Homeowners Insurance Terms to Know

For your reference, below are definitions to some Home Insurance Policy terms you may encounter through the insurance process:

Actual Cash Value

The cost of replacing damaged or destroyed property with comparable new property, less the cost of depreciation (e.g. A 10-year-old T.V. will not be replaced at a current market value due to a decade of depreciation.).

Backup Sewer/Drain

Covers direct loss caused by water that backs up through sewers or drains, or overflows from within a sump-pump well. Usually a separate deductible applies. This does not include surface water or floodwater, which is always excluded.

Contents

Personal, or sometimes business-property items, owned by the insured that are not affixed to the building structures.

Deductible

The amount of a loss paid by the insured. This is the first amount paid on any claim.

Depreciation

The decrease in the value of an asset or item over time.

Domestic Employees

Ohio requires you to purchase Workers' Compensation insurance for your domestic employees (maids, chauffeurs, gardeners) if they are paid more than $160 a quarter. Please contact your local Bureau of Workers' Compensation and comply with your specific locality requirements.

Earthquake/Earth Movement

Coverage for earthquake, mudflow and landslide damages are excluded from most insurance polices. Additional coverage for your dwelling, and direct physical loss to property caused by earthquakes, can be obtained for an extra charge.

Floater

Another name for scheduled personal property or Inland Marine.

Loss of Use

The value placed on the inability to use damaged property.

Ordinance or Law

Most policies provide a small percentage of coverage (e.g. 10% of your dwelling value) for extra expenses you might incur following a covered loss in order to bring your home “up to code.” Items could include the replacement of plumbing or electrical systems as required by local ordinances. If you have an older home, ask your agent to consider increasing this coverage. If you are unsure whether you need additional coverage, you should contact your city regarding any ordinance changes that have been made.

Personal Liability Coverage

Insurance that pays and renders services to the insured, who is found, due to personal negligence, legally liable for losses incurred to others as required by law or assumed by contract.

Policy Forms

H03 & H05: Homeowners

•  H04: Tenants
•  H06: Condominiums

Replacement Cost

The dollar amount needed to replace property without deducting the depreciation, but limited to the maximum dollar amount on the policy.