Florida property insurance has a vocabulary of its own. Understanding these terms is not academic -- it directly affects how much you recover on a claim, whether you can dispute a denial, and whether your policy structure actually matches your exposure. The following glossary covers the terms that matter most for Florida property managers, with practical context for each.
Coverage and Valuation Terms
ACTUAL CASH VALUE (ACV)
The depreciated value of property at the time of loss. Calculated as replacement cost minus depreciation. A 12-year-old roof that costs $20,000 to replace may have an ACV of $6,000 after depreciation is applied.
Why it matters: ACV coverage leaves a substantial gap between what the insurer pays and what repairs cost, particularly for roofs, HVAC systems, and other long-lived components. Florida SB 2A (2022) allowed insurers to offer ACV-only roof coverage, which many now do for older roofs.
REPLACEMENT COST VALUE (RCV)
The cost to repair or replace damaged property with materials of like kind and quality, without deducting for depreciation.
Why it matters: RCV coverage is almost always worth the premium difference. On a major storm claim, the gap between ACV and RCV payouts can be tens of thousands of dollars. Confirm that Coverage A is on an RCV basis and that the insured value is sufficient to cover full reconstruction costs.
DEDUCTIBLE
The amount you pay out of pocket before insurance coverage begins. Standard all-perils deductibles in Florida are flat dollar amounts, typically $500 to $2,500.
Why it matters: The all-perils deductible is different from the hurricane deductible. Many policyholders assume they have a $1,000 deductible and are surprised to learn the hurricane deductible is $10,000 or more.
HURRICANE DEDUCTIBLE (NAMED STORM DEDUCTIBLE)
A percentage-based deductible that applies when a named storm causes damage. Expressed as a percentage of Coverage A (dwelling value), typically 1%, 2%, or 5%. On a $500,000 property, a 2% hurricane deductible is $10,000.
Why it matters: Most Florida property managers do not convert their hurricane deductible percentage into dollar terms until they have a claim. Know the dollar amount for every property in your portfolio before storm season. It directly affects your reserve requirements.
DWELLING COVERAGE (COVERAGE A)
The coverage that pays to repair or rebuild the main structure of the insured property. Should be set at replacement cost -- the cost to rebuild from the ground up, not the market value of the property.
Why it matters: Market value and replacement cost are often different numbers. A property worth $300,000 in a distressed market may cost $450,000 to rebuild. Underinsuring Coverage A triggers coinsurance penalties and leaves you responsible for the gap.
LOSS OF RENTS
Coverage that pays your rental income when a covered peril makes the property uninhabitable and rental income is lost. Typically a sublimit within the policy, often 10-20% of Coverage A, for 12-24 months.
Why it matters: The default sublimit may be inadequate for your actual rent roll, particularly for multi-unit properties or high-rent coastal rentals. Calculate your maximum potential rental income loss for an 18-month repair period and compare to your sublimit.
Florida-Specific Terms
ASSIGNMENT OF BENEFITS (AOB)
A contractual transfer of your insurance claim rights to a third party, typically a contractor. The contractor then deals directly with the insurer and can sue under your policy.
Why it matters: Florida SB 2-D (2022) removed the one-way attorney fee provision that fueled AOB abuse. Never sign an AOB -- it gives the contractor control of your claim. Require contractors to work under a standard contract, not an AOB.
DEMOTECH RATING
A financial stability rating for Florida property insurance carriers from Demotech, Inc. Scale runs from A''''A (Unsurpassed) to M (Moderate). Most Florida mortgage lenders require at least an A rating.
Why it matters: When a carrier drops below an A Demotech rating, lenders may require replacement coverage on short notice. Monitor your carriers' ratings annually and watch for downgrades.
SURPLUS LINES
Insurance placed with non-admitted carriers -- companies not licensed in Florida but approved to write coverage for risks that admitted carriers will not accept. Subject to different regulatory requirements than admitted coverage.
Why it matters: Surplus lines carriers are not covered by FIGA (Florida Insurance Guaranty Association) if they become insolvent. Many Florida coastal properties are now insured on surplus lines. Know whether your policy is admitted or surplus lines.
ADMITTED CARRIER
An insurer licensed and regulated by the Florida Office of Insurance Regulation. Admitted carriers must file rates with OIR and are backed by FIGA in case of insolvency.
Why it matters: FIGA provides up to $500,000 in claim coverage if an admitted carrier becomes insolvent. Surplus lines carriers do not have this protection -- a significant distinction in Florida's volatile market.
ORDINANCE OR LAW COVERAGE
Coverage that pays the additional cost to bring a damaged property up to current building code during repairs, beyond what the base policy covers.
Why it matters: Florida has strict hurricane construction codes. Repairing a pre-2002 property to current code after a major loss can add 20-40% to construction costs. Without this coverage, you pay that difference out of pocket.
CLUE REPORT
Comprehensive Loss Underwriting Exchange -- a database of insurance claims history for a property. Insurers check CLUE reports when underwriting new policies.
Why it matters: A property with multiple prior claims may be difficult to insure or command significantly higher premiums. When acquiring a new property, order a CLUE report before closing to understand the claim history.
FORCE-PLACE INSURANCE
Insurance placed by a mortgage lender on a property when the borrower has allowed their policy to lapse. Coverage is typically expensive and minimal -- it protects the lender, not the property owner.
Why it matters: Force-place insurance typically costs two to three times standard market rates and provides only basic structural coverage. Avoiding a lapse is critical -- even a brief gap can trigger force-place, and getting the lender to cancel it after you restore coverage requires paperwork and delays.
Claims Terms
PUBLIC ADJUSTER
A licensed claims professional who works for the policyholder, not the insurer, to evaluate and negotiate an insurance claim. Fee is typically 10-20% of the claim settlement.
Why it matters: On complex claims of $25,000 or more, a public adjuster can identify coverage items a staff adjuster overlooks and negotiate a higher settlement. The fee is often offset by the settlement improvement. Verify FL DFS license before hiring.
PROOF OF LOSS
A sworn, signed statement of the amount you are claiming under your policy. Florida law requires submission within 60 days of the insurer's request. Missing this deadline can result in claim denial.
Why it matters: The proof of loss deadline is non-negotiable. Calendar the deadline immediately when you receive the request and do not submit before you have fully documented your damages -- but do not miss the 60-day window.
SUBROGATION
The insurer's right to pursue a third party that caused an insurance loss after paying the policyholder's claim. If a neighbor's negligence causes damage to your property and your insurer pays, they may pursue the neighbor.
Why it matters: Do not sign any release or settlement with a third party for storm-related damage without first confirming with your insurer -- you could inadvertently waive their subrogation rights and create policy complications.
CONCURRENT CAUSATION
A doctrine where a loss is caused by two events occurring together -- one covered, one excluded. Florida follows the "efficient proximate cause" rule: if the dominant cause is covered, the loss is covered.
Why it matters: In a hurricane, wind (covered) and flood (excluded) often cause damage simultaneously. How the damage is characterized -- wind vs. flood -- significantly affects coverage. Documenting wind damage separately from flood damage is critical in combined-peril storm events.
WIND MITIGATION CREDIT
A premium discount based on documented wind-resistant construction features, assessed through the OIR-B1-1802 inspection. All Florida admitted carriers are required to offer actuarially justified credits.
Why it matters: Wind mitigation credits can reduce the wind portion of your premium by 10-40%. The inspection costs $75-$150 and is valid for five years. Every property in your portfolio should have a current wind mitigation inspection on file.
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Start Free -- No Card Required ->The Bottom Line
Florida property insurance terms have real dollar consequences. The difference between ACV and RCV, between admitted and surplus lines, between CGCC and sinkhole coverage -- these distinctions determine how much you recover when you have a loss and whether you have coverage at all. Building fluency in this vocabulary is one of the most practical things a Florida property manager can do before filing a claim. For related guidance, see Florida landlord insurance requirements, the Florida property insurance audit checklist, and common reasons Florida insurance claims get denied.