Insurance |
| Aka "Named Peril Policies", covers damage from specific perils which must be listed in the policy | Broad (HO2) |
| Most common policy type; dwelling is covered against all risks and perils except for those specifically excluded in the policy | All Risk (HO3) |
| provides coverage on a renter's personal property if problem happens inside a home/apartment; protected against specific NAMED perils; settled on a cash value basis | Renters (HO4) |
| Limit chosen based on value of contents; covers property within any property specifically owned by owner in the cooperative. Named perils. | Condominium (HO6) |
| Mobile Homeowners Policy | Typical policy, but also covers cost to move to avoid peril |
| Farm or Ranch Policy | Typical homeowners, but also covers farm or ranch buildings and equipment |
| Travel Trailers, Camping Trailers, and Motor Home Policy | Not insured under home, but insured under auto |
| Settlement Options in Homeowners Policies | Replacement Cost, Repair Cost, Actual Cash Value |
| Replacement Cost | Cost to repair, replace, or rebuild home to its original condition with materials of the same kind or quality |
| Repair Cost | Cost to repair, replace, or rebuild home to a similar condition with newer materials. Max amount of money insured receives may not be enough to restore to original condition |
| Actual Cash Value Settlement | When repairing/rebuilding, insurance company subtracts depreciation from home value |
| Coverage A | Dwelling |
| Dwelling Coverage | Protects against loss to dwelling; typically a replacement settlement |
| Coverage B | Appurtenant Structures |
| Appurtenant Structures Coverage | Other structures detached from main dwelling; 10% of dwelling amt with no premium |
| Coverage C | Personal Property/Contents |
| Personal Property/Contents Coverage | Typically settled cash value, some companies do replacement for an extra premium |
| Off Premises Loss | Protects against Personal Property loss away from premises (10% of total contents coverage amount) |
| Special Items | Special limits for special items such as jewelry, electronics, money, etc |
| Coverage E | Liability |
| Liability Coverage | Provides protection in case of legal obligation to pay for bodily injury or property damage. Pays for defense and amount liable |
| Coverage F | Medical Payments |
| Medical Payments Coverage | Pays for immediate care for someone hurt on property (coverage varies) |
| Coverage G | Property of Others |
| Property of Others Coverage | Replacement cost provided for physical damage to others' property caused by insured (limit varies) |
| Additional Replacement Cost Coverage ("Extra Expense" coverage) | Guaranteed full replacement of house, even if price is higher than the policy limit |
| Debris Removal Coverage | If debris removal/damage is more than the limit of coverage, an additional 5% is available |
| Tree Removal Coverage | Pays for tree removal (standard limit $500) |
| Trees, Shrubs, and Other Plants Coverage | Cost to replace trees, shrubs, and other plants up to $500 per item |
| Fire Department Service Charge | Pays expenses when fire department is called; standard limit $500 |
| Credit Card, Fund Transfer Card, Forgery, and Counterfeit Money Coverage | Protects against fraud/ reimburses counterfeit money, standard limit $500 |
| Ordinance & Law Coverage | Pays if home needs to be brought up to code in replacement/repairs; 10% of dwelling coverage |
| Personal Property Endorsements | Provides extra insurance for items exceeding the amount listed for personal property in a regular policy. Requires appraisal. |
| Water Backup and Sump Pump Overflow | Additional coverage needed for damage due to water backup or sump pump overflow |
| Flood Insurance | Not covered by a typical home policy, must be purchased additionally |