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Personal Finance Chapter 10
N/A
25
Finance
Undergraduate 1
12/11/2011

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Term
Peril
Definition
An event or happening, whether natural or man-made, that causes a financial loss
Term
HOs
Definition
The six standardized "homeowner's" insurance policies available to homeowners and renters
Term
Named Perils
Definition
A type of insurance that covers a specific set of named perios. If a peril isn't specifically named, it isn't covered
Term
Open Perils
Definition
A type of insurance that covers all perils except those specifically noted as excluded
Term
Property Insurance
Definition
Insurance that protects you against the loss of your property or possessions
Term
Personal Liability Insurance
Definition
Insurance covereing all liabilities other than those resulting from the negligent operation of an automobile or those associated with business or professional causes
Term
Endorsement
Definition
A written attachment to an insurance policy to add or subtract coverage
Term
Personal Articles Floater
Definition
An extension to a homeowner's insurance policy that provides coverage for all personal property regardless of where it's located. This covereage applies to the policyholder and all household residents except children away at school
Term
Inflation Guard
Definition
An endorsement that automatically updates the level of property coverage based on an index of replacement costs that continually updates the cost of building a home
Term
Actual Cash Value
Definition
The replacement value fo the house less accumulated depreciation (which is the decline in value over time due to wear and tear)
Term
Replacement Cost Coverage
Definition
Additional homeowner's coverage that provides for the actual replacement cost of a stolen or destroyed item as opposed to the actual cash value
Term
Personal Umbrella Policy
Definition
A homeowner's policy that provides excess liability insurance with protection against lawsuits and judgements generally ranging from $1 million to $10 million
Term
Coinsurance Provision
Definition
A provision or requirement of homeowner's insurance requiring the insured to pay a portion of the claim if he or she purchased an inadequate amount of insurance (in this case, less than 80 percent of the replacement cost)
Term
80 percent rule
Definition
A homeowner's insurance rule stating that the replacement cost coverage is in effect only if the home is insured for at least 80 percent of its replacement cost. This rule is intended to discourage homeowner's from insuring for less than the replacement cost of their homes
Term
Insurance Credit Score
Definition
A credit score, based on the same information as your traditional credit score, which is used in determining what your home and auto insurance rates will be
Term
Deductible
Definition
The amount that you are responsible for paying before insurance coverage kicks in
Term
Direct Writer
Definition
An insurance company that distributes its products directly to customers, without the use of agents
Term
Personal Automobile Policy (PAP)
Definition
A standardized insurance policy for an individual or family
Term
Combined Single Limit
Definition
Auto insurance liability coverage that combines both bodily injury and property damage liability
Term
Split-Limit Coverage
Definition
Auto insurance liability coverage that allows for either separate coverage limits for bodily injury and property damage, split coverage limits per person, or both
Term
Uninsured Motorist's Protection Coverage
Definition
Coverage against injuries caused by a hit and run driver or by an uninsured motoroist or a negligent driver whose insurance company is insolvent
Term
Collision Loss
Definition
The portion fo auto insurance coverage that provides benefits to cover damages resulting from an accident with another vehicle or object
Term
Other than Collision Loss or Comprehensive Physical Damage Coverage
Definition
Auto insurance coverage for noncollision losses. For example, it would cover damage if the care were hit in a parking lot or if the door were damaged as a result of banging it into a parked car next to it
Term
No-fault Insurance
Definition
A type of auto insurance in which your insurance company protects you in the case of an accident regardless of who is at fault
Term
Umbrella Liability Insurance or Umbrella Policy
Definition
An insurance policy that supplements liability coverage on a homeowner's and/or automobile insurance policy. This insurance kicks in after the homeowner's and/or automobile policy coverage run(s) out and provides coverage for claims not covered under homeowner's insurance such as libel, slander, and invasion of privacy
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