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.
General
Additional Insured
An additional insured is a person or entity added to an insurance policy by endorsement, gaining limited coverage rights that…
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Adjuster
An adjuster is the professional who investigates an insurance claim and determines how much the carrier owes you. When you fi…
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Admitted Carrier
An admitted carrier is an insurance company formally licensed by the state insurance department to sell coverage in that stat…
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Aggregate Limit
An aggregate limit is the total maximum amount a policy will pay across all claims during the policy period, typically one ye…
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Binder
A binder is a temporary contract of insurance, issued by the carrier or by a producer on the carrier's behalf, that provides…
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Cancellation
A cancellation ends an insurance policy before its scheduled expiration date. Either party can initiate it: you can cancel at…
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Captive Agent
What is a captive insurance agent?A captive agent is a licensed insurance professional who works exclusively for one insuranc…
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Carrier
What is an insurance carrier?A carrier is the insurance company that underwrites a policy, collects the premium, and pays cla…
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Catastrophe (Cat)
In insurance, a catastrophe is a single weather or disaster event that causes widespread insured damage above an industry thr…
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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…
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…
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Depreciation
What is depreciation in insurance?Depreciation is the decline in value of an item over time due to age, wear, and obsolescenc…
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Effective Date
The effective date is the precise moment that insurance coverage begins under a policy, stated on the declarations page and o…
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Endorsement (or Rider)
An endorsement is a written modification added to an insurance policy that changes, adds, or removes coverage from the base c…
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Excess Liability
Excess liability coverage sits above your primary insurance policies and pays only after those underlying limits are exhauste…
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Exclusion
An exclusion is a specific provision in your insurance policy that removes coverage for a defined cause of loss, person, prop…
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Independent Agent
An independent agent is a licensed insurance professional who represents multiple carriers and can shop your coverage across…
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Insurable Interest
What is insurable interest?Insurable interest is the legal principle that you can only buy insurance on something in which yo…
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Lapse
A lapse is a period during which you have no active insurance policy in force. It begins when a policy cancels, expires witho…
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Liability Coverage
What is liability coverage in an insurance policy?Liability coverage pays for injuries or property damage you cause to other…
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Named Insured
The named insured is the individual, family, or business entity listed by name on the declarations page of an insurance polic…
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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…
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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…
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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…
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Non-Standard Market
The non-standard market consists of insurance carriers that specialize in writing risks that mainstream carriers have decline…
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Olive Cover
Olive Cover is the consumer-facing brand of Olive Insurance Services, LLC, an independent property and casualty agency based…
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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…
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Peril
A peril is a specific cause of loss -- the event or force that directly produces damage to insured property. Whether a claim…
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Policy Limit
What is a policy limit in insurance?A policy limit is the maximum dollar amount your insurance company will pay for a covered…
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Policy Period
What is a policy period in insurance?The policy period is the specific window of time during which your insurance policy is a…
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Premium
A premium is the price paid for insurance coverage: what the insurance company charges in exchange for the financial protecti…
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Pro Rata Cancellation
Pro rata cancellation is a method of calculating the refund when an insurance policy is cancelled before the end of its term.…
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Quote
What is an insurance quote?An insurance quote is a preliminary price offer from a carrier based on the information you provid…
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Reinstatement
Reinstatement is the process of putting a cancelled or lapsed insurance policy back in force, restoring the original coverage…
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Reinsurance
What is reinsurance?Reinsurance is insurance that insurance companies purchase for themselves. Just as an individual buys ins…
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Renewal
What is a policy renewal in insurance?A renewal is the automatic continuation of your insurance policy for another term, typi…
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Replacement Cost (RCV)
What is replacement cost in insurance?Replacement cost is a claims payment standard that gives you enough money to buy or reb…
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Retroactive Date and Tail Coverage
Retroactive date and tail coverage are two concepts that only arise on claims-made insurance policies, primarily professional…
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Standard Market
The standard market refers to the mainstream segment of the insurance industry -- large, well-capitalized carriers that compe…
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Sub-limit
A sub-limit is a specific dollar cap on a particular category of loss within a broader policy, setting a lower ceiling on cla…
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Subrogation
What does subrogation mean in insurance?Subrogation is the legal right that allows your insurance company to step into your s…
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Total Loss
What does total loss mean in insurance?A total loss is the point at which an insurer determines it is not economically feasib…
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Umbrella Insurance
What is umbrella insurance?Umbrella insurance is personal excess liability coverage that extends above your auto and homeowne…
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Underwriting
Underwriting is the process an insurance company uses to evaluate a risk, decide whether to offer coverage, and set the price…