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Ch 3
Concepts of Home Ownership
Term | Definition |
---|---|
Coinsurance clause | A clause in insurance policies covering real property that requires the policyholder to maintain fire insurance coverage generally equal to at least 80% of the property's actual replacement cost |
Homeowners Insurance Policy | A standardized package insurance policy that covers a residential real estate owner against financial loss from fire, theft, public liability, and other common risks |
Liability coverage | Insurance that covers injuries or losses sustained within the home |
PITI (Principal, interest, taxes, and insurance) | The basic costs of owning a home -- mortgage principal and interest, real estate taxes, and hazard insurance |
Replacement cost | The construction cost at current prices of a property that is not necessarily an exact duplicate of the subject property but serves the same purpose or function as the original |