Glossary of terms related to insurance and landlord insurance
As a stock market investor or real estate investor, you might be seeking passive rental income. In that case, you’ll probably want to be an absentee landlord who doesn’t live on or near the rental property.
Learn the definition and calculation of Actual Cash Value (ACV) in insurance, a term used to determine the value of an asset at the time of loss or damage.
Discover what additional coverages are in insurance and how they can provide extra protection for your property or liability.
Understand the role of an additional insured in insurance policies, who can be added to a policy as an extra protected party.
Learn about admitted insurers in insurance, companies that are licensed and authorized to sell policies in a specific state.
Find out what an aggregate limit is in insurance and how it pertains to the maximum amount an insurer will pay for all claims within a specific time period.
Learn about the Agreed Value method in insurance, a way to determine the value of a property before a loss occurs.
All risks policy is a type of insurance coverage that automatically covers any arising incident or risk from any peril except those that are specifically excluded in the policy.
Annual return measures how much money, or profit, is made on a property as a percentage of the cost of that investment.
Understand the concept of an authorized insurer in insurance, a company that is legally allowed to sell policies in a specific state.
Discover what an automatic increase is in insurance and how it pertains to automatic increases in coverage limits over time.
Learn about Basic Named Perils in insurance, a type of coverage that only covers specific perils listed in the policy.
A binder is a temporary insurance contract that provides coverage until a formal policy is issued. Learn more about binders.
Bonus depreciation is a tax incentive that allows real estate investors to depreciate the cost of certain qualified property investments more quickly than they would be able to otherwise.
Broad named perils coverage is a type of insurance policy that covers a wide range of risks and hazards. Learn more about broad named perils.
A broad theft coverage endorsement is an add-on to an insurance policy that expands the coverage to include more types of theft. Learn more about broad theft coverage endorsements.
Builders risk coverage is a type of insurance that protects properties under construction from damage and loss. Learn more about builders risk coverage.
Burglary is the unauthorized entry into a building or property with the intent to commit a crime. Learn more about burglary and how it is covered by insurance with Steadily.
A businessowners policy (BOP) is a type of insurance package that combines general liability and property insurance for small businesses. Learn more about BOPs.
It measures the annual rate of return that an investor receives on the actual cash investment made in a property, expressed as a percentage.
Casualty insurance is a broad category of insurance that covers losses from accidents, injuries, and other unexpected events. Learn more about casualty insurance.
A certificate of insurance is a document that provides proof of insurance coverage. Learn more about certificates of insurance.
Learn about the coinsurance clause, which is a requirement in a property insurance policy that the insured maintain insurance on the property.
Understand the concept of coinsurance penalty, which is a penalty that an insurance company may impose on an insured for not maintaining insurance on a property.
Learn about common policy declarations, which are the initial pages of an insurance policy that provide details around the policy and policyholder.
Understand coverage extensions, which are additional coverage options that can be added to an insurance policy for an additional cost.
Learn about coverage form, which is a document that outlines the specific coverage provided by an insurance policy.
Understand the concept of coverage trigger, which is the event or series of events that must occur in order for an insurance policy to respond and provide coverage.
Learn about damages, which are monetary compensation awarded to an individual or organization as a result of a legal action or claim.
Understand the concept of declaration, which is a section of an insurance policy that lists the specific details of the policy such as the policyholder's name and the property being insured
Learn about deductible, which is the amount that an insured must pay before the insurance company begins to pay for a covered loss.
Understand the concept of defense costs, which are expenses incurred by an insurance company to defend an insured against a liability claim.
The DP1 policy is more limited than DP2 and DP3 policies as its a named peril policy. Learn more about DP1.
Commonly known as Dwelling Fire Form 2, a DP2 policy is created for rental properties and is a named-perils insurance policy. Learn more about DP2.
A DP3 policy is the third and most in-depth insurance policy and is considered the best insurance cover for rental properties. DP3 insurance operates as an open peril policy.
The part of a homeowner's policy that may help repair or rebuild your home's physical structure, condo, or place of residence if damaged by a covered peril.
The policy includes different cover than those listed above, protecting unique shortfalls during constructions processes. Learn more about dwelling under endorsement.
The insurance term earned premium represents any premiums collected by an insurance company for the part of the insurance policy that has expired.
Earthquake insurance is a separate coverage policy that will cover loss from earthquake damage.
Our complete insurance glossary with terms and definitions. From basic named perils to liability insurance, learn all about landlord insurance with Steadily.
The equipment breakdown coverage helps protect a wide variety of appliances and devices within your home if they break down or become damaged because of a covered incident.
Tenant estoppel certificates are legal documents that provide information about a tenant's lease and tenancy to a potential buyer, lender, or other interested party.
Steadily provides expert information on everything related to landlord insurance and real estate. We answer all your questions about landlord insurance, and more.
The Fair Credit Reporting Act (FCRA) protects the consumer information privacy collected by tenant screening services and credit bureaus. The law regulates what information can be collected, accessed, used and shared in the consumer reports.
Fair rental value coverage is a type of coverage in a landlord insurance policy. It may help replace lost rent payments if the property you are renting out is temporarily uninhabitable after a covered claim. This protection is sometimes referred to as fair rental income protection.
Under flat cancellation rulings, the policyholder will not have paid or started to pay any new premiums, so the need for a refund is non-existent.
Functional Replacement Cost is an insurance term to determine how much money you will be paid for property or item damages covered under your policy.
A guarantor is someone who agrees to pay the rent and any other associated costs if the tenant is unable to do so.
Anything that makes risk more probable or a loss more likely to occur due to the peril. There are five types of hazards: physical, morla, morale, legal, informational.
A policy that integrates both personal liability cover and personal property coverage. Depending on the policy chosen by the insurer, the property coverage can vary.
This type of peril is caused directly by a person(s) such as vandalism, regulation, poor design or production, theft, negligence, etc.
Part of the homeowner's policy that authorizes cover on the insured individuals' business activities conducted on the residence premises.
The measures of compensating the insured, as close to the same financial condition preceding the incident, for the loss or damage that has occurred.
The insurance protections provided when damage or loss is sustained, insured needs to be restored to the approximate financial condition preceding the incident.
The realistic concern of a person acquiring insurance for any individual or estate against unforeseen events, such as death or losses.
They are coverages that are excluded from your insurance policy. You'll usually find most exclusions after the main coverage sections in your policy.
Insurance policy cancellation refers to when there is an end or termination of an insurance policy before the confirmed end date.
The total amount of insurance purchases vs. the actual replacement cost of the insured property is usually expressed as a ratio.
A common law that states any person or entity is accountable for the financial damage suffered by another group, entity, or person.
Liability insurance is the action of transfering the weight of financial loss— because of a liability claim from the insured to insurer.
The possibility that a person or business will sustain a loss from a claim made against them stating they are legally responsible for injuries or damages sustained.
A legal entity allowed when forming a business; offers a sophisticated business structure and provides personal liability protection for debts incurred by the company.
A loss payee is a third party who is listed on a policy declaration page.
Market value is a neutral price that could be achieved from a property sale at the time of loss/damage.
A type of homeowners insurance that protects a mobile homes structure and its contents; some policies also included property and liability insurance.
In the insurance space, named insured signifies a business or person who is labeled as the insured in the policy contract.
Only insures against losses explicitly listed in the policy; if the risk is not listed, there is no coverage
Net Operating Income (NOI) is the difference between Total Income and Total Operating Expenses and is commonly used by real estate investors.
A non-admitted insurance is organization that is not permitted or licensed to do business in a particular state.
An area considered a moderate-to-low threat flood zone and did not signify immediate danger. Zones B, C, or X are used to describe the type of flood.
Unlike a named peril policy, an open peril policy provides cover to the insured for any loss caused by any peril that is not clearly ruled out by the policy
Insurance that gives part coverage for demolition costs and increased construction costs that are regulated by law or regulation.
More than two types of insurance cover combined into a single contract; also called a multi-line policy.
Protects against damages that are not bodily but discriminatory like slander, libel, false arrest, violation of privacy, malicious prosecution, and wrongful entry.
A policy that validates liability cover to the dwelling policy, like the homeowner's policy, can be purchased as a standalone policy.
Personal lines insurance refers to any kind of insurance that covers individuals against loss that results from death, injury, or loss of property.
Property that is not real estate can be an asset that is movable and not rooted in a fixed location.
Primary insurance refers to a coverage that takes priority when more than one policy or coverage bears on the same loss.
The fee to repair a damaged or destroyed item that is insured.
The fee to replace a damaged or destroyed item is insured without lowering the price because of depreciation.
A scheduled coverage is a policy that is customized to cover specific goods for a specific amount.
Refers to land with roughly a 1 percent chance of a flood occurring there in any given year. The two classifications for SFHA areas are 1) “A” zones and 2) “V” zones.
Section of the insurance policy that insures against losses arising from particular events is clearly set out in the policy, such as theft or fires.
Provides the insured- through the insurer- the legal right to file a liability suit against the party at fault which caused a loss to the insured. Learn more about subrogation.
The action of unlawfully taking on stealing property includes burglary and robbery.
A triple net lease (NNN) is a form of commercial real estate lease agreement in which the tenant is responsible for all ongoing expenses related to the property.
Extra insurance is available as personal or commercial insurance which gives the insured further protection and coverage than other policies.
When a property or dwelling is unoccupied by people, insurers will restrict the level of coverage when the property is vacant for an extended period.
An insurance company uses this technique to figure out the most convenient payment for a loss.
An agreed policy is written by the insurer and insured, listing the value of the insured property in advance and is not related to the amount of insured loss.
By signing a waiver, you are voluntarily giving up a known right or claim.
A warranty deed is a real estate document where the seller guarantees clear title to the buyer with no undisclosed liens. It provides the strongest title protection of any deed type.
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