Whether you have a homeowners policy or an automobile insurance policy, it is important to understand the nature and extent of your coverage. To truly understand your rights and obligations under an insurance policy, it is essential to familiarize yourself from some important terms that are used in the insurance industry and in your policy. This blog goes over some of the most important terms every policyholder should know.
Most homeowners policies define “bodily injury” to mean bodily harm, sickness or disease, including required care, loss of services and death that results from a covered “occurrence.” Bodily injury is typically limited to physical harms and not pure emotional harms accompanied by physical manifestations.
Commercial policies are specifically designed to cover losses that result from business operations. As a result, homeowners and private automobile insurance policies will exclude losses that arise from an insured’s business pursuits. A “business” is defined to include a person’s “trade, profession or occupation.”
An endorsement is a change made to the provisions of an insurance policy. Sometimes an endorsement will modify a material part of the insurance contract at the policyholder’s request, depending on their specific needs. Other endorsements are generally applicable to the standard policy issued by the insurance company.
Standard homeowners insurance policies define “insured” to include residents of the named insured’s household. Florida courts will determine whether a person qualifies as a household resident of the insured on a case by case basis. In general, a household resident lives with the insured and has some close ties of kinship with them.
Indemnity refers to the act of paying someone else for their liability to another person. Under the personal liability coverage section of a homeowner’s policy, the insurance carrier agrees to pay for or reimburse an insured for damages they are liable to pay a third party for bodily injury or property damage.
An insured means anyone who the insurance policy covers. Many homeowners policies define “insured” to include the insured’s relatives, dependents, and other household residents.
Under a standard homeowners policy, an “insured location” typically includes the property where the named insured resides, including the family dwelling and other structures, buildings or grounds in close proximity to the dwelling.
An insurance policy will cover losses up until a certain amount. The maximum amount an insurance provider will cover is called its limits of liability – meaning, the insurance company’s liability to cover certain losses is limited to the amount designated in the policy.
Homeowners typically cover losses that result from a covered “occurrence.” Policies define an “occurrence” to mean “an accident, including continuous or repeated exposure to substantially the same general harmful conditions which results in bodily injury or property damage.” The key concept of what constitutes an “occurrence” is that it is accidental in nature. Thus any bodily injury or property damage that results from an insured’s intentional conduct.
A peril refers to a specific cause of loss or damage to the insured’s property.
The policy period refers to a time period during which the insured has coverage under the terms of their policy.
The premium is the amount of money the insured pays their insurance carrier in exchange for their promise to insure them.
Property damage is often defined to mean “physical injury to, destruction of, or loss of use of tangible property.” The focal point of whether a loss constitutes property damage is the “physical” nature of the damage. For example, intellectual property would not qualify for property damage coverage because it is not “tangible” property.
Tender of Defense
When an insured needs their insurance company to defend them in a third-party lawsuit for bodily injury or property damage, they must “tender” their defense to the insurance company. Tendering a defense typically requires the insured to notify the insurance company in writing about an existing or potential lawsuit a third-party filed against them.
Umbrella or Excess Coverage
Umbrella coverage is a separate kind of insurance policy that covers a broad range of losses and liabilities that aren’t usually covered by an underlying homeowners or automobile insurance policy.
An underwriter is someone who identifies and analyzes the risks associated with the insured to figure out if they should be covered and the amount of their premium.
Get Professional Advice from a Miami Insurance Claims Attorney
Insurance claims can be tricky for someone who doesn’t have experience dealing with an insurance company. The scope of a policyholder’s coverage and their obligations to the insurance company heavily depend on the application of specifically defined terms and insurance industry jargon. At The Morgan Law Group, we can help you navigate the complex and sometimes confusing process involved with filing an insurance claim. With more than 20 years of experience handling insurance litigation for Miami policyholders, you can rest assured that your rights have an effective advocate after we take the reins.