Insurance Glossary A–G — Actual Cash Value to Guaranteed Replacement Cost

Glossary & Terms · InsureToday24 (BNW Services LLC), a licensed independent agency across MO, KS, NE, TN, OK, AR & CO.

# Insurance Glossary A–G — Actual Cash Value to Guaranteed Replacement Cost

Insurance has a language of its own, and this is part one of our complete A-to-Z reference. Every entry is defined in plain English, the way you'd actually use it when reading a policy, getting a quote, or filing a claim. BNW Services LLC, doing business as InsureToday24, is a licensed independent agency serving Missouri and Kansas (and parts of Nebraska). If a term still feels fuzzy after you read it, call or text Lucy at (573) 594-5148 — there are no dumb questions in insurance.

This file covers A through G. See also Glossary H–O and Glossary P–Z.

A

Actual Cash Value (ACV) — What property is worth today, calculated as replacement cost minus depreciation. A ten-year-old roof paid at ACV reflects its used value, not the price of a brand-new one. Compare Replacement Cost in the P–Z file.

Additional Insured — A person or entity added to your policy who gains certain coverage rights under it, usually by endorsement. Landlords, general contractors, and clients frequently require being named as an additional insured on a business policy before work begins.

Adjuster — The person who investigates a claim, assesses the damage, and determines the payout under your policy terms. A staff adjuster works for the carrier; an independent adjuster is contracted; a public adjuster is hired by the policyholder.

Aggregate Limit — The most a policy will pay for all covered losses during the policy period (usually a year), no matter how many separate claims occur. Common in liability and commercial policies. Once the aggregate is exhausted, coverage for further claims stops until renewal.

Aleatory Contract — An insurance contract in which the dollars exchanged are unequal and depend on an uncertain event. You may pay small premiums for years and collect a large claim, or pay and never collect. This is a defining legal feature of insurance.

Appraisal — A clause and process for resolving disputes over the *amount* of a loss (not whether it's covered). Each side hires an appraiser; the two select an umpire, and any two of the three agreeing sets the value.

Assignment — Transferring rights or benefits under a policy to another party. Many policies require the insurer's written consent for an assignment to be valid.

Automatic Premium Loan — A permanent life insurance provision that uses accumulated cash value to pay a premium that would otherwise lapse, keeping the policy in force.

B

Beneficiary — The person or entity that receives the death benefit from a life insurance policy or annuity. A *primary* beneficiary is first in line; a *contingent* (secondary) beneficiary receives it if the primary cannot.

Binder — Temporary proof of insurance that provides coverage until the formal policy is issued. A binder shows the coverage is in force and states the key terms; it typically has an expiration date. See Binders and Proof of Insurance.

Bodily Injury (BI) — Physical harm to a person — injury, sickness, or death — for which an insured may be legally liable. Auto and liability policies carry bodily injury limits, often written as a per-person and a per-accident figure.

Broad Form — A middle tier of property coverage that insures against a named list of perils broader than "basic form" but narrower than "special" (open-peril) form.

Business Owner's Policy (BOP) — A packaged policy that bundles general liability and commercial property (and often business income) for small and mid-sized businesses, usually at a better price than buying each separately.

C

Cancellation — Termination of a policy before its natural expiration, by either the insurer or the policyholder. State rules limit when and why an insurer may cancel and require advance notice.

Cash Value — The savings component inside permanent life insurance (whole or universal) that grows over time and can be borrowed against or withdrawn. Term life has no cash value.

Carrier (Insurer) — The company that issues the policy and pays covered claims. As an independent agency, we place your coverage with carriers appropriate to your situation.

Claim — Your formal request for payment under a policy after a covered loss.

Claims-Made Policy — A liability policy that covers claims *first made* against you during the policy period (and any retroactive period), regardless of when the incident happened. Contrast with an *occurrence* policy, which covers incidents that *happen* during the period no matter when the claim is filed. This distinction matters most in professional and specialty liability. See Occurrence.

Coinsurance — Two meanings depending on line. (1) In property insurance, a clause requiring you to insure to a stated percentage (often 80%, 90%, or 100%) of value, or share in the loss as a penalty. (2) In health insurance, your percentage share of a covered cost after the deductible (see the Health Insurance Terminology file).

Coverage — The protection a policy provides against specific risks (perils). Every policy has both what it covers and exclusions — risks it does not cover.

Certificate of Insurance (COI) — A one-page document proving that active coverage exists, its limits, and effective dates. Contractors, landlords, and clients often require one before work starts. See How to Get a Certificate of Insurance.

Concurrent Causation — A situation where a loss results from two or more perils, one covered and one excluded, occurring together. Policy "anti-concurrent-causation" language addresses how such losses are handled.

D

Death Benefit — The amount paid to beneficiaries when the insured person dies under a life insurance policy.

Declarations Page (Dec Page) — The front summary page of a policy listing the named insured, the property or risk covered, the coverages and limits, deductibles, premium, and policy period. It's the "at-a-glance" identity of your policy. See How an Insurance Policy Is Structured.

Deductible — The amount you pay out of pocket on a covered claim before insurance pays. Higher deductibles usually mean lower premiums because you retain more risk. See How Deductibles Work.

Depreciation — The loss in value of property over time due to age and wear. It's the gap between replacement cost and actual cash value.

Direct Loss — Physical damage to property from a covered peril (for example, fire burning a house). Contrast with *indirect* or *consequential* loss, such as lost business income while repairs happen.

E

Earned Premium — The portion of your prepaid premium the insurer has "earned" as time passes and coverage is provided. The rest is *unearned* and refundable if you cancel early.

Endorsement — A written amendment that adds, removes, or changes coverage on a policy. In property & casualty, "endorsement" is the common term; in life and health, the equivalent is often called a *rider*. See Riders & Endorsements Reference.

Errors & Omissions (E&O) — Professional liability coverage for claims that your professional services, advice, or work were negligent or inadequate. General liability does not cover this.

Exclusion — Something a policy will not pay for. Flood and earth movement, for example, are commonly excluded from standard homeowners policies, which is why separate flood coverage exists.

Experience Rating — Adjusting premium based on the insured's own past loss history — better-than-average experience earns credits, worse experience earns surcharges. Common in workers' compensation and commercial lines.

F

Face Amount — The stated death benefit of a life insurance policy shown on its face (the declarations), before any adjustments like loans or riders.

First-Party Coverage — Coverage that pays *you*, the insured, for your own loss (for example, your home's fire damage). Contrast with *third-party* (liability) coverage, which pays others for harm you cause.

Floater — Coverage that "floats" with movable property wherever it goes, used to schedule high-value items like jewelry, cameras, or musical instruments. See Jewelry Article Floater.

Fortuitous Loss — A loss that is accidental and unexpected from the insured's standpoint. Insurance is designed for fortuitous losses, not intentional or certain ones.

G

General Liability (GL) — Commercial coverage for third-party bodily injury and property damage arising from your business operations, premises, or products. A cornerstone of most business insurance programs.

Grace Period — A set number of days after a premium due date during which coverage stays in force and you can still pay without penalty. Common in life and health policies.

Guaranteed Insurability — A life insurance rider letting you buy additional coverage later at set dates without a new medical exam.

Guaranteed Replacement Cost — A property coverage that pays to rebuild your home to its previous condition even if the cost exceeds the policy limit. Stricter than ordinary replacement cost; availability and eligibility vary by carrier.

Where to Verify

Insurance in Missouri is overseen by the Missouri Department of Commerce & Insurance (insurance.mo.gov) and in Kansas by the Kansas Insurance Department (insurance.kansas.gov). The NAIC (naic.org) and the Insurance Information Institute (iii.org) both publish authoritative glossaries. When in doubt, look it up — or ask us.

Further Reading

References

1. National Association of Insurance Commissioners — https://www.naic.org

2. Insurance Information Institute — https://www.iii.org

3. Investopedia — https://www.investopedia.com

4. Missouri Department of Commerce & Insurance — https://insurance.mo.gov

5. Kansas Insurance Department — https://insurance.kansas.gov

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