Insurance Glossary

Deductible

The amount of money, per claim, that you are responsible for covering. Deductibles only apply to approved claims. If you have a $1,000 deductible and a claim is approved for $20,000, Your insurance company will cover $19,000 of it. Some perils (like hurricanes or wind) may have their own deductibles.

Replacement Cost

The amount it would cost to replace or rebuild an item of similar quality using materials and goods that are currently available. When an item is rebuilt or replaced you may end up with something that is better quality than what you’re replacing because the current standards for the item have improved over time. All Kin policies use Replacement Cost for our coverage.

Actual Cash Value

The amount an item is worth based on the replacement cost with depreciation taken into account. So, if you’ve got an item that is considered to be useful for 10 years, and make a claim on the item when it’s 5 years old, the Actual Cash Value will only be half of the Replacement Cost. No Kin policies use Actual Cash Value for our coverage.

Depreciation

The amount of value that an item loses over time. Items that depreciate are considered to have a specific length of time that they are considered useful, and will depreciate from 100% of their value when they are new, to 0% of their value when they have reached their useful age.

Premium

The money that you pay to the insurance company to provide coverage to you through your insurance policy.

Peril(s)

A peril is a specific risk, or cause of loss, covered by an insurance policy. All Kin policies offer Special Coverage which means you are covered for any and all perils except those that are specifically excluded.

Claim

A request made to an insurance company asking for payment on a loss that is covered by a policy. If a claim is approved, your deductible will be subtracted from the covered amount.

Scheduled Property

Some types of personal property (like jewelry) have a predetermined coverage limit. You can make sure that individual items are covered by adding them to your policy as “Scheduled Property”. Some high-value items may require an appraisal. These scheduled items will then be covered up to the amount of the appraised price.

Dwelling

This is a fancy way of saying home. It means the main building that is covered by your homeowners policy, and any attached structures (except fences).

Other Structures

Any buildings or built items (like fences, decks, etc.) that are covered by your policy, but aren’t attached to the main building that you live in.

Umbrella Policy

Extra liability coverage that goes beyond the coverage defined in your homeowners policy. It provides an extra layer of security from being sued.

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