Glossary of HOA Insurance Terms


Act of God

A natural disaster or force of nature, such as earthquakes, hurricane, and floods.

Actual Cash Value

This is the cost of replacing damaged or destroyed property with comparable new property, less depreciation and obsolescence. For example, a 5-year-old carpet would not be replaced at the current full value because of depreciation.

Additional Insured

An insured specifically named in an insurance policy.


A claims adjuster evaluates reported losses that may be covered by an insurance policy to determine how much should be paid by the insurance company for specific claims. Company adjusters are employed by insurance companies and represent their interests. Independent adjusters are hired by insurance companies on an as-needed basis and represent their interests. Public adjusters are hired by insureds to protect their interests.

Admitted Company

An insurance company licensed in the state in which the policy is purchased. Admitted carriers in the state of California must follow guidelines established by the California Department of Insurance. Admitted carriers are part of the California Insurance Guarantee Association (CIGA) which provides up to $500,000 in protection for policy holders should an admitted insurance company fail.


A person who sells and services insurance policies. There are two types of Insurance Agents:

  1. An Independent Insurance Agent offers the insurance products of many insurance companies and services clients by searching the market for the best price for the most coverage. The agent’s commission is a percentage of the premium paid and includes a fee for servicing the insured's policy.

  2. A direct or career agent represents only one company and sells only its policies. These agents are paid on a commission basis in much the same way as independent agents. These agents are often referred to as "captive agents" because they are unable to sell policies for any other company other than the one they represent. Examples are State Farm Insurance, Farmers Insurance and Allstate Insurance.