Insurance Glossary

Explore Common Terms


Our glossary is designed to empower you with knowledge about insurance terminology. Understanding these terms can help you navigate your insurance needs more effectively.


  • A

    Accident Forgiveness

    A feature that prevents your insurance rates from increasing after your first at-fault accident.


    Actual Cash Value (ACV)

    The market value of your vehicle at the time of a claim, considering depreciation.


    Additional Living Expenses

    Provides funds for temporary housing and other living expenses if your home becomes uninhabitable due to a covered peril


    Adjuster

    A person who investigates and settles insurance claims.

  • B

    Bodily Injury Liability

    Coverage for injuries to others for which you are responsible.


    Broker

    An independent agent who helps clients find insurance policies from various providers​.

  • C

    Collision Coverage

    Pays for damage to your vehicle caused by a collision with another car or object.


    Catastrophe Coverage

    Special coverage for events like earthquakes or hurricanes that standard policies typically exclude.


    Claim

    A formal request made by the policyholder to the insurer for payment of a covered loss​.


    Comprehensive Coverage

    Covers damage to your vehicle from non-collision events, such as theft, fire, or natural disasters.

  • D

    Declarations Page

    A summary of your insurance policy, including coverage, limits, and premiums.


    Deductible

    The amount you pay out of pocket before your insurance covers the remaining costs.


    Dwelling Coverage

    Covers the physical structure of your home against covered damages like fire, theft, or storms​.

  • E

    Endorsement

    An addition or change to your existing insurance policy that modifies or adds specific coverage​.


    Exclusion

    Specific conditions or circumstances not covered by the policy.

  • F

    Fault

    The degree of responsibility assigned to each driver in an accident.


    Flood Insurance

    A separate policy to protect against flood damage, often federally backed through the National Flood Insurance Program.


    Full Coverage

    Generally refers to a combination of liability, collision, and comprehensive coverages.

  • G

    Gap Insurance

    Covers the difference between what you owe on your car loan and the car’s ACV if your vehicle is totaled.


    Grace Period

    The time after your premium is due during which you can make a payment without losing coverage.


    Guaranteed Replacement Cost

    Coverage that pays the full cost of rebuilding your home, even if it exceeds the policy limit due to high construction costs.

  • H

    Hit and Run

    An accident where the at-fault driver leaves the scene without providing contact information.


    High-Risk Driver

    A driver who has a higher likelihood of filing a claim, often due to past violations or accidents.


    Home Inventory

    A documented list of all belongings in your home, often with photos and receipts, used to expedite claims​.


    Home Warranty

    Home warranties are contracts between homeowners and warranty companies that help cover costs if a home’s systems or appliances malfunction.


    Hurricane Deductible

    A separate deductible specifically for damage caused by hurricanes, common in coastal areas​.

  • I

    Indemnity

    Compensation for a loss, intended to restore the insured to their financial position prior to the loss.


    Insured

    The person or entity covered by the insurance policy.


    Insurer

    The company providing you with financial coverage in the case of unexpected events covered on your insurance policy.

  • J

    Jewelry Appraisal

    A jewelry appraisal is a document from an expert, called an “appraiser”, that provides an estimated value of a piece of jewelry.


    Joint Underwriting Association (JUA)

    An organization that provides insurance to high-risk drivers who cannot find coverage in the standard market.

  • K

    Key Replacement Coverage

    An optional add-on that covers the cost of replacing lost or stolen car keys.

  • L

    Liability Coverage

    Covers legal fees and damages if someone is injured on your property and you’re found legally responsible.


    Loan/Lease Payoff Coverage

    Similar to gap insurance, it helps pay off the remaining loan or lease balance if your car is totaled.


    Loss of Use

    This coverage (sometimes called additional living expenses) will help with temporary living expenses if your place becomes uninhabitable.

  • M

    Market Value

    The amount someone would pay for a home on the open market; typically confirmed by an appraisal when someone wants to buy it


    Multi-Policy Discount

    A discount for purchasing more than one policy from the same insurer, such as auto and home insurance.

  • N

    Named Driver Exclusion

    An endorsement that excludes specific individuals from coverage under your policy.


    Named insured

    The person or entity that is protected by an insurance policy


    No-Fault Insurance

    Coverage that pays for your medical expenses and lost wages regardless of who caused the accident.

  • O

    Occurrence

    An event that results in a covered loss.


    OEM Parts

    Original Equipment Manufacturer parts used for repairs to your vehicle.

  • P

    Personal Injury Protection (PIP)

    Covers medical expenses and lost wages for you and your passengers after an accident, regardless of fault.


    Personal Property

    Personal items within the home like furniture, appliances, and electronics


    Policyholder

    The person who owns the insurance policy and who has the right to change, cancel, or continue coverage and who receives the policy's benefits.


    Premium

    The cost of maintaining an insurance policy, typically paid monthly or annually.


    Property and Casualty Insurance

    This type of insurance will protect things you own (like your home or your belongings) and also includes liability coverage.

  • Q

    Quote

    An estimate of your insurance premium based on the provided information.

  • R

    Rental Reimbursement Coverage

    Pays for a rental car while your vehicle is being repaired after a covered loss.


    Replacement Cost

    The full amount to replace items without depreciation.


    Roadside Assistance

    A service that helps if your vehicle breaks down, includes towing, battery jump-starts, and flat tire changes.

  • S

    Scheduled Personal Property

    Additional coverage for valuable items, such as jewelry or art, that may exceed standard policy limits.


    Subrogation

    The process by which your insurance company seeks reimbursement from the responsible party for a claim it has already paid.


    SR-22

    A certificate of financial responsibility required for high-risk drivers to reinstate or maintain their driving privileges.

  • T

    Theft

    Theft is the act of intentionally taking someone's personal property to deprive them of its use.


    Total Loss

    When the cost to repair a damaged vehicle or property exceeds its value.

  • U

    Underinsured Motorist Coverage (UIM)

    Covers your expenses if you're in an accident with a driver who doesn’t have enough insurance.


    Underwriting

    The way insurance companies evaluate the risk of offering coverage to applicants

  • V

    Vandalism

    Vandalism refers to intentional damage caused by someone else to your place or your stuff without your consent.


    Vehicle Identification Number (VIN)

    A unique code used to identify individual motor vehicle

  • W

    Waiver of Depreciation

    Coverage that reimburses you for the full purchase price of your new vehicle without factoring in depreciation.


    Water backup and sump overflow coverage

    An endorsement that can be added to your homeowners insurance to help pay for damage caused by backed up sewers, drains, and sump pumps.


    Windstorm Coverage

    Protection specifically for wind-related damages, often essential in hurricane-prone regions.

  • X


  • Y

    Youthful Driver

    A term often used for drivers under the age of 25, typically associated with higher insurance premiums.

  • Z

    Zero Deductible

    An option that eliminates the deductible requirement for specific types of claims, often available for glass repairs.

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