Montana Homeowners Insurance: Glossary of Terms

 

When shopping for Montana homeowners insurance, it is helpful to understand the terms that you will read and hear about. This allows you to better understand your policy and to make a better decision when it comes time to make the purchase.

Here is a list of the most common terms you will come across as you shop for Montana homeowners insurance broken down into sections to allow you to better digest their meaning and importance.  

 

 The People

You will be dealing with a variety of different people as you shop for homeowners insurance. When you have questions about your policy or ever have to file a claim, you will have to deal with the following people.

 

  • Adjuster: The person who evaluates the extent of the damage to your property and then attempts to settle your claim.
  • Agent: Someone who represents a Montana homeowners insurance company (can represent more than one) and works in a sales capacity for commission.
  • Broker: Someone who represents you and works with either agents or directly with a company to help you get the best homeowners insurance policy possible.
  • Homeowners Insurance Company: The company that provides homeowners insurance to you and the people you will ultimately have to deal with when purchasing a policy or filing a claim.
  • Underwriter: The person or persons who determine the viability of your property and you as being insurable. They determine whether or not you get Montana homeowners insurance.

 

Policy Terms

As you read over your Montana homeowners insurance policy you will come across the following terms that will define your policy as far as what it covers and the extent of the coverage.

 

  • Declaration: The meat and potatoes of the policy that includes standard information such as your name, address, contact information, and policy basics such as deductibles, limits, etc.
  • Endorsement/Rider: Additions to your insurance policy that will generally allow for more comprehensive coverage, though any stipulation written into the policy is considered an endorsement.
  • Exclusion: Situations or perils that are not covered by your Montana homeowners insurance policy. For example, flood damage is not covered by a standard homeowners insurance policy.
  • Liability Coverage: Coverage for damage to other’s property or to their person that you are liable for. Essentially, it protects you from personal lawsuits in specific situations.
  • Limits: The absolute maximum that your Montana homeowners insurance company will pay for an insured peril. After which, you will be responsible for repairs or replacement out of your own pocket.
  • Peril: What causes the damage or loss: some perils are covered and others may not be. Examples include fire, wind, hail and flooding.
  • Premium: What you have to pay for the insurance at given intervals either monthly, yearly or semi-yearly.

 

Claim Settlement

These are the terms you will be dealing with in the event that you have to put in a claim against your Montana homeowners insurance. It is important to know these before deciding on a policy as many of these items determine how your claim is settled and the amount you can expect from the settlement.

 

  • Actual Cash Value: The value of your property taking into consideration depreciation.
  • Appraisal: The act of determining the value of your home and property.
  • Conditions: The rules by which you must follow in order for a claim to be valid.
  • Deductible: How much you will have to pay out of your own pocket for a covered event before the insurance policy will begin paying for damages and repairs.
  • Depreciation: The loss of value of your property due generally to wear and tear and the need for repairs.
  • Market Value: The value of your home and property if it were put up on the market at a specific time.
  • Proof of Loss: A written statement that you have to provide to the Montana homeowners insurance company detailing the extent of the damage to your property.
  • Replacement Cost: How much it would cost to replace your home and property if everything was purchased new with not consideration for depreciation.

 

Online Rate Quotes

One term that you should quickly familiarize yourself with is online rate quotes. These are quotes on the cost of a Montana homeowners insurance policy that you can get from online sources. They cost nothing and do not obligate you to buy any policies; they simply are a tool to help you compare Montana homeowners insurance policies to see which offers you the most coverage at the best price.

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