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Glossary (F-H)


FACE - This is the first page of a policy.

FIRE - A spark, flame or glow that is hostile or not in a place intended.

FIRE INSURANCE - (1) Insurance that covers the insured against a loss caused by fire. (2) The field of insurance that provides insurance for many perils, including fire.

FIRST CALL SETTLEMENT - This is a situation where the adjuster has sufficient information in his possession prior to contact with an injured party or a party who has suffered property damage, to know that he or she wishes to settle the case, if the amount demanded is within reason. The adjuster then combines in one visit to the claimant, the gathering of necessary information and the settlement negotiation, resulting in the conclusion of the insurance claim.

"FIRST" NAMED INSURED - The first name that appears on the policy. This allows the insurer to notify the "first" named insured rather than contacting all the named insureds.

FIRST PARTY - This is usually the term used to describe claims made under the insurance policy by the insured, such as a claim for damage to his automobile or a claim for damage to his burned building.

FLOATER POLICY - This protection policy covers the property wherever it is; this is for movable property.

FORTUITOUS EVENT - An unforeseen accident.

GARAGE LIABILITY POLICY - This is a contract for an owner of a garage to provide him with the coverage he needs for the special hazards that are there.

GLASS COVERAGE FORM - This form is used to insure plate glass, lettering, frames and ornamentation.

GRACE PERIOD - A period following the premium due date during which payment of the premium may be made without penalty or loss of insurance.

GROSS EARNINGS BUSINESS INTERRUPTION - This insurance is to recover the gross earnings less expenses which discontinue after a loss.

GUEST LAW - This is a statutory provision changing the common law, setting forth the duty if a driver or owner to one riding in a motor vehicle as a passenger. In general, guest statutes provide that the passenger may not collect or bring suit against the driver unless the driver is guilty of willful and wanton conduct. In other words, this is a statute to protect drivers from minor mistakes that might cause injury to a guest. For instance, a driver of a vehicle picks up his next door neighbor as a favor to his neighbor, and is traveling down a city street at 35 miles per hour where the speed limit is 30 miles per hour. An accident ensues and the guest is injured. In this case, there is actually no gross negligence on the part of the driver and under the guest statue, his passenger is not entitled to recover damages. In another situation where the same driver was traveling 70 miles per hour in a 30 mile an hour zone, it could well be held that his conduct was willful and wanton and so thereby entitled the passenger to recover damages, even under the guest law.

HAZARD - A situation that increases the probability of a loss occurring arising from a peril. For example, slippery floors, unsanitary conditions, shingled roofs, congested traffic, unguarded premises, and uninspected boilers are all hazards.

HO-1 (Basic Fire Policy): This policy covers the dwelling, other structures such as garages, and personal property against fire, lightning, vandalism, malicious mischief, theft, and glass breakage. Loss of use and additional coverages are also included in all of the homeowners forms.

HO-2 (Broad): This policy covers the perils of HO-1 plus falling objects; weight of ice, snow, or sleet; accidental discharge from a plumbing, heating, air conditioning or sprinkler system (water from flood is excluded) or household appliance; tearing, cracking, burning, or bulging of a steam or hot water heating system; freezing of a plumbing; heating, air conditioning or sprinkler system or a household appliance; damage from artificially generated electricity; and volcanic eruption. Coverage for a number of the HO-1 perils (vehicles, smoke, glass breakage) is broadened in this form.

HO-3 (Special): This policy covers the dwelling and other structures on an all-risk perils basis. Personal property coverage includes the broad named perils insured under form HO-2, plus the peril of damage by glass or safety glazing material. Coverage on personal property may be added by attaching a separate endorsement.

HO-4 (Broad Coverage for Contents) Policy: This policy is designed primarily for tenants, and covers personal property and limited coverage for building additions, alterations, and improvements made by the insured. The named perils coverage on personal property is the same as that of HO-2.

HO-5 (Special) Policy: This policy is similar to the HO-3 policy but covers replacement cost of structures, without deduction for depreciation, and offers structure payments in excess of policy limits . Although this coverage is greater and the policy is generally better than an HO-3 policy, State Farm, in all it's policies, reserves its option to repair or replace the destroyed property. The contract of insurance actually can become a contract of construction, and the insurer can come onto a property to rebuild as a general contractor without input from the homeowner. Such a situation may result in hard feelings and/or legal action. In our adjusting experience, State Farm has enforced this provision on HO-5 policies, to the policy holder's detriment. Therefore, we suggest you consider this when deciding whether or not your insurer will be State Farm.

HO-6 (For Condominium Unit Owners) Policy: This policy is especially for residential condominium unit owners.

HO-8 (Modified Coverage): This policy is for homes not considered eligible for replacement cost coverage.

HOLD HARMLESS AGREEMENT - A contract under which the legal liability of one party for damages is assumed by the other party to the contract. This agreement does not apply nor govern the right an injured person to bring claim against both parties. It simply is an agreement between tow individuals that if one is forced to make payment, the other will reimburse him for the damages suffered.

HOME OFFICE - The place where an insurance company maintains its chief executive and general supervisory departments.

HOMEOWNERS POLICY - This is a Property and Liability Insurance contract that provides insurance against these perils.

HOUSEKEEPING - Maintenance, the general care, and cleanliness of the property that is insured.

Adjusters Insurance School
605 East McKellips Road
Mesa, Arizona, USA, 85203
Phone: 480-205-3414
Fax: 800-869-1929

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