Actual cash value - an amount equivalent to the replacement cost of lost or damaged property at the time of the loss, less depreciation.

Adjuster - a person who investigates and settles losses for an insurance carrier.

Agency - a firm that solicits insurance for one or more insurance carriers. It also may issue policies and adjust losses.

Agent - an insurance salesperson. An agent represents the insurance company, not the consumer. An independent agent usually represents two or more insurers in a sales and service capacity and is paid on a commission basis. An exclusive agent or captive agent represents only one company, usually on a commission basis.

Application - the request for insurance, giving information about the prospective policyholder.

Arbitration - a determination made by impartial experts of the value of property or the extent of damage. Arbitration is an alternative to litigation of matters in dispute.


Binder - a temporary insurance contract that provides proof of coverage until you receive a permanent policy. A binder is subject to payment of a premium.

Broker - an insurance salesperson who deals with agents and companies to find insurance for consumers. A broker represents the consumer, not the insurance company.


Cancellation - a termination of a policy before its normal expiration date.

Claim - a request for reimbursement for damages on an insured loss. Your claims to your company are first-party claims. Claims made by one person against another person's company are known as third-party claims.

Conditions - part of an insurance policy that states your obligations and those of your insurance company.


Declarations Page - the page your company sends as part of the policy which shows the terms, coverage limits, premium and endorsements.

Deductible - the amount you must pay from your own pocket for each claim.


Endorsement - a written or printed form attached to the policy that alters its provisions.

Exclusions - specific situations or circumstances listed in your policy describing when coverage does not exist.


Insurer - a company which, in exchange for a fee called a premium, agrees to pay all legitimate claims that may arise under your policy.


Lapsed Policy - a policy that has terminated at renewal for non-payment of premium.

Liability - a legally enforceable financial obligation caused by negligence.

Liability Insurance - insurance that pays when you are liable for injuries to other persons or damage to their property.


Negligence - failure to exercise a generally acceptable level of care and caution resulting in injury or damage to a third party.

Nonrenewal - when an insurer terminates the contract by electing not to renew the policy at the anniversary date.

North Dakota Insurance Guaranty Fund - a fund that pays an insurer's claims when the company is insolvent. All North Dakota licensed homeowners insurance companies belong to the North Dakota Insurance Guaranty Fund.


Occurrence - an event that results in an insured loss.


Policy Period - the amount of time an insurance contract or policy provides coverage.

Premium - the amount you pay for insurance.

Pro Rata Cancellation - revocation of a policy by an insurance company that returns to the policyholder the unearned premium. There is no reduction for expenses already paid by the insurer for that time period.

Proof of Loss - documents that you give the insurer to support your request for payment of losses. The company uses the documents to determine whether and how much it will pay. Examples include written repair estimates and police reports.


Short Rate Cancellation - cancellation by the insured of an insurance policy for which the returned unearned premium is diminished by administration costs incurred when the insurance company places the policy on its books.


Unearned Premium - the portion of the premium for the remaining time period that the policy will not be in force.

Underwriter - an individual in an insurance company who determines what insurance risks will be accepted and on what terms.