Insurance GlossaryBuffalo, NY

The fair market value of damaged or destroyed property at the time of the loss — calculated as replacement cost minus depreciation. Under New York Insurance Law, ACV is the default payout method unless your policy specifically includes a replacement cost endorsement.

Buffalo impact: On WNY’s older housing stock — pre-war two-families on the East Side, postwar Cape Cods in Cheektowaga and West Seneca — ACV payouts are frequently far below what repairs actually cost due to the age of components. A 40-year-old roof with a 20-year useful life remaining gets 50% depreciation applied. This is one of the most common reasons Buffalo homeowners find their fire or roof damage payouts don’t cover actual repair costs.

Coverage that pays for temporary housing and increased living costs when a covered loss makes your home uninhabitable. Standard homeowner’s policies in New York typically provide ALE equal to 20–30% of the dwelling coverage limit.

ALE coverage stops when the insurer determines the home is habitable again — which they may declare before you agree. If your ALE claim has been disputed or cut off, you can file a complaint with the NY DFS.

A licensed professional who investigates and evaluates insurance claims on behalf of the insurer. In New York, insurance adjusters must be licensed by the NYS Department of Financial Services. A public adjuster, by contrast, works for the policyholder — not the insurer — and is also separately licensed by NYS.

If you believe the insurer’s adjuster has undervalued your loss, hiring a licensed New York public adjuster is often the most effective first step before filing a DFS complaint.

An insurance company licensed and regulated by the New York State Department of Financial Services to sell insurance in New York. Admitted carriers are subject to NY Insurance Law rate and form filing requirements and are backed by the New York Property/Casualty Insurance Security Fund.

If your policy is with an admitted carrier in New York, you have full DFS complaint and arbitration rights. Non-admitted (surplus lines) carriers operate under different rules and have different consumer protections.

A contractual arrangement where a homeowner signs over their insurance claim rights to a contractor or restoration company, allowing the contractor to bill the insurer directly. New York has no AOB reform statute, meaning contractors can pursue insurers directly once an AOB is signed.

Exercise caution before signing an AOB — you may lose control of your claim negotiation and your right to settle directly with your insurer.

A temporary insurance contract providing coverage while a full policy is being underwritten and issued. In New York real estate transactions, lenders require a binder from the buyer’s insurer before a mortgage can close.

Buffalo selling impact: If your property’s history — prior claims, canceled policies, or unrepaired damage — makes it uninsurable, a buyer using financing cannot obtain a binder, and the sale cannot close. Cash buyers like Nickel City Buyers require no binder. See our policy cancellation guide.

A single coverage limit that applies to multiple properties or multiple categories of property under one policy. Common in landlord and multi-family policies covering several Buffalo rental units under a single dwelling limit.

A policy that covers a wider range of named perils than a basic form policy, but does not provide the open-perils (all-risk) coverage of a special form policy. Broad form policies common in older WNY rental property insurance typically name 17–18 covered perils explicitly.

The termination of an insurance policy before its expiration date. Under New York Insurance Law §3425, insurers must provide written notice of cancellation — generally at least 30 days for most reasons, and 15 days for non-payment of premium. Cancellation during the first 60 days of a new policy requires only 15 days notice for any reason.

After cancellation, the insurer must return the unearned portion of the premium. If you believe your policy was canceled improperly or without adequate notice, file a complaint with the NY DFS. See our policy cancellation guide.

A formal notice to an insurer that a loss has occurred and that coverage may apply. Filing a claim initiates the insurer’s investigation and adjustment process. In New York, insurers are required to acknowledge receipt of a claim within 15 business days and issue a coverage decision within a reasonable time.

A database maintained by LexisNexis that records insurance claims filed on a property for up to seven years. Insurers query a property’s CLUE report when writing new policies. In New York, the CLUE report follows the address, not just the owner — meaning claim history stays with the property when it sells.

Buffalo selling impact: A property with multiple prior claims or a canceled policy will show on the CLUE report. A new buyer’s insurer will pull this report and may rate the policy at a significantly higher premium or decline coverage entirely, making the property effectively unfinanceable. Under the federal Fair Credit Reporting Act, you have the right to request your property’s CLUE report from LexisNexis at 1-866-312-8076 and dispute inaccurate entries. See our insurance hub for more on CLUE reports and selling.

A policy provision requiring homeowners to insure their property to at least a specified percentage (typically 80%) of its replacement cost. If insured for less, the insurer reduces claim payouts proportionally. On older Buffalo properties whose replacement costs have risen faster than coverage limits, underinsurance and coinsurance penalties are common.

A doctrine where a loss is caused by two events occurring together — one covered, one excluded. New York courts have generally applied the efficient proximate cause rule, meaning if the primary or dominant cause of a loss is covered, the claim may be payable even if an excluded peril contributed.

Buffalo relevance: A storm (covered peril) weakens a roof, water intrudes, and mold develops. The insurer may try to deny the mold as an excluded peril. Whether concurrent causation doctrine applies depends on policy language and NY case law.

The portion of a homeowner’s policy that covers personal property — furniture, appliances, clothing, and similar items — against covered losses. Contents coverage is typically set at 50–70% of dwelling coverage. Standard policies cover personal property at actual cash value; replacement cost coverage requires an endorsement.

A period during which a property has no active insurance coverage. In New York, a coverage gap can result from a lapsed premium, a canceled policy, or a non-renewal that was not replaced in time. Properties with coverage gaps face difficulty obtaining new coverage and are unfinanceable with a mortgage until coverage is restored.

The summary page of your insurance policy that identifies the insured, the property, the coverage limits, the premium, the policy period, and the deductibles. The declarations page is the first document an adjuster or buyer’s lender will request. It does not contain the full policy terms — exclusions and conditions are in the policy jacket.

The amount a homeowner must pay out-of-pocket before insurance coverage kicks in. In New York, some policies include separate, higher deductibles for specific perils — particularly wind/hail deductibles that can be expressed as a percentage of the dwelling coverage rather than a flat dollar amount.

Buffalo relevance: A 2% wind/hail deductible on a $200,000 dwelling means you pay the first $4,000 of any wind or hail claim. On older WNY roofs, this can make a roof repair claim financially marginal after the deductible.

A written communication from an insurer stating that a claim has been denied, partially denied, or that the loss is not covered under the policy. Under New York Insurance Law, insurers must provide a written denial that specifies the policy provision, condition, or exclusion relied upon. A denial that does not cite specific policy language may be challengeable.

Always read the denial letter carefully and compare the cited exclusion to the actual policy language. Vague denials citing “wear and tear” or “lack of maintenance” without specific policy citation are frequently the basis for successful DFS complaints.

A reduction in the value of property due to age, wear, and deterioration. Insurers apply depreciation when calculating actual cash value (ACV) payouts. Depreciation schedules vary by component — roofs, mechanical systems, and structural elements each depreciate at different rates. Functional and economic obsolescence are separate from physical depreciation.

Buffalo impact: WNY’s housing stock is heavily weighted toward 1940s–1970s construction. Roofs, boilers, electrical panels, and plumbing systems in these homes often carry substantial depreciation that reduces ACV payouts significantly. See roof claim denial guide.

The New York State Department of Financial Services regulates insurance companies doing business in New York and enforces the New York Insurance Law. Buffalo homeowners can file complaints about unfair claim denials, improper cancellations, or insurer misconduct at dfs.ny.gov. The DFS has the authority to compel insurer responses and in some cases reverse coverage decisions.

Filing a DFS complaint does not waive your right to sue or arbitrate. It is generally a low-cost, accessible first step before pursuing legal remedies. The DFS complaint process typically takes 30–90 days.

The portion of a homeowner’s policy that covers the physical structure of the home — walls, roof, built-in appliances, and attached structures — against covered perils. Dwelling coverage is the foundational coverage limit from which contents, liability, and ALE limits are usually derived as percentages.

An amendment to a standard insurance policy that adds, deletes, or modifies coverage. Common endorsements on WNY policies include water backup/sump pump coverage, scheduled personal property, equipment breakdown, and extended replacement cost. Endorsements must be in writing and attached to the policy to be effective.

Critical point: Many Buffalo homeowners assume water backup is covered under their standard policy. It is not — it requires a specific endorsement, typically adding $50–$150 per year to the premium. See our water damage denial guide.

A specific cause, condition, or type of loss that is not covered under the policy, listed explicitly in the policy document. Standard homeowner’s policies in New York exclude flood, earthquake, normal wear and tear, intentional acts, mold (absent a specific endorsement), and sewer backup (absent an endorsement).

Buffalo context: The most consequential exclusions for WNY homeowners are flood/surface water exclusions (which affect basement water claims throughout Erie County’s aging housing stock) and wear-and-tear exclusions (which are used to deny roof and structural claims on older homes). See the water denial and roof denial guides.

An endorsement that pays more than the dwelling coverage limit if rebuilding costs exceed the insured value — typically an additional 20–50% above the policy limit. Distinct from guaranteed replacement cost, which has no cap. Extended replacement cost protection is especially relevant when construction costs surge after a major regional loss event.

An explicit exclusion in standard homeowner’s policies for losses caused by flood, surface water, storm surge, overflow of a body of water, and water that backs up through sewers or drains. Flood damage requires separate coverage through FEMA’s National Flood Insurance Program (NFIP) or a private flood insurer.

This is one of the most litigated exclusions in WNY insurance. Insurers frequently deny water damage claims in Buffalo basements as “flooding” even when the cause is internal pipe failure or foundation seepage — which may be covered. The distinction between groundwater infiltration (excluded) and sudden pipe discharge (covered) depends heavily on the policy language and the specific mechanism of entry. See our full water damage denial guide.

Insurance purchased by a mortgage lender on a borrower’s behalf when the borrower’s own homeowner’s policy has lapsed or been canceled. Force-placed policies protect only the lender’s interest, not the homeowner’s equity or personal property. Premiums are typically far higher than standard market rates and are billed to the borrower.

If your policy was canceled and your lender has force-placed insurance, you are paying a significant premium for coverage that does not protect you. This is a strong indicator that selling may be the more economical path.

A valuation method that pays the cost to replace damaged property with a functionally equivalent modern material, even if that material is less expensive or less elaborate than the original. Relevant to older Buffalo properties with plaster walls, decorative woodwork, or obsolete mechanical systems where exact replacement would be cost-prohibitive.

A period after a premium due date during which a payment can be made to keep a policy in force without a lapse. Under New York Insurance Law, homeowner’s policies do not have a statutory grace period — the grace period, if any, is contractually defined in the policy. Many NY homeowner policies do not provide a grace period for non-payment.

This is different from life and health insurance, which have statutory grace periods under NY law. For homeowner’s policies, a missed premium payment can trigger cancellation without a grace period if the policy does not provide one. Review your declarations page carefully.

An endorsement that pays the full cost to rebuild the insured dwelling regardless of the policy limit, with no cap. Less common than extended replacement cost and typically more expensive. Provides the strongest protection against underinsurance but requires regular policy review to ensure the home is adequately described.

The most common homeowner’s insurance form in the United States, covering the dwelling on an open-perils (all-risk) basis — meaning all perils are covered except those specifically excluded. Personal property is covered on a named-perils basis under a standard HO-3. Most single-family homes in Buffalo and Erie County are insured under HO-3 or equivalent forms.

Insurance for condominium unit owners, covering the interior of the unit and personal property. The condo association carries a master policy (HO-A) covering common areas and the building structure. In Buffalo’s converted condominiums — particularly in Allentown, downtown, and Elmwood Village — understanding the boundary between unit coverage and master policy coverage is critical.

A contractual clause in which one party agrees not to hold another liable for certain damages or losses. In insurance contexts, hold harmless agreements appear in contractor agreements and settlement negotiations. Signing a hold harmless as part of a claim settlement may waive rights to pursue additional damages.

A legal requirement that the policyholder have a financial stake in the insured property — meaning they would suffer a direct financial loss if the property were damaged or destroyed. In New York, insurable interest must exist at the time a loss occurs for a claim to be valid. Property owners, mortgage holders, and certain lessees all have insurable interest.

A credit-based score used by many insurers to help determine premiums. In New York, insurers using credit-based insurance scores must comply with NY Insurance Law §2606, which regulates their use and requires adverse action notices when a score results in a premium increase or declination.

The termination of an insurance policy due to non-payment of premium. A lapsed policy provides no coverage. In New York, a lapsed homeowner’s policy is reported to the insured’s mortgage servicer, which may trigger force-placed insurance at the borrower’s expense.

Coverage that pays a homeowner’s share of a special assessment levied by a homeowner’s association or condo association when the association’s master policy is insufficient to cover a loss. Relevant for Buffalo-area condo owners and townhome associations.

See Additional Living Expenses (ALE). The terms are used interchangeably on most policy forms. This coverage pays for hotel, restaurant, and other increased living expenses when the insured home is uninhabitable due to a covered loss.

A document from an insurer listing all claims filed on a policy over a specified period, including claim dates, types, and amounts paid. New insurers frequently request loss runs when underwriting a new policy. In New York, you have the right to request a loss run report from your current or prior insurer.

A loss run shows your claim history from a single insurer’s perspective. The CLUE report shows a broader history aggregated from multiple insurers across the industry. Both matter when shopping for new coverage.

A false or misleading statement on an insurance application that, if known by the insurer, would have affected the decision to issue the policy or the premium charged. In New York, an insurer may rescind a policy for material misrepresentation, but only within two years of the policy’s effective date under the incontestability provisions of NY Insurance Law.

The policyholder’s obligation to take reasonable steps to prevent further damage after a covered loss occurs. Standard homeowner’s policies in New York require the insured to protect property from further loss after an incident — for example, covering a damaged roof with a tarp after a storm. Failure to mitigate can reduce or void a claim.

Buffalo context: After a fire or significant roof event, document all emergency mitigation steps with dated photographs. Insurers will review whether you took reasonable steps to prevent secondary damage.

Coverage for mold remediation is typically excluded from standard homeowner’s policies in New York unless the mold results directly from a covered peril (such as a sudden pipe burst). Under New York Insurance Circular Letter 2002-3, insurers may limit mold coverage and must disclose limitations in the policy. Most standard NY policies exclude mold that results from long-term moisture, flooding, or inadequate maintenance.

WNY context: Buffalo’s aging housing stock, combined with heavy lake-effect moisture, creates endemic mold conditions in many pre-war basements and attics. Insurers routinely classify mold in these properties as excluded maintenance issues. See our water damage denial guide and mold removal resource.

A policy provision that protects the mortgage lender’s interest in the insured property independently of the homeowner’s interest. Under a standard mortgage clause, the lender’s coverage is not voided by the homeowner’s acts or omissions — meaning even if a claim is denied for the homeowner, the lender may still receive payment up to the outstanding mortgage balance.

A policy that covers only the specific perils listed in the policy document. If a peril is not named, it is not covered. Named perils policies (common on personal property coverage under HO-3 forms) typically include fire, lightning, windstorm, hail, explosion, riot, aircraft, vehicles, smoke, vandalism, theft, falling objects, weight of ice and snow, accidental overflow of water, and sudden tearing of heating/cooling systems.

The insurer’s decision not to renew a policy at the end of its term. Under New York Insurance Law §3425, insurers must provide written notice of non-renewal at least 45 days before the expiration date (60 days for policies in force three or more years). Non-renewal is different from mid-term cancellation — the policy remains in force until its natural expiration date.

A non-renewal does not create an immediate coverage gap, but it leaves 45–60 days to find replacement coverage. If no replacement coverage is obtained, the property becomes uninsured at expiration. See our policy cancellation guide.

A liability policy that covers claims for incidents that occur during the policy period, regardless of when the claim is filed. Most homeowner’s liability coverage operates on an occurrence basis. Relevant when a neighbor files a claim for injury that occurred during your policy period even after the policy has expired.

A policy form that covers all causes of loss except those specifically excluded. More favorable to the policyholder than named perils coverage because the burden falls on the insurer to prove an exclusion applies, rather than on the homeowner to prove a named peril caused the loss. Standard HO-3 policies cover the dwelling on an open-perils basis.

Coverage for the additional cost of rebuilding to current building codes after a covered loss, when the original structure did not comply with current codes. Particularly relevant in Buffalo and Erie County, where many pre-war properties would require extensive code upgrades if damaged beyond a certain threshold. Without this coverage, the gap between standard rebuilding cost and code-compliant rebuilding cost is uninsured.

Buffalo OBI (Office of Building Inspections) enforces current code compliance on reconstruction. A fire that destroys 50% or more of a pre-war Buffalo structure may trigger full code compliance requirements — creating uninsured costs if ordinance or law coverage was not purchased.

The specific cause of loss covered or excluded under an insurance policy. Common covered perils include fire, lightning, windstorm, hail, and theft. Common excluded perils include flood, earthquake, war, nuclear hazard, and intentional loss.

The maximum amount an insurer will pay under a specific coverage. The dwelling limit (Coverage A) is the most critical limit on a homeowner’s policy. When the cost of rebuilding exceeds the policy limit, the homeowner bears the gap. Limits should be reviewed annually — construction costs in WNY have risen significantly, and policies written 5–10 years ago may be materially underinsured.

When an insurer cancels a policy mid-term, it must return the unused portion of the premium calculated exactly on a pro-rata (daily) basis. If the insurer cancels a $1,200 annual policy after 90 days, it must return $900. Under New York Insurance Law §3425, mid-term cancellation by the insurer (as opposed to the insured) must be pro-rata.

Contrast with short-rate cancellation: if you cancel your own policy mid-term, the insurer may return less than pro-rata — retaining a penalty. Check your policy for the short-rate cancellation schedule.

A formal, signed statement submitted by the policyholder to the insurer detailing the facts of a loss and the amount claimed. Under most New York homeowner’s policies, a proof of loss must be submitted within 60 days of the insurer’s request. Failure to submit a timely proof of loss can jeopardize a claim, although NY courts have allowed late submission where the insurer was not prejudiced.

A licensed professional who represents policyholders (not insurers) in negotiating insurance claims. In New York, public adjusters are licensed by the NYS Department of Financial Services. They typically charge a percentage of the claim settlement (5–15%) as their fee. A public adjuster can be valuable when a claim has been denied or significantly underpaid, particularly for complex losses involving fire, water, or structural damage on older Buffalo properties.

Verify NYS licensure before hiring a public adjuster. Unlicensed claim consultants operating in Erie County have been the subject of DFS enforcement actions.

A legal document waiving the right to pursue further claims against a party in exchange for a settlement payment. When an insurer offers a final settlement on a claim, they typically require the homeowner to sign a release. Once signed, the release typically bars any future claims for the same loss — even if additional damage is later discovered.

Never sign a release on a claim that involves fire, water, or structural damage without first consulting a public adjuster or attorney. Hidden damage — particularly in older Buffalo properties with wall cavities and unfinished basements — is frequently discovered after a partial settlement is reached.

The restoration of a canceled or lapsed policy to full coverage. In New York, reinstatement after a lapse for non-payment typically requires payment of all overdue premiums and may require evidence of insurability if the lapse was extended. A gap in coverage exists between the lapse date and the reinstatement date and is not covered even after reinstatement.

The cost to repair or replace damaged property with new materials of like kind and quality, without deduction for depreciation. Replacement cost coverage pays more than actual cash value coverage for the same loss. For older Buffalo homes, the difference between ACV and RCV payouts can be substantial — often tens of thousands of dollars on a roof or structural claim.

Most replacement cost policies release the full RCV payout in two stages: the ACV amount first, then the depreciation “holdback” after the repairs are actually completed. If you sell before completing repairs, you typically receive only the ACV amount, not the full RCV.

The voiding of an insurance policy from its inception, as if it never existed. Insurers may rescind a policy based on material misrepresentation on the application. Under New York Insurance Law, rescission is generally limited to the first two years of a policy’s existence and requires the return of all premiums paid.

A formal notice from an insurer that it is investigating a claim but reserves its right to deny coverage based on specific policy provisions. A reservation of rights letter does not mean a claim has been denied — it means the insurer has identified coverage questions it is investigating. Homeowners who receive reservation of rights letters should document the claim carefully and consider consulting an attorney.

The right of an insurer that has paid a claim to pursue recovery from a third party responsible for the loss. For example, if a neighbor’s negligence causes a fire that damages your Buffalo home, your insurer pays your claim and then pursues the neighbor for reimbursement. When you accept a claim payment, you typically assign subrogation rights to your insurer.

If you sign a release with a third party (such as a contractor whose work caused a loss) before your insurer pursues subrogation, you may have breached the policy condition and voided coverage. Do not settle with responsible third parties without notifying your insurer first.

A premium increase applied after a claim is filed. In New York, insurers that apply surcharges based on claims history must file their surcharge schedules with the DFS. Homeowners who receive a surcharge after filing a claim have the right to request an explanation and compare it against the insurer’s filed schedule.

Surcharges compound over time: a single claim in year one can result in elevated premiums for 3–5 renewal cycles. This is one of the primary mechanisms by which Buffalo homeowners find their premiums escalating past affordability after a loss event.

Coverage provided by non-admitted insurers who are not licensed in New York but are permitted to write policies for risks that admitted carriers refuse to cover. Common for high-risk or unusual properties. Surplus lines are not backed by the NY Insurance Guaranty Fund, and rate/form oversight is more limited. Buffalo properties with significant prior losses, extreme deferred maintenance, or unusual characteristics may be pushed to the surplus lines market.

A condition where the dwelling coverage limit on a homeowner’s policy is less than the actual cost to rebuild the home. Underinsurance means that in the event of a total loss, the policy will not pay enough to fully rebuild. In Western New York, where construction costs have risen significantly, many policies written 5–10 years ago are now materially underinsured.

The process by which an insurer evaluates a risk and decides whether to issue a policy, and at what premium. Underwriting decisions are based on the property’s construction type, age, condition, prior claims history (via CLUE report), credit score, and location. Properties in certain Erie County zip codes with high claim frequency may face higher premiums or declinations due to underwriting criteria.

A policy provision that suspends or limits coverage if the insured property is vacant for more than a specified period — typically 30 to 60 consecutive days. Under many NY homeowner’s policies, fire, vandalism, and water damage coverage may be voided if the home has been vacant beyond the threshold without a vacancy endorsement.

Buffalo relevance: This clause disproportionately affects inherited properties, out-of-state owners, and homeowners in pre-foreclosure. If a property has been vacant and a loss occurs, the insurer will investigate the duration of vacancy as grounds for denial. See our inherited property guide.

A policy that pays a predetermined amount in the event of a total loss, regardless of the actual value of the property at the time of loss. New York is not a valued policy state for residential property insurance — NY policies pay the lesser of ACV, replacement cost (if applicable), or the policy limit. Valued policies are more common in specialty marine and fine arts coverage.

The intentional relinquishment of a known right. In insurance, an insurer that continues to investigate a claim without raising a coverage defense in a timely manner may be found to have waived that defense under New York law. This is one reason why reservation of rights letters are used — to preserve defenses while the investigation continues.

Under New York Real Property Law §235-b, residential landlords must maintain rental units in a habitable condition — including functional plumbing, heating, and structural integrity. Failure to maintain habitability exposes landlords to rent withholding and housing court proceedings. This intersects with insurance when a landlord’s failure to repair an insured loss (such as a roof leak) results in tenant claims for habitability violations.

See our Landlord Resource Center for more on how insurance issues and habitability obligations interact for Buffalo rental property owners.

An exclusion found in virtually all homeowner’s policies that denies coverage for deterioration, rot, rust, mold, and general aging that occurs gradually over time. Wear and tear is considered a maintenance issue, not a fortuitous loss. Insurers frequently cite this exclusion to deny claims on older Buffalo homes where roofs, plumbing, and structural components show age-related deterioration.

The line between sudden loss (covered) and gradual wear and tear (excluded) is frequently contested. A roof that fails suddenly in a storm is generally covered; a roof that has been leaking for years and has caused interior damage may be denied as wear and tear. Documentation of the onset date of damage is critical. See the roof denial guide.

A separate, typically higher deductible that applies specifically to losses caused by windstorm or hail. In New York, wind/hail deductibles are often expressed as a percentage of the dwelling coverage (1–5%) rather than a flat dollar amount. Given Erie County’s exposure to lake-effect weather events and severe spring and fall storms, wind/hail deductibles significantly affect the economics of WNY roof and siding claims.

A 2% wind/hail deductible on a $250,000 dwelling means $5,000 out-of-pocket before the insurer contributes to a storm claim. For a roof replacement costing $8,000–$12,000, the math often makes filing a claim questionable from a premium-impact standpoint. See the roof denial guide.