House Insurance Glossary

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Accident Types

An accident is a peril that can occur in the home. Accident types are different types of accidents that might get covered by different parts of a policy or by different policies entirely.

Actual Cash Value

A house insurance policy type that pays out for losses based on the actual cash value of items involved in the loss claims. This is different from the other type of house insurance policy, which is based on replacement value.

Additional Insured

In domestic insurance policy, an additional insured is a person or entity that gets to enjoy the benefits of being covered under a policy aside from the named insured.

Additional Living Expense Payments

These are payments from a house insurance plan that are provided to help the household meet living expenses such as clothing, food, and even shelter when a home is damaged.

Adjuster

House insurance adjusters are the insurance company representatives who deal directly with homeowners on loss claims. When these claims are major, the adjuster will usually go to the property and personally assess the damage to make a determination of the insurance payout.

Agent

An agent is the person who will give you quotes on coverage when you are searching for a house insurance policy. There are locally based and national agents available.

Appraise

To appraise a house is to get an assessment of its exact value. For the purposes of house insurance, you would appraise a home in order to get an appropriately priced policy.

Basic Form Homeowner Policy

Basic form policies usually cover eleven named perils. These perils include fire, lightning, storm or hail, vandalism or malicious mischief, damage caused by aircraft and vehicles, personal liability, and others.

Blanket Insurance Policy

A blanket policy, the most common house insurance policy type, covers most damage types. However even with a blanket policy it is important to read the terms of coverage because different plans can vary.

Breach

A breach of an insurance contract is a legal cause of action in which one or more parties to that contract does not honor the terms of the agreement included therein.

Broker

A representative whose job it is to gather quotes from multiple insurance providers in an effort to find a customer the best deal. Brokers can be very helpful to customers trying to save on their house insurance.

Burglary Coverage

Usually included in a home policy, burglary coverage protects against losses due to home invasion. To make claims easier when this type of situation occurs, it is always good to have a detailed inventory of your possessions.

Cancellation of Policy

Typically done after a house is sold, policy cancellation can also happen if a policy holder wants to switch providers. Make sure to follow correct procedures when cancelling and avoid coverage lapses.

Claim

Filed against a house insurance policy any time a covered loss occurs. The homeowner is responsible for filing a claim, and getting this done sooner rather than later makes the whole process go more smoothly for all parties involved.

Claimant

The individual filing a claim is called the claimant. Before insurance companies will pay out any monies they must receive a claim from the claimant.

Complaint

Usually taken on by the insurance department of your home state, a complaint can be formally registered against your insurance provider. The filing process varies by state so if you are interested in filing a complaint you need to contact your state insurance department or visit their web site to learn about correct procedures.

Condo Insurance

House insurance specially designated for condominium owners, who have insurance concerns that are unique to them among homeowners. Losses can happen in condos just like they can in houses so this policy type is just as critical.

Contents Coverage

Contents coverage is the portion of your house insurance policy that protects your personal belongings and the contents of the house.

Contract

In a house insurance contract, all of the terms of the policy are defined and all coverage types are identified in writing. Going over the terms of the contract and making sure you understand them are very important before you buy, so that you are not surprised some time down the road.

Coverage

Coverage refers to the types and amounts of protection that are included in a house insurance policy. Different policy types might have different coverage limits, which are the maximum amounts the insurance provider will pay in a covered claim.

Covered Person

A covered person is anyone named in a house insurance policy. In most cases, spouses and children of the named insured are examples of a covered person.

Damages

Damages in this context refer to those damages that would be insurable by your house insurance plan.

Debris Removal

Debris removal refers to the service provided by a house insurance company covering the removal of debris from the home and property following a claim event. An example could be a falling tree that punctured the roof line of a house.

Deductible

A deductible is the financial amount that policy holders have to pay out of pocket before coverage is applied from a house insurance policy. Different portions of the policy each may have their own separate deductibles.

Depreciation

Depreciation is the reduction in financial value of property over time. In most cases you can't get reimbursed for depreciation in a house insurance plan.

Dwelling Policy

A less expensive policy to purchase is a dwelling policy, which only covers the dwelling itself and not the property or anything inside the dwelling either. Terms and conditions of these policies vary among insurers so anyone interested in a dwelling policy would need to find out exactly what is included and excluded from individual providers.

Earned Premium

The earned premium of a house insurance policy is the amount that was used to pay for it. For instance, if a six month plan is prepaid and you are three months into the policy period, the monetary value for those three months that have passed is the earned premium.

Effective Date

Quite simply the date that coverage becomes effective, the effective date is the day your house policy begins.

Endorsement

Also known as a rider, an endorsement is an addition to a policy that either expands or strengthens the coverage included in the plan. Endorsements add to the cost of house insurance but also add to their value.

Exclusions

Specific provisions written into a policy that deny coverage for certain named perils, property, or individuals are known as exclusions. They help define coverage by naming things that are not covered.

Expiration Date

The day the house insurance policy expires is the day it is no longer in force. To avoid a lapse, make sure to renew or get a new policy with another provider by the expiration date of your current coverage.

Face Amount

The maximum sum of money that house insurance providers will pay upon the occurrence of a covered loss event is called the face amount of that coverage.

First Party

The first party on a house insurance policy is the named insured or the person who is specifically listed on the policy.

Flood Insurance

Normally a separate endorsement on a policy, flood insurance covers the home against losses due to floods, which are normally not covered by house insurance plans. People who live in flood prone areas are quite frequently required to buy flood coverage.

Gap Insurance Coverage

Gap insurance coverage pays out for the difference between the actual cash value of a property and the amount you owe on it in the event of a covered loss.

Grace Period

Grace period of a house insurance policy is the amount of time that policy will still be in effect when the policy holder is behind on payments. It is measured in days after the payment is due.

Hazard Insurance

Also known as homeowners or house insurance, this is a policy that provides protection against any named perils.

Homeowners Insurance

Another term for hazard or house insurance, it protects the policy holder against specifically named hazards or perils. There are many different homeowner policies available to us as house owners, each at different rate levels.

House Insurance

House insurance is a policy that protects a homeowner against the direct effects of financial losses incurred as a result of any covered claim event.

Independent Adjuster

An independent adjuster makes assessments on loss claims on behalf of a house insurance provider, but is not someone who is directly employed by that provider.

Insurance Binder

An insurance binder is a temporary document that provides proof of insurance until a formal policy is issued. The binder is normally given out right when a policy is purchased and is used until the permanent documents arrive in the mail.

Insured

The named insured in a policy is the person specifically covered by that policy. Alternately, insured also means having a current insurance policy.

Insurer

The insurer in a policy is the insurance company that sells you the policy and administers it, meaning that they are the ones who will also pay out for loss claims.

Justified Complaint

A justified complaint is a complaint by an insured about an insurance company that has basis, one that demonstrates the company has violated the terms of the contract and has not met their obligations as defined in the policy language.

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Lapse

A lapse is any period of time that passes during which a house is not insured with a current and valid house insurance policy. Coverage lapses can cost money in a lot of ways, notably with higher premiums.

Liability Insurance

Liability pays out for losses incurred when the covered policy holder causes damage to another person's property or causes them medical or other expenses.

Limit of Liability

A written statement that serves to define the limited conditions and extent to which the disclaiming party may be found liable for losses is called a limit or limitation or liability.

Loss

A measurable monetary amount of damage caused to a property as a result of an insurable loss event.

Loss of Use Insurance

Loss of use coverage provides for additional living expenses for the insured policy holder to pay for a temporary place to stay while the insured residence is being repaired when losses make the residence unlivable.

Market Value

Market value is the current financial value of a property, including a house and any land and out buildings.

Material Misrepresentation

Material misrepresentation is significant (intentional or otherwise) misreporting of required information on an application for house insurance. If an insurance company ever gains access to the correct information, coverage can be denied among other possible consequences.

Medical Payments Coverage

Insurance payouts to cover the medical expenses of someone injured while on the insured premises to pay for necessary and reasonable medical expenses as defined in the terms of the policy.

Mortgage

A loan instrument available for any home buyer who cannot pay cash for a home purchase is called a mortgage. In most cases lenders will require those who hold mortgages with them to purchase house insurance.

Named Insured

The person who is listed on the declarations page of a house insurance policy is called the named insured.

Net Cash Value

The amount that would be paid to the insured or the insured's beneficiary if the remaining policy was surrendered in exchange for its remaining cash value. This value is calculated by taking the total face value of the policy, subtracting off any outstanding loans against that value and adding in any dividends that have accumulated.

Non Renewal

Different from cancellation, non renewal occurs when the house insurance provider decides not to renew the policy at its expiration. Habitual late payment of premiums and other reasons could cause an insurer to make this choice.

Other Structures Coverage

The part of a house insurance policy that covers other structures besides the main residence on the property is called other structures coverage. It could include a barn, for example.

Paid Up

Specific to insurance, this is term for a policy that has been paid in full.

Peril

A peril is any threat or hazard that has the potential to cause damage or harm to the property.

Personal Liability Protection Coverage

The portion of a policy that protects the insured against the potential financial cost of negligence judgments is called personal liability protection.

Personal Property Coverage

Personal property coverage is protection in a policy for items that are not part of the structure or the land, such as furniture in the home.

Policy

A policy is a contractual agreement between an insurance company and a policy holder. Both parties have rights and responsibilities under the terms of a house insurance policy.

Policy Owner

The person whose name is listed on the contract is called the policy owner. This is the person who owns the policy and is also the one responsible for paying for it.

Policy Period

The period of time that is covered by a house insurance policy is called its policy period. Typical policy periods are six months or a year from the effective date.

Premium

The amount of money you have to pay for a house insurance plan is the premium. That premium can and will vary according to the amount of coverage needed and the policy type chosen.

Premium Expense Charges

Premium expense charges are some monetary amount deducted from each premium payment, which are taken away from the amount credited toward the policy premium.

Property Damage

In insurance terms, damage to a property that leads to monetary loss of value or the need for repair.

Property Insurance

Insurance coverage that property owners can get against the financial cost of damage or loss to property is called property insurance.

Public Insurance Adjuster

Working in exchange for a portion of the claim settlement, a public insurance adjuster works on behalf of an insurance company to negotiate a settlement on an insurance claim on that company's behalf.

Quote

An estimate provided by an insurance company to a potential customer for the cost of their services is called a quote.

Rated Policy

A rated policy is one in which higher than standard charges are issued to reflect higher than normal risks of peril that exist at the insured property for one reason or another.

Reasonable Repairs

These are monies issued to the insured policy holder by the insurance company for the purpose of completing repairs to protect the house against further damage.

Renewal Policy

An extension of an existing policy for another policy period at expiration is called a renewal policy.

Replacement Cost

Different from actual cash value coverage, replacement cost coverage pays out for losses based on the present day cost to replace the item with a similar new one.

Return Premium

With a return premium policy, the insured person will get all premiums back if he or she outlives the term of the policy. This is what is also known as a forced savings account.

Rider

Also known as an endorsement, a rider is an addition to a policy that contains coverage not included in its basic package of protection.

Single Interest Insurance

Single interest insurance is coverage that is set up just for one party that has an insurable interest in a house or a piece of property. An example could be a lender taking out a single interest policy out on your house if you have a mortgage with them but are not carrying house insurance.

Standard Exclusions

The things that are not covered in a house insurance plan are its standard exclusions.

Subrogation

In its most common usage, subrogation refers to the efforts of an insurance company to recoup money it paid out for a claim in situations where another party or insurer actually should have paid out that claim.

Surcharge

Any extra charges added to the cost of the policy on top of the policy premium.

Terms

House insurance terms are the conditions agreed to in the contract, including language covered what is included and what is excluded from coverage.

Total Loss

Destruction of property to the extent that nothing of value is left and it cannot be restored back to its original condition is a total loss. Many house insurance plans only pay out their maximum limits of coverage to policy holders in total loss cases.

Underwriter

A specialist that reviews insurance applications that makes decisions on eligibility and pricing.

Underwriting

The process followed by underwriters to determine whether applicants will be accepted for coverage, and at what price.

Unearned Premium

In a prepaid house insurance policy, the amount of the premium that has not yet been used is called the unearned premium.

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Waiver

When an individual is offered coverage but declines that coverage, it is known as a waiver. This could refer to a whole policy or individual parts.

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