Having trouble understanding the terminology you read when you want to learn more about your Abu Dhabi home insurance options? Here is a list of home insurance terms from ServiceMarket to help you make a good decision when you are choosing a policy:
Accident – An unintended event that causes injury, damage, or loss.
Actual cash value (ACV) – An estimation of the present cost to replace a property. Depreciation is factored in the estimation.
Additional living expenses (ALE) – When damage by a hazard covered in the policy makes a home temporarily uninhabitable, ALE reimburses the policyholder for the cost of temporary living expenses such as accommodation and food costs.
Claim – A policyholder’s application to an insurance company after a loss or damage to property to get reimbursement.
Claimant – Any person who submits a claim.
Contents Coverage – Policy coverage for belongings against damage, destruction or loss. The contents coverage is based on the policy limit.
Deductible – The amount a policyholder must pay in case of a damage or loss before any remuneration by insurance company. The deductible is pre decided and part of the insurance contract.
Depreciation – The reduction in the price of a property over a period of time due to wear and tear.
Effective date – The date on which an insurance policy’s coverage begins.
Exclusion – A clause in the insurance contract that denies coverage for certain incidents.
Expiration date – The date on which a policy’s coverage becomes void.
First-party claim – A claim submitted by a policy owner against his own policy.
Floater – Additional coverage added to an insurance contract that covers a belonging wherever you take it. For example, a floater for an expensive piece of jewelry.
Inflation protection – Type of cover in an insurance contract which automatically adjusts a policy limit to factor in increases in the costs to repair or rebuild the property over time.
Insured – The policyholder.
Insurer – The insurance company.
Liability coverage – A type of cover that protects you against financial loss if you are found legally responsible for injuring someone or damaging their property.
Loss history – The number of insurance claims previously filed by a policyholder.
Market value – The current price of a home in the real estate market, including the value of land.
Material misrepresentation – A serious lie in the policy application form which could lead to the insured not being paid by the insurance company after making a claim.
Negligence – When your lack of care causes injury to another while on your property or theirs. The liability coverage of your homeowners policy covers this.
Non-renewal – The decision to not renew a policy after it has expired. The insurer or the insured can make this decision. In case of non-renewal by the insurance company, the policyholder is given a notice period and the reasons for non-renewal.
Personal property – Property that is either temporary or movable in some way, such as furniture, clothing, rugs, books, electronics, sports equipment, etc.
Policy – The insurance contract issued by the insurance company to the insured.
Policy owner – The person or party who owns the insurance policy.
Policy period – The time duration a policy is in effect.
Premium – A set amount paid by a policyholder to an insurance company to get and maintain insurance cover.
Proof of Loss – Information that needs to be provided to an insurance company before a deadline to make an insurance claim. Usually includes a form that needs to be filled with details of the loss.
Property damage – Physical damage to property.
Renewal – The decision of the insurance company to continue coverage after a policy’s expiration date. New terms and condition may be agreed upon before the policy goes into effect again.
Renters insurance – A type of insurance that covers the policyholder’s belongings against hazards such as loss, damage or theft on rented property.
Replacement cost – Pays the dirham amount needed to replace the lost or damaged personal property. Depreciation is not factored in replacement cost. The cover is based on the maximum limit of the policy.
Rider – An addition to the policy that increases the benefits payable under the policy. Sometimes, however, a rider is added to decrease the payable benefits.
Third-party claim – A claim filed by someone against another person’s insurance policy.
If you are shopping for home insurance in Abu Dhabi, get free quotes and comparison shop at ServiceMarket. We partner with reputable home insurance companies in Abu Dhabi to bring you home insurance solutions at the click of a button.