Dictionary – Umbrella Liability – Voluntary Market

UMBRELLA LIABILITYINSURES LOSSES in excess of amounts covered by other LIABILITY INSURANCE POLICIES; also protects the INSURED in many situations not covered by the usual LIABILITY POLICES.

UNALLOCATED BENEFIT – A POLICY PROVISION providing reimbursement up to a maximum amount for the cost of all extra miscellaneous hospital services but not specifying how much will be paid for each type of service.

UNALLOCATED LOSS EXPENSE – Salaries and other expenses incurred in connection with the operation of a CLAIM department of an INSURANCE carrier which cannot be charged to individual CLAIMS.


UNDERINSURED/UNINSURED MOTORIST COVERAGE – A form of INSURANCE that pays the POLICYHOLDER and passengers in his/her car for bodily injury caused by the owner or operator of an uninsured or inadequately insured automobile.


UNDERWRITER – 1) In SECURITIES, the BROKER that sells the issue and unless sold on a “best efforts” basis, agrees to purchase the shares not bought by the public; 2) in MORTGAGE lending, the one who approves or denies a LOAN based on the PROPERTY and the applicant; 3) in INSURANCE, one who INSURES another or takes certain RISKS; 3a) a company that receives the PREMIUMS and accepts responsibility for the fulfillment of the POLICY CONTRACT; 3b) the company employee who decides whether or not the company should assume a particular RISK; 3c) the AGENT who sells the POLICY.

UNDERWRITING – The process of selecting RISKS for INSURANCE and determining in what amounts and on what TERMS the INSURANCE COMPANY will accept the RISK.

UNDERWRITING PROFIT OR LOSS – The amount of money which an INSURANCE COMPANY GAINS or LOSES as a result of its INSURANCE operations,  EXCLUDING INVESTMENT transactions and federal INCOME taxes.

UNDIVIDED INTEREST – Any interest held by CONCURRENT OWNERS in which the percentage of ownership interest is individually identified but the PROPERTY itself is not physically divided.

UNDUE INFLUENCE – Also known as DURESS – The threats or intimidation used against someone to force them to act against their will.

UNEARNED INCREMENT – A form of APPRECIATION caused by externalities, such as INFLATION, superior public services, well-maintained PROPERTIES near the subject PROPERTY, etc.

UNEARNED PREMIUM – The portion of a PREMIUM that a company has collected but has yet to earn because the POLICY still has unexpired time to run.


UNIFIED CREDIT – A one-time credit of $192,800, usually applied against federal ESTATE TAXES, that is available to every individual’s ESTATE. The credit also can be used for payment of federal GIFT TAXES during that individual’s lifetime.

UNIFORM COMMERCIAL CODE (UCC) – A body of law which attempts to standardize and regulate the transfer of PERSONAL PROPERTY particularly in COMMERCIAL transactions or transfers in bulk.

UNIFORM POLICY PROVISIONS – Part of the INSURANCE laws of all fifty states and the District of Columbia, statutory POLICY PROVISIONS of HEALTH INSURANCE POLICIES which specify some of the rights and obligations of the INSURED and the COMPANY.

UNIFORM PREMIUM – A rating STRUCTURE in which one PREMIUM applies to all

INSURED, regardless of age, sex, or occupation.

UNIFORM RESIDENTIAL APPRAISAL REPORT (URAR) – A standard form for reporting the APPRAISAL of a DWELLING. Required for use by the major SECONDARY MORTGAGE purchasers, it provides numerous checklists and appropriate definitions and certifications that are printed on the form.


INTEREST greater than that permitted by state law. In most states, USURY limits vary according to the type of LENDER and type of LOAN; federal laws have passed to pre-empt certain USURY limits under certain conditions.

UNIFORM SETTLEMENT STATEMENT – Also known as HUD-1 FORM – The form prescribed by the REAL ESTATE SETTLEMENT PROCEDURES ACT for federally related MORTGAGES, which must be prepared by whoever handles a CLOSING, must contain certain relevant CLOSING information and must be given to buyer and seller.

UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICES (USPAP) – A set of requirements covering research and reportings promulgated by the APPRAISAL FOUNDATION and adhered to by its members.

UNILATERAL CONTRACT – A CONTRACT which is one-sided; that is, in which one party promises to do something without receiving any promise to do something from the other party. The only UNILATERAL CONTRACT in REAL ESTATE is the OPTION.

UNIMPROVED PROPERTYLAND that has received no construction, DEVELOPMENT or SITE preparation.

UNINCORPORATED ASSOCIATION – An organization formed by a group of people. If the organization has too many characteristics of a CORPORATION it may be treated like one for INCOME TAX purposes.

UNINSURABLE RISK – One not acceptable for INSURANCE due to excessive RISK.

UNINSURED/UNDERINSURED MOTORIST COVERAGE – A form of INSURANCE that pays the POLICYHOLDER and passengers in his/her car for bodily injury caused by the owner or operator of an uninsured or inadequately insured automobile.

UNINSURED MOTORIST PROPERTY DAMAGE (UMPD) – Vehicle INSURANCE available in some jurisdictions to physically pay for DAMAGE due to UNINSURED MOTORISTS (only).

UNIT – In MULTI-FAMILY RESIDENTIAL PROPERTY, a suite of rooms making up a RESIDENCE for one TENANT, it is generally characterized by a private entrance and some method of individuality from other UNITS in the BUILDINGS or COMPLEX.

UNIT-IN-PLACE METHOD – A technique used by APPRAISERS to estimate the new REPRODUCTION COST of a STRUCTURE. The method involves estimating the cost of producing and installing individual components, such as the foundation, exterior walls, and plumbing. Similar methods include the trade-breakdown method and segregated-costs method.

 UNITIES OF OWNERSHIP – Associated with the creation of a JOINT TENANCY, the four unities of ownership are (1) time, (2) TITLE, (3) interest, and (4) possession.

UNIT-IN-PLACE METHOD – Also known as SEGREGATED COST METHOD – A method of estimating construction costs in which the total IMPROVEMENT cost is based on the costs of the various components, including their purchase and installation.

UNIVERSAL AGENT – Usually created through a POWER OF ATTORNEY, the person who is empowered to represent the PRINCIPAL in all facets of the PRINCIPAL’S business.

UNIVERSAL LIFE INSURANCE – A FLEXIBLE PREMIUM LIFE INSURANCE POLICY under which the POLICYHOLDER may change the DEATH BENEFIT from time to time, with satisfactory EVIDENCE OF INSURABILITY for increases, and vary the amount or timing of PREMIUM PAYMENTS. PREMIUMS, less expense charges, are credited to a POLICY account from which MORTALITY charges are DEDUCTED and to which

INTEREST is credited at a RATE which may change from time to time.

UNREALIZED GAIN – The excess of current MARKET VALUE over cost for an ASSET that is unsold.

UNRECORDED DEED – An instrument that transfers TITLE from one party to another party without providing public notice of change in ownership. RECORDING is essential to protect one’s interest in REAL ESTATE.

URBAN LAND INSTITUTE (ULI) – A nonprofit organization providing research and information on LAND use and DEVELOPMENT. Among the many publications of the ULI are the periodical Urban Land and Environmental Comment and several development guides for specific type of land use.

URBAN PROPERTYREAL ESTATE located in an urban area, generally characterized by relatively higher DENSITY DEVELOPMENT and extensive availability of city water and sewer services.

URBAN RENEWAL – The process of REDEVELOPING deteriorated sections of the city, often through DEMOLITION and new construction. Although URBAN RENEWAL may be privately funded, it is most often associated with government renewal programs.

USUFRUCTORY – One having the use of something.  For example, if someone owns water but it flows under another’s PROPERTY that person can also use it.

USURY – Charging a RATE of INTEREST greater than that permitted by state law. In most states, USURY limits vary according to the type of LENDER and type of LOAN; federal laws have passed to pre-empt certain USURY limits under certain conditions. Charging more for the use of money than the lawful rate of interest. Usury rates vary from state to state.

UTILITIES – 1) Services, such as electricity, water, gas, sewer and telephones, that are generally required to operate a BUILDING; 2) the periodic charges for such services.

UTILITY EASEMENT – Use of another’s PROPERTY for the purpose for laying electric, gas, water and sewer lines.

VACANCY RATE – The percentage of all UNITS or space that is unoccupied or not RENTED. On a PRO-FORMA INCOME STATEMENT a projected VACANCY RATE is used to estimate the vacancy allowance, which is deducted from potential GROSS INCOME to derive EFFECTIVE GROSS INCOME.

VACANT LANDLAND not currently being used which may have UTILITIES and OFFSITE IMPROVEMENTS.

VACATE – To move out.

VACATION HOME – A DWELLING used by the owner occasionally for recreational or resort purposes which may be RENTED to others for a portion of the year. INCOME TAX DEDUCTIONS pertaining to vacation homes depend on the frequency of use by the owner. Generally, a business LOSS cannot be claimed on a vacation home.

VALID – 1) Having legally binding force; 2) legally sufficient and authorized.

VALID CONTRACT – A legally sufficient CONTRACT, one that is binding on and enforceable against all parties.

VALUABLE CONSIDERATION – Anything of an identifiable monetary VALUE used to induce a person to enter into a CONTRACT, including a promise to do something or a promise to not do something.

VALUATION – 1) Estimated worth or price; 2) the act of estimating the worth of a thing.

VALUE – 1) The worth of all the rights arising from ownership; 2) the quantity of one thing that will be given in exchange for another.

VALUE IN USE – The worth of a PROPERTY in a certain use, typically as it is currently being used which may be greater or less than its MARKET VALUE.

VARA – A measurement or unit of length.

VARIABLE ANNUITY – An ANNUITY CONTRACT in which the amount of each periodic income payment may fluctuate. The fluctuation may be related to SECURITIES MARKET VALUES, a COST OF LIVING INDEX or some other variable factor.

VARIABLE ANNUITY – An ANNUITY under which the BENEFIT varies according to the INVESTMENT results of a LIFE INSURANCE COMPANY’S SEPARATE ACCOUNT, usually invested primarily in COMMON STOCKS.


VARIABLE EXPENSES – Also known as VARIABLE CHARGESPROPERTY operating costs that increase with occupancy.

VARIABLE INTEREST RATE – Generally governed by an appropriate INDEX, an amount of compensation to a LENDER that is allowed to vary over the MATURITY of a LOAN.

VARIABLE LIFE INSURANCELIFE INSURANCE under which the BENEFITS relate to the VALUE of ASSETS behind the CONTRACT at the time the BENEFIT is paid. The amount of DEATH BENEFIT payable would never be less than the initial DEATH BENEFIT payable under the POLICY.

VARIABLE-MATURITY MORTGAGE – A long-term MORTGAGE LOAN under which the INTEREST RATE may be adjusted periodically. Payment levels remain the same but the LOAN MATURITY is lengthened or shortened to achieve the adjustment.

VARIABLE-PAYMENT PLAN – Any MORTGAGE repayment schedule that provides for periodic change in the amount of monthly payments. Changes may occur as a result of: the expiration of an INTEREST-ONLY period, FLEXIBLE PAYMENT MORTGAGE; a planned STEP-UP in payments, GRADUATED PAYMENT MORTGAGE or a change in the INTEREST RATE due to fluctuation in an INDEX, VARIABLE-RATE MORTGAGE.

VARIABLE RATE MORTGAGE (VRM) – A LOAN in which the INTEREST RATE may vary or float periodically throughout the TERM of the LOAN. The INTEREST fluctuations are based on a pre-selected INDEX.

VARIANCE – The written permission from a POLITICAL UNIT permanently allowing a STRUCTURE or a use which would otherwise be in violation of ZONING, such as the permission to build a room addition to a home within the SETBACK OR SIDE YARD area.

VARIABLE LIFE INSURANCELIFE INSURANCE under which the BENEFITS relate to the VALUE of ASSETS behind the CONTRACT at the time the BENEFIT is paid. The amount of DEATH BENEFIT payable would never be less than the initial DEATH BENEFIT payable under the POLICY.

VENDEE – The purchaser or buyer, particularly in reference to a LAND SALES CONTRACT or an INSTALLMENT CONTRACT.

VENDEE’S LIEN – A LIEN against PROPERTY under a CONTRACT of sale, to secure the deposit paid by a purchaser.

VENDOR – The seller, particularly in reference to a LAND SALES CONTRACT or an installment contract.

VENDOR’S LIEN – A MORTGAGE given by a GRANTEE (buyer) to a GRANTOR (seller) in part payment of the purchase price of REAL ESTATE.   See PURCHASE MONEY MORTGAGE

VENEER – Any brick or other masonry exterior finish laid against and fastened to the sheathing of a frame wall.

VENT – An opening, such as a pipe or duct, which allows the passage of air through a building for ventilation, such as in an attic.

VENTURE CAPITAL – Money raised for high-risk INVESTMENTS.

VERBAL THRESHOLD – In NO-FAULT AUTO INSURANCE states with a verbal threshold, victims are allowed to sue in TORT only if their injuries meet certain verbal descriptions of the types of injuries that render one eligible to recover for pain and suffering.

VERIFICATION – Sworn statements before a duly qualified officer that the contents of an instrument are correct.

VEST – A provision that a PENSION participant will, after meeting certain requirements, retain a right to all or part of the ACCRUED BENEFITS, even though the employee may leave the job before retirement.

VESTED – 1) Fixed; 2) absolute; 3) not contingent.

VESTED COMMISSIONS – Renewal COMMISSIONS payable to the writing AGENT or his ESTATE, whether or not he remains with the company.

VESTED INTEREST – An interest in REAL ESTATE, which is a present and complete interest.

VETERANS ADMINISTRATION (VA) – An agency of the federal government that guarantees LOANS made by approved lending institutions.

VIATICAL SETTLEMENT – Payment of a portion of the proceeds from LIFE INSURANCE to an INSURED who is terminally ill.

VICARIOUS LIABILITY – The responsibility of one person for the acts of another.

VICTORIAN HOUSE – The highly ornamented, massive style of architecture, decor and furnishings popular in 19th-century England.

VIGAS – The characteristic projecting roof beams used in ADOBE or PUEBLO HOUSES.

VIOLATION – An act or a condition contrary to law or to permissible use of REAL PROPERTY.

VOID CONTRACT – 1) An invalid or non-existent contract; 2) one that is not binding on or enforceable against any of the parties.

VOIDABLE CONTRACT – A CONTRACT which appears to be VALID but which is binding on and enforceable against only one of the parties, and may be voided at the discretion of the other party. Most VOIDABLE CONTRACTS occur between an adult and a MINOR or other INCOMPETENT.

VOLUNTARY ALIENATION – Legal term that describes a sale or gift made by the free will of the seller or DONOR.

VOLUNTARY LIEN – Any LIEN placed against REAL PROPERTY with the consent of or through the voluntary actions of the owner, such as a MORTGAGE LIEN.

VOLUNTARY MARKET – The market where one seeking INSURANCE obtains INSURANCE in the open market with no help from the state through an INSURER of his/ her own selection.

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