Glossary Of Terms

The payout for damaged property based on its replacement cost minus depreciation for age and wear — what it's worth today, not what it costs to buy new.

Coverage that pays to repair or replace property with new items of like kind and quality, without deducting for depreciation.

An upgrade that helps rebuild your home even if costs exceed your policy limit — "extended" pays a set percentage above the limit; "guaranteed" pays the full rebuild cost.

The part of a homeowners policy that covers the physical structure of your home itself.

Coverage for your belongings — furniture, clothing, electronics — whether at home or, often, away from it.

Pays extra living costs, like a hotel and meals, when a covered loss makes your home temporarily uninhabitable.

A named-perils policy covers only the causes of loss it lists; an open-perils (all-risk) policy covers everything except what it expressly excludes.

The amount you pay out of pocket on a claim before your insurance begins to pay.

A written amendment that adds, removes, or changes coverage on your policy.

Extra coverage that itemizes high-value possessions — jewelry, art, watches — above the standard sub-limits, often with no deductible.

Pays the added cost of rebuilding to current building codes after a covered loss, which a standard policy may not fully cover.

Auto coverage that pays for damage to your own vehicle from hitting another car or object, or from a rollover.

Auto coverage for damage to your vehicle from non-crash events like theft, fire, hail, vandalism, or hitting an animal.

Coverage that pays for your injuries or damage when the at-fault driver has no insurance, or too little to cover the loss.

A policy that adds liability protection on top of your home and auto limits, usually in million-dollar increments.

A bundled policy combining general liability, commercial property, and business income coverage, usually for small to mid-size businesses.

The most an insurer will pay for all covered claims during a policy period, no matter how many separate claims occur.

The most a policy will pay for any single claim or event.

An occurrence policy covers incidents that happen during the policy period whenever the claim is filed; a claims-made policy only covers claims filed while the policy is active.

On a claims-made policy, the date on or after which an incident must have occurred to be covered.

An add-on that lets you report claims after a claims-made policy ends, for incidents that happened while it was in force.

A person or business added to your policy so they're also protected under your coverage — often required by contract.

A provision preventing your insurer from recovering costs from a third party you've agreed by contract not to hold liable.

A one-page document proving you carry coverage, listing policies, limits, and dates for clients or landlords.

A contract clause where one party agrees to absorb the other's losses or legal costs arising from the work.

Coverage that replaces lost profits and pays ongoing expenses when a covered property loss forces your operations to pause.

A clause requiring you to insure property to a set percentage of its value; underinsuring triggers a penalty at claim time.

A factor comparing your workers' comp claims history to peers, which raises or lowers your premium.

Coverage for movable business property — tools, equipment, goods in transit — that a fixed-location property policy doesn't cover.

Coverage for a set number of years that pays a death benefit if you die during the term; it builds no cash value.

Permanent coverage that lasts your entire life and builds guaranteed cash value over time.

Permanent coverage with flexible premiums and a cash-value component tied to interest or an index.

The savings portion of a permanent life policy that grows over time and can be borrowed against or withdrawn.

The amount paid to your beneficiaries when you die.

The person or entity you name to receive a policy's death benefit.

The time you must wait after a disability or care need begins before benefits start to pay.

How long a policy will keep paying benefits once a claim begins.

A definition that pays benefits if you can't perform your specific occupation, even if you could work in another job.

A stricter definition that pays only if you can't work in any job suited to your training and experience.

Benefits paid when you can still work but earn less because of your disability.

Coverage for extended personal or nursing care — at home or in a facility — that health insurance and Medicare generally don't pay.

A contract with an insurer that converts a sum of money into a stream of income, often for retirement (fixed, variable, or indexed).

The amount you pay, usually monthly, to keep your insurance coverage active.

The amount you pay for covered care each year before your plan starts to share costs.

A fixed dollar amount you pay for a covered service, such as $30 for a doctor visit.

Your share of a covered cost as a percentage — for example, paying 20% while the plan pays 80%.

The most you'll pay for covered care in a year; after you reach it, the plan pays 100%.

In-network providers have contracted rates with your plan; out-of-network care costs more or may not be covered.

A plan that requires you to use a network and get referrals from a primary care doctor to see specialists.

A plan that lets you see any provider without referrals, with lower costs for staying in-network.

The list of prescription drugs a health plan covers, often organized into pricing tiers.

A tax-advantaged account you own, paired with a high-deductible plan, for qualified medical costs; funds roll over year to year.

An employer account for medical costs funded with pre-tax dollars; funds usually must be used within the plan year.

An employer-funded account that reimburses employees for qualified medical expenses.

The set window each year when you can enroll in or change your health coverage.

A private-plan alternative to Original Medicare that bundles Parts A and B, often adding drug and extra benefits, using provider networks.

A private policy that pays the deductibles and coinsurance Original Medicare leaves to you, with nationwide provider access.

A formal request to your insurer for payment under your policy after a covered loss.

The initial report to the insurer that a loss has occurred, which opens the claim.

The insurance professional who investigates a claim, assesses the damage, and determines the payout.

A sworn statement and documentation of what was lost and its value, often required to settle a claim.

The summary page of your policy listing who and what is covered, the limits, deductibles, and premium.

A specific cause of loss, such as fire, theft, or windstorm.

A cause of loss or situation your policy specifically does not cover.

The insurer's right to recover what it paid you by pursuing the party that actually caused the loss.

When damaged property costs more to repair than it's worth, so the insurer pays its value instead of fixing it.

The loss in an item's value from age and wear, subtracted when a claim is paid on an actual-cash-value basis.

A temporary proof of coverage that's in force until the full policy is issued.

The principle of restoring you to the financial position you were in before a loss — no better, no worse.

An insurer's unreasonable failure to honor its obligations, such as denying a valid claim without proper grounds.