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Glossary & Resource Center

Disclaimer: This website is meant to provide general information. The following definitions may or may not apply to your policy. Actual policy forms, conditions and endorsements take precedent.

Actual Cash Value: A method of valuation of property using “Replacement Cost minus any depreciation for age and condition”. (See Replacement Cost)

Audit: Certain business policies may be audited resulting in either an additional premium, reduction in premium, or no change in the premium charged at the policy’s inception.

Coinsurance Clause (Property Policy): A Percentage listed on your property policy requiring you to insure the covered property to a minimum percentage of the value of that property in order to avoid a penalty during payment of any claims. A property policy will not pay more than the lesser of, the policy limit less any deductibles and coinsurance penalties, or the amount of the loss less any deductibles and coinsurance penalties. In order to have the full amount of coverage a policyholder should insure his property to the full value.

Experience Modification Factor: This percentage factor is used in rating certain Worker’s Compensation policies. The factor is based on the insured’s loss experience and can result in an increase, a decrease, or no change to the premium charged.

Flood Zones: Flood Zones are used in determining the proper Flood Insurance Rate on an eligible structure. Flood Zones are determined by the Federal Emergency Management Association (FEMA). NOTE: A low risk flood zone (Zone “X”) does not indicate that the property will not flood. Annually, approximately 1/3 of all flood losses occur in those flood zones considered to be "low risk".

Replacement Cost: A method of valuation of property. “Replacement Cost using like-kind and quality, without regards to depreciation”. (See Actual Cash Value)