Insurance glossary
Look up the term without getting lost in the fine print
Each definition includes why the term matters, an example, and a common mistake to avoid.
A
Actual Cash ValueReplacement cost minus depreciation, depending on policy terms.Additional Living ExpenseCoverage that may help with increased living costs if a covered loss makes the home unlivable.Admitted CarrierAn insurance company licensed and regulated in a state’s admitted market.AppraisalA policy process that may help resolve disputes about the amount of loss.
B
C
CancellationTermination of a policy before its normal expiration date.CLUE ReportA claims-history report used by insurers during underwriting.CoinsuranceA policy condition requiring a certain level of insurance relative to value.ClaimA request for coverage or payment under an insurance policy after a loss.
D
E
Earthquake InsuranceSeparate coverage or endorsement for earthquake damage, depending on availability and wording.EndorsementA policy change that adds, removes, or modifies coverage.Equipment BreakdownOptional coverage for certain mechanical, electrical, or pressure-system breakdowns.EscrowA mortgage account that collects money for items such as property taxes and insurance.ExclusionPolicy language that removes or limits coverage for certain causes, property, or situations.Extended Replacement CostCoverage that may provide additional dwelling limit above the stated limit after a covered loss.Excess and SurplusA term often used for surplus lines or specialty insurance markets.
F
H
I
L
M
MortgageeThe lender or financial institution with an interest in the insured property.MitigationReasonable steps to prevent further damage after a loss.Market ValueThe price a property might sell for in the real estate market.Mold LimitationPolicy language limiting mold coverage, often by cause, amount, or conditions.
N
Named PerilCoverage that applies only to causes of loss specifically listed in the policy.Non-Admitted CarrierAn insurer allowed through surplus lines rules but not licensed in the admitted market for that state.NonrenewalA carrier’s decision not to offer another policy term after the current policy expires.Named-Storm DeductibleA deductible triggered by a named storm under policy rules.
O
Open PerilCoverage that generally applies unless a cause of loss is excluded.Ordinance or LawCoverage that may help with increased rebuilding costs due to building-code requirements.Other StructuresCoverage for structures not attached to the main home, subject to policy terms.Ordinance or Law CoverageCoverage that may help pay for code-required upgrades after a covered loss.
P
Personal PropertyCoverage for belongings, subject to limits, exclusions, and valuation rules.Public AdjusterA licensed claim professional hired by the policyholder to help present a claim.Percentage DeductibleA deductible calculated as a percentage of an insured value instead of a flat amount.PremiumThe amount charged for an insurance policy.Proof of LossA formal statement or documentation supporting a claim, when required by policy.
R
Recoverable DepreciationDepreciation that may be paid back after repair or replacement if conditions are met.Replacement CostA valuation method based on replacing damaged property with new comparable property, subject to terms.Roof ExclusionA policy term excluding or limiting coverage for the roof.Replacement Cost EstimateAn estimate of the cost to rebuild the home with similar materials and labor.
S
Service Line CoverageOptional coverage for certain underground service lines, depending on wording.Sewer BackupWater or sewage backing up through a sewer or drain pathway.SubrogationAn insurer’s right to pursue recovery from a responsible third party after paying a claim.Surplus LinesInsurance placed through a specialized market for risks that may not fit standard admitted carriers.Special LimitsLower sub-limits for certain categories of property.Scheduled PropertySpecific valuable items listed separately for broader or higher coverage, depending on terms.