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: August 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…
Alabama Insurance Underwriting Association (AIUA)
The Alabama Insurance Underwriting Association (AIUA) is Alabama's insurer of last resort for windstorm and hail coverage in…
Appraisal
Appraisal is a process built into most property insurance policies for resolving a disagreement over how much a covered loss…
B
Bad Faith
Bad faith is when an insurance company denies, delays, or underpays a claim without a reasonable basis, after it knew or shou…
Base Flood Elevation
Base flood elevation (BFE) is the height, in feet, that floodwater is expected to reach during a "base flood" (a flood with a…
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…
Building Coverage (Flood)
Building coverage is the part of a flood insurance policy that pays for flood damage to the physical structure of a home: the…
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…
Certificate of Insurance (COI)
A certificate of insurance (COI) is a standardized one-page document that proves a business currently carries insurance. It l…
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…
Coastal Wind Pool
A coastal wind pool is a state-created program that sells windstorm and hail coverage to property owners near the coast who c…
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…
Collision Coverage
Collision coverage is the part of an auto policy that pays to repair or replace your own vehicle after a crash, whether you h…
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…
Commercial Auto Insurance
Commercial auto insurance covers vehicles a business owns, leases, or uses for work. It matters because a personal auto polic…
Auto
Comprehensive (Auto)
What does comprehensive coverage pay for?Comprehensive coverage pays for damage to your vehicle from causes that are not a co…
Comprehensive Coverage
Comprehensive coverage (sometimes called "other than collision") pays for damage to your own vehicle from causes that are not…
Contents Coverage (Flood)
Contents coverage is the part of a flood insurance policy that pays for flood damage to your personal belongings: furniture,…
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
Earthquake Insurance
Earthquake insurance covers damage caused by an earthquake. It matters because standard homeowners, renters, and condo polici…
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…
Exclusive Remedy (Workers' Comp)
Exclusive remedy is the core trade-off of workers' compensation: an employee hurt on the job receives guaranteed medical and…
F
Flood Insurance
Flood insurance covers damage from rising water, storm surge, and similar flood events. No standard homeowners policy, anywhe…
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…
FORTIFIED (Home Standard)
FORTIFIED is a voluntary construction and re-roofing standard designed to help a home stand up to severe wind, rain, and hail…
FORTIFIED Roof
A FORTIFIED Roof is the entry-level designation of the FORTIFIED standard, a voluntary, beyond-code construction and re-roofi…
G
Auto
Gap Coverage
Gap coverage, formally called Guaranteed Asset Protection, pays the difference between your vehicle's actual cash value at th…
General Liability
General liability insurance protects a business against claims that it caused bodily injury or property damage to someone out…
Home
Guaranteed and Extended Replacement Cost
What is guaranteed extended replacement cost?Guaranteed replacement cost and extended replacement cost are endorsements added…
Guaranty Association
An insurance guaranty association is a state-created, industry-funded safety net that pays covered claims when a licensed (ad…
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…
Hurricane Deductible
A hurricane deductible is another name for a named storm deductible: a separate, usually higher deductible that applies only…
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…
J
Judgment (Liability)
A judgment is a court's binding order that one party owes money to another, for example after a lawsuit over injuries or prop…