General
Actual Cash Value (ACV)
What is actual cash value in homeowners insurance?Actual cash value (ACV) is how an insurer calculates what a damaged or dest…
Glossary
Insurance terms, in plain language.
This is the one place on the site where insurance vocabulary is allowed to show up by name.
Last reviewed: June 2026. Updated regularly as new terms are added.
A
General
Additional Insured
An additional insured is a person or entity added to an insurance policy by endorsement, gaining limited coverage rights that…
General
Adjuster
An adjuster is the professional who investigates an insurance claim and determines how much the carrier owes you. When you fi…
General
Admitted Carrier
An admitted carrier is an insurance company formally licensed by the state insurance department to sell coverage in that stat…
General
Aggregate Limit
An aggregate limit is the total maximum amount a policy will pay across all claims during the policy period, typically one ye…
B
General
Binder
A binder is a temporary contract of insurance, issued by the carrier or by a producer on the carrier's behalf, that provides…
Auto
Bodily Injury Liability
What is bodily injury liability coverage?Bodily injury liability coverage pays for injuries you cause to other people in an a…
Business
Business Owners Policy (BOP)
A business owners policy bundles commercial property coverage, commercial general liability coverage, and usually business in…
C
General
Cancellation
A cancellation ends an insurance policy before its scheduled expiration date. Either party can initiate it: you can cancel at…
General
Captive Agent
What is a captive insurance agent?A captive agent is a licensed insurance professional who works exclusively for one insuranc…
General
Carrier
What is an insurance carrier?A carrier is the insurance company that underwrites a policy, collects the premium, and pays cla…
General
Catastrophe (Cat)
In insurance, a catastrophe is a single weather or disaster event that causes widespread insured damage above an industry thr…
General
Claim
A claim is the formal process of notifying an insurance company of a loss and requesting payment under the terms of a policy.…
General
Claims-Made vs. Occurrence
What is the difference between claims-made and occurrence insurance policies?These two terms describe the trigger that determ…
Commercial
Co-Insurance
Co-insurance is a policy provision that requires you to insure a property to a minimum percentage of its actual value, typica…
Auto
Collision (Auto)
What does collision coverage pay for?Collision coverage pays for damage to your own vehicle caused by a crash, meaning your c…
Auto
Combined Single Limit (CSL)
What is a combined single limit in auto insurance?A combined single limit (CSL) is a single dollar amount of liability covera…
Auto
Comprehensive (Auto)
What does comprehensive coverage pay for?Comprehensive coverage pays for damage to your vehicle from causes that are not a co…
Home
Coverage A Through F (Homeowners)
Homeowners insurance policies divide coverage into six lettered sections, Coverage A through Coverage F, each protecting a di…
Business
Cyber Liability and Breach
What is cyber liability coverage in insurance?Cyber liability coverage protects businesses from the financial consequences of…
D
General
Declarations Page (Dec Page)
The declarations page, commonly called the dec page, is the summary document at the front of every insurance policy that list…
General
Deductible
What is a deductible in insurance?A deductible is the amount you pay out of pocket on a covered claim before the insurance co…
General
Depreciation
What is depreciation in insurance?Depreciation is the decline in value of an item over time due to age, wear, and obsolescenc…
Auto
Diminished Value
What is diminished value in auto insurance?Diminished value is the measurable drop in a vehicle's resale or trade-in price th…
Home
Dwelling Coverage
Dwelling coverage, labeled Coverage A on a homeowners policy, pays for physical damage to the structure of your home: walls,…
Home
Dwelling Form Codes
Dwelling form codes are industry designations for policies used to insure non-owner-occupied residential properties: rental h…
E
General
Effective Date
The effective date is the precise moment that insurance coverage begins under a policy, stated on the declarations page and o…
Flood
Elevation Certificate
What is an elevation certificate for flood insurance?An elevation certificate is a document prepared by a licensed land surve…
General
Endorsement (or Rider)
An endorsement is a written modification added to an insurance policy that changes, adds, or removes coverage from the base c…
Home
Equipment Breakdown
What is equipment breakdown coverage on a homeowners policy?Equipment breakdown is an endorsement on a homeowners policy that…
Business
Errors and Omissions (E&O)
Errors and omissions coverage, commonly called E&O or professional liability insurance, protects service businesses and p…
General
Excess Liability
Excess liability coverage sits above your primary insurance policies and pays only after those underlying limits are exhauste…
General
Exclusion
An exclusion is a specific provision in your insurance policy that removes coverage for a defined cause of loss, person, prop…
F
Flood
Flood Zone
What Is a Flood Zone? FEMA Designations and What They Mean for Insurance A flood zone is a geographic area FEMA assigns to ev…
G
Auto
Gap Coverage
Gap coverage, formally called Guaranteed Asset Protection, pays the difference between your vehicle's actual cash value at th…
Home
Guaranteed and Extended Replacement Cost
What is guaranteed extended replacement cost?Guaranteed replacement cost and extended replacement cost are endorsements added…
H
Commercial
Hired and Non-Owned Auto
What is hired and non-owned auto coverage?Hired and non-owned auto coverage is an extension of commercial auto insurance that…
Home
Homeowners Form Codes
Homeowners form codes are standardized designations, HO-1 through HO-8, that describe how broadly a homeowners insurance poli…
I
General
Independent Agent
An independent agent is a licensed insurance professional who represents multiple carriers and can shop your coverage across…
General
Insurable Interest
What is insurable interest?Insurable interest is the legal principle that you can only buy insurance on something in which yo…
L
General
Lapse
A lapse is a period during which you have no active insurance policy in force. It begins when a policy cancels, expires witho…
General
Liability Coverage
What is liability coverage in an insurance policy?Liability coverage pays for injuries or property damage you cause to other…
Home
Loss of Use
Loss of use coverage, labeled Coverage D on a homeowners policy, pays for the extra living expenses you incur when a covered…
Home
Loss Payee and Mortgagee
What is a loss payee or mortgagee on an insurance policy?A loss payee is a third party named on an insurance policy who has…
M
Auto
Medical Payments Coverage
What is medical payments coverage in insurance?Medical payments coverage, often called MedPay, is a no-fault coverage that pa…
N
General
Named Insured
The named insured is the individual, family, or business entity listed by name on the declarations page of an insurance polic…
Named Insured vs. Permissive User in Auto Insurance
Named Insured vs. Permissive User in Auto Insurance An auto liability policy covers two categories of people under the "insur…
General
Named Peril
A named peril policy covers only the specific causes of loss listed in the policy document. If the cause of damage is not on…
Home
Named Storm Deductible
A named storm deductible is a separate deductible on a homeowners policy that applies only when damage is caused by a hurrica…
Flood
NFIP (National Flood Insurance Program)
What is the NFIP (National Flood Insurance Program)? The National Flood Insurance Program (NFIP) is a federal program adminis…
General
Non-Admitted Carrier (Surplus Lines)
What is a non-admitted carrier in insurance?A non-admitted carrier, also called a surplus lines carrier, is an insurance comp…
General
Non-Renewal
What is a non-renewal in insurance?A non-renewal is the insurance company's formal decision not to continue your policy for a…
General
Non-Standard Market
The non-standard market consists of insurance carriers that specialize in writing risks that mainstream carriers have decline…
O
General
Olive Cover
Olive Cover is the consumer-facing brand of Olive Insurance Services, LLC, an independent property and casualty agency based…
General
Open Peril (All-Risk)
What is an open peril policy?An open peril policy, sometimes called an all-risk policy, covers all causes of loss except thos…
Home
Ordinance or Law
Ordinance or law coverage is an endorsement on a homeowners policy that pays the added cost of bringing a repaired or rebuilt…
Home
Other Structures
Other structures coverage, labeled Coverage B on a homeowners policy, pays for damage to detached buildings and permanent str…
P
General
Peril
A peril is a specific cause of loss -- the event or force that directly produces damage to insured property. Whether a claim…
Auto
Personal Injury Protection (PIP)
What is personal injury protection in auto insurance?Personal injury protection, commonly called PIP, is a coverage that pays…
Home
Personal Property Coverage
What is personal property coverage on a homeowners or renters policy?Personal property coverage, labeled Coverage C on a home…