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Glossary
A - B
- Actual Cash Value
- Unless otherwise
defined in the policy, Actual Cash Value in California means
Fair Market Value. The Fair Market Value of an item is the
dollar amount that a knowledgeable buyer (under no unusual
pressure) is willing to pay and a knowledgeable seller (under no
unusual pressure) is willing to accept.
- Agent
- A licensed
individual or organization authorized to sell and service
insurance policies for an insurance company.
- Aggregate Limit
- The maximum
dollar amount of coverage in force for a property damage policy
or liability policy. This maximum amount can be figured on a per
occurrence basis or as a general aggregate for the complete
policy term.
- Agreed Value
- A method of loss
valuation where the insured and the insurer list an agreed upon
amount to be paid in case of loss. This valuation method is most
common in property insurance when insuring valuable artwork,
antiques, or classic autos. A professional appraisal is usually
required.
- Arbitration Clause
- A clause in an
insurance policy that allows the insured and the insurer to each
appoint an arbitrator if they cannot agree upon an appropriate
claim settlement. Once the arbitrators have been selected, they
in turn appoint an independent umpire. If the arbitrators
disagree, then the umpire decides which claims settlement to
support. the final decision is binding.
- Betterment
- A situation that
occurs in a loss when an old piece of property is replaced by a
brand new item. The insured is put in a better financial
position than they were before the loss occurred, and
consequently may have to pay the difference in price for the
betterment.
- Binder
- A short-term
agreement that provides temporary insurance coverage until the
policy can be issued or delivered.
- Broker
- A licensed
individual or organization who sells and services insurance
policies on your behalf.
- Broker-Agent
- A licensed
individual who can act as an agent representing one or more
insurers, and also as a broker dealing with one or more insurers
representing your interests.
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