Glossary of Terms
A savvy consumer is a well-informed consumer, and a well-informed consumer is a satisfied policyholder. That is the premise behind this section of our site, the glossary of terms. Trying to make an informed decision about house insurance when you don’t understand any of the terms you encounter is impossible. Either you will end up frustrated and bewildered or you will act on misinformation, purchasing a policy that is ill-suited to your needs. We understand that house insurance jargon can seem like a foreign language, which is why we’ve created a glossary of terms to make your shopping experience less baffling and stressful.
We wrote a glossary of the most common house insurance terms with simple definitions that are easy to understand. We were thorough without going into gratuitous detail. All of the terms policy shoppers will encounter most frequently, such as premiums, deductibles, endorsements, etc.., are included in our glossary. In the glossary, only a brief definition of the term is provided for quick reference. However, our visitors can also click on the term for a more detailed, in-depth explanation of the word(s) and why it is relevant to the house insurance industry.
Click on any term below to view an expanded definition:
- Actual cash value - ACV is the value of the damaged or stolen item less depreciation at the time of loss.
- Adjuster - the insurance company representative trained to assess any damage and handle your claim.
- Appraisal - an evaluation of a policyholder’s property claim.
- Cancellation - cessation of coverage by the insurer or the policyholder before the home insurance policy’s expiration date.
- Claim - a policyholder’s request for reimbursement for a covered loss.
- Deductible - the amount of the loss for which the policyholder must pay out of pocket.
- Endorsement - an addendum to your home insurance policy that modifies the original terms. An endorsement can add, remove, or change coverage options.
- Exclusions - events or items that your policy does not cover.
- Floater - supplemental coverage added to the policy to cover high-value items, such as jewelry, firearms, antiques, electronic equipment, etc.
- Liability Coverage - portion of the policy that pays for injuries to another or damage to someone else’s property for which the policyholder is liable.
- Limit - the maximum benefit amount the insurer will pay out in the event of a loss.
- Loss - the monetary value of physical injuries or property damage.
- Named perils - itemized list of the perils covered by your policy.
- Non-Renewal - when an insurer refuses to renew a policy after it expires.
- Peril - an event that causes a loss to your property, such as a burglary or a windstorm. Home insurance policies have both covered and excluded perils.
- Premium - the cost of a home insurance policy, usually expressed on an annual basis.
- Replacement cost coverage - coverage that reimburses the policyholder for the amount of money it would take to purchase the damaged or stolen item new today.
- Risk - the likelihood of a loss.
- Settlement - the amount of money a policyholder accepts from the insurer as reimbursement for a covered loss.
- Umbrella policy - liability protection against losses that exceed the maximum coverage amount of the basic policy.
- Underwriting - the process of selection and classification of risk by the degree of insurability.