Florida property insurance policies are written in a language that looks like English but functions differently. Terms like "actual cash value," "named storm," "appraisal," and "subrogation" have specific legal meanings that differ from their everyday usage -- and misunderstanding them costs property managers money. This glossary covers the terms Florida property managers encounter most often, in plain English.
Property Valuation Terms
ACTUAL CASH VALUE (ACV)
The replacement cost of damaged property minus depreciation. ACV is the lower of the two valuation methods. A 12-year-old roof covered at ACV may be depreciated so heavily that the insurer pays only a fraction of replacement cost. ACV policies require the policyholder to fund the depreciation gap out of pocket.
REPLACEMENT COST VALUE (RCV)
The cost to replace damaged property with new property of like kind and quality, without deducting for depreciation. RCV is the preferred coverage for Florida property owners because it pays for actual replacement rather than depreciated value. Many policies provide RCV for the structure but ACV for the roof -- read the endorsements carefully.
DEPRECIATION
The reduction in value of property due to age, wear, and obsolescence. Insurers use depreciation schedules to reduce ACV payouts. A roof with a 20-year expected lifespan that is 15 years old may be 75% depreciated -- meaning a $40,000 replacement is paid at $10,000 under ACV coverage.
Deductible Terms
DEDUCTIBLE
The amount the policyholder pays out of pocket before the insurance policy begins to pay. Florida property policies typically have two deductibles: an all-perils deductible (a flat dollar amount) and a hurricane deductible (a percentage of Coverage A). The higher deductible applies when the loss is caused by a named storm.
HURRICANE DEDUCTIBLE TRIGGER
The condition that must be met for the hurricane deductible to apply. Most Florida policies use a named storm trigger -- the National Hurricane Center must have designated the event as a named tropical storm or hurricane at or near the time of loss. Some policies have stricter triggers requiring Category 1 hurricane status.
NAMED STORM
A tropical weather system that has been officially named by the National Hurricane Center. Named storms include tropical storms (sustained winds 39-73 mph) and hurricanes (sustained winds 74 mph or higher). The named storm designation is the trigger for hurricane deductibles in most Florida policies.
Coverage Terms
WINDSTORM
Wind damage, including hurricane-force winds. Standard Florida property policies cover windstorm damage for inland properties. Coastal properties may require a separate wind-only policy through Citizens or the surplus lines market. The HVHZ (High Velocity Hurricane Zone) includes Miami-Dade and Broward counties and has stricter underwriting standards.
FLOOD (NFIP DEFINITION)
Under the National Flood Insurance Program, flood is defined as a general and temporary condition of partial or complete inundation of two or more acres of normally dry land or two or more properties from overflow of inland or tidal waters, rapid accumulation of surface runoff, or mudflow. Wind-driven rain is not flood under this definition. Storm surge is flood.
STORM SURGE
An abnormal rise of water generated by a storm above the predicted astronomical tide. Storm surge is the leading cause of hurricane fatalities and is classified as flood, not windstorm, for insurance purposes. It is not covered by standard property insurance -- it requires NFIP flood coverage or private flood coverage.
LOSS OF RENTS
Coverage that pays the landlord the rental income they cannot collect because the property is uninhabitable after a covered loss. Loss of rents coverage typically has a sublimit (often expressed as a percentage of Coverage A or a dollar amount) and a coverage period (typically 12 to 24 months). The trigger is uninhabitability due to a covered peril.
FAIR RENTAL VALUE
An alternative name for loss of rents coverage in some policies. Fair rental value pays the landlord the market rental value of the property during the period it is uninhabitable. The distinction between the actual contracted rent and the fair rental value can matter when market rents differ significantly from the contracted lease rate.
ORDINANCE AND LAW
Coverage that pays for the increased cost of rebuilding to current building codes after a covered loss. Without this coverage, the insurer pays to rebuild to pre-loss condition -- if codes have changed since original construction, the code-mandated upgrades are out of pocket. In Florida, with strict hurricane codes and frequent code updates, ordinance and law coverage is critical.
Claims Process Terms
SUBROGATION
The right of the insurer to step into the policyholder's shoes and sue the party responsible for causing a covered loss, after paying the claim. If a contractor causes water damage and the insurer pays, the insurer can pursue the contractor. Do not sign waivers of subrogation without insurance counsel.
APPRAISAL CLAUSE
A policy provision that provides a mechanism to resolve disputes over the dollar amount of a covered loss. Each party selects a licensed appraiser; the two appraisers select a neutral umpire; any two-of-three agreement is binding. Appraisal resolves valuation disputes, not coverage disputes. It is faster and cheaper than litigation.
PROOF OF LOSS
A formal document the policyholder submits to the insurer setting out the claimed amount and supporting it with documentation. Florida policies typically require submission of a sworn proof of loss within 60 days of the insurer's request. Missing this deadline can result in claim denial.
SWORN STATEMENT IN PROOF OF LOSS
A proof of loss that is signed and sworn under oath. Florida policies often require a sworn proof of loss as a post-loss obligation. Falsifying a sworn statement in proof of loss constitutes insurance fraud and can result in claim denial, policy rescission, and criminal liability.
Adjuster Terms
PUBLIC ADJUSTER
A licensed insurance professional who represents the policyholder -- not the insurer -- in negotiating and settling an insurance claim. Public adjusters are paid a percentage of the claim settlement (typically 10% to 20%). They are most cost-effective on large complex claims where the incremental recovery exceeds their fee.
INDEPENDENT ADJUSTER
An adjuster who is contracted by the insurer to investigate and assess claims but is not a direct employee of the insurer. Independent adjusters represent the insurer's interests, not the policyholder's, despite appearing to be neutral third parties.
STAFF ADJUSTER
An adjuster who is a direct employee of the insurance company. Staff adjusters handle claims assigned by the carrier and represent the carrier's interests in the claim assessment.
Market Terms
EXCESS AND SURPLUS LINES (E&S)
The insurance market for risks that admitted carriers cannot or will not write. Florida coastal properties are frequently placed in the surplus lines market because admitted carriers have left the market. Surplus lines policies are not subject to state rate regulation and do not have FIGA coverage if the carrier becomes insolvent.
ADMITTED CARRIER
An insurance company licensed by the Florida Office of Insurance Regulation to write insurance in Florida. Admitted carriers are subject to rate and form regulation and are backed by FIGA (Florida Insurance Guaranty Association) if they become insolvent.
NON-ADMITTED CARRIER
An insurance company that writes coverage in Florida on a surplus lines basis but is not licensed as an admitted carrier. Non-admitted carriers are not backed by FIGA, meaning policyholders have no guaranty fund protection if the carrier becomes insolvent.
FIGA (FLORIDA INSURANCE GUARANTY ASSOCIATION)
Florida's insolvency guaranty fund for admitted property and casualty carriers. If an admitted Florida carrier becomes insolvent, FIGA steps in to pay covered claims up to statutory limits ($300,000 for property claims). FIGA does not cover claims from non-admitted or surplus lines carriers.
Documentation Terms
LOSS RUN
A report showing the claims history for a property or portfolio over a specified period (typically three to five years). Loss runs show each claim, its date, type, amount paid, and whether it is open or closed. Insurers use loss runs to underwrite new policies and renewals. Request your loss run annually from your carrier.
CLUE REPORT
A Comprehensive Loss Underwriting Exchange report that shows the insurance claims history for a property over the prior seven years. CLUE reports are pulled by insurers when underwriting new policies. Property managers acquiring new properties should request the CLUE report before closing to understand prior claims history.
WIND MITIGATION INSPECTION
An inspection conducted by a licensed professional using the OIR-B1-1802 form that evaluates the wind resistance features of a Florida property: roof shape, roof-to-wall connection, roof deck attachment, and opening protection. The results are submitted to the insurer and can generate significant premium discounts. Valid for five years.
4-POINT INSPECTION
An inspection that evaluates four key systems of an older Florida property: roof, electrical, plumbing, and HVAC. Required by many Florida insurers for properties over a certain age (typically 25 to 30 years) before issuing or renewing coverage. The 4-point inspection is not a wind mitigation inspection -- they serve different underwriting purposes.
TERMS VARY BY POLICY -- ALWAYS READ YOUR ACTUAL POLICY LANGUAGE
The definitions in this glossary reflect common usage in Florida property insurance. Your actual policy may define terms differently, and the policy language controls. Always read the definitions section of your specific policy and compare it to the coverage sections. If there is a discrepancy between what your broker told you and what the policy says, the policy language governs.
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Start Free -- No Card Required →The Bottom Line
Florida property insurance has a specific vocabulary that determines how claims are paid and how coverage is applied. Property managers who understand the difference between ACV and RCV, know when their hurricane deductible triggers, understand what subrogation means for their vendor relationships, and can read a CLUE report before acquiring a property are in a fundamentally better position than those who rely on their broker to explain everything after a loss.