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…
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.
L
General
Liability Coverage
What is liability coverage in an insurance policy?Liability coverage pays for injuries or property damage you cause to other…
Loss Assessment Coverage
Loss assessment coverage is a part of a condo owner's policy (HO-6) that pays the owner's share when the association charges…
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
Master Policy (Condo/HOA)
A master policy is the insurance a condo or homeowners association carries on the building structure and common areas (roof,…
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…
Ordinance or Law Coverage
Ordinance or law coverage pays the added cost of bringing a damaged building up to current building codes when you repair or…
Home
Other Structures
Other structures coverage, labeled Coverage B on a homeowners policy, pays for damage to detached buildings and permanent str…
P
Percentage Deductible
A percentage deductible is a deductible calculated as a percent of your home's insured value instead of a flat dollar amount.…
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…
General
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…
General
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…
General
Premium
A premium is the price paid for insurance coverage: what the insurance company charges in exchange for the financial protecti…
General
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.…
Proof of Loss
Proof of loss is a signed, itemized statement you submit to your insurer after a claim, describing what was damaged or lost,…
Auto
Property Damage Liability
Property damage liability coverage pays for damage you cause to another person's property while operating a vehicle. This inc…
Q
General
Quote
What is an insurance quote?An insurance quote is a preliminary price offer from a carrier based on the information you provid…
R
General
Reinstatement
Reinstatement is the process of putting a cancelled or lapsed insurance policy back in force, restoring the original coverage…
General
Reinsurance
What is reinsurance?Reinsurance is insurance that insurance companies purchase for themselves. Just as an individual buys ins…
General
Renewal
What is a policy renewal in insurance?A renewal is the automatic continuation of your insurance policy for another term, typi…
Renters Insurance
Renters insurance (sometimes called an HO-4 policy) protects a tenant's personal belongings and covers their liability; it do…
General
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…
General
Retroactive Date and Tail Coverage
Retroactive date and tail coverage are two concepts that only arise on claims-made insurance policies, primarily professional…
Auto
Ride-Share and Livery Exclusion
What is a ride-share exclusion in auto insurance?A ride-share exclusion is a clause in a standard personal auto insurance pol…
S
Scheduled Personal Property
Scheduled personal property is coverage that lists (schedules) a specific high-value item by name, usually with its own appra…
Home
Service Line Coverage
Service line coverage is an endorsement on a homeowners policy that pays for physical damage to the underground utility lines…
Sole Proprietor (Workers' Comp)
A sole proprietor is an individual who owns an unincorporated business by themselves. For workers' compensation, sole proprie…
Special Flood Hazard Area (SFHA)
A Special Flood Hazard Area (SFHA) is FEMA's designation for land with a 1-percent or greater chance of flooding in any given…
Auto
SR-22
What is an SR-22 in Georgia auto insurance?An SR-22 is a certificate of financial responsibility filed by your auto insurance…
General
Standard Market
The standard market refers to the mainstream segment of the insurance industry -- large, well-capitalized carriers that compe…
Auto
Stated Amount
A stated amount is a coverage option where you and the insurer agree on a fixed dollar figure for a vehicle or collectible at…
Strengthen Alabama Homes
Strengthen Alabama Homes is a state grant program that pays 100% of the cost of residential wind mitigation, up to $10,000, t…
General
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…
General
Subrogation
What does subrogation mean in insurance?Subrogation is the legal right that allows your insurance company to step into your s…
Commercial
Surplus Lines Insurance
What is surplus lines insurance?Surplus lines insurance is coverage sold by carriers that are not licensed (admitted) in your…
T
Auto
Telematics
What is telematics in auto insurance?Telematics is the technology an auto insurer uses to price your policy based on how you…
General
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…
U
General
Umbrella Insurance
What is umbrella insurance?Umbrella insurance is personal excess liability coverage that extends above your auto and homeowne…
Auto
Underinsured Motorist (UIM)
What does underinsured motorist coverage mean in insurance?Underinsured motorist coverage (UIM) steps in when a driver who ca…
Underlying Policy
An underlying policy is the base auto or homeowners policy that sits beneath an umbrella (excess liability) policy. The umbre…
General
Underwriting
Underwriting is the process an insurance company uses to evaluate a risk, decide whether to offer coverage, and set the price…
Auto
Uninsured Motorist (UM)
Uninsured motorist coverage (UM) protects you when you are injured in an accident caused by a driver who has no auto insuranc…
W
What Are Rideshare Coverage Periods?
What Are Rideshare Coverage Periods? Rideshare coverage periods are a framework used by Uber, Lyft, and most state transporta…
What Is a Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW)?
What Is a Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW)? A collision damage waiver (CDW) and loss damage waiver (…
What is a DP-3 Dwelling Fire Policy?
What is a DP-3 Dwelling Fire Policy? A DP-3 dwelling fire policy (ISO DP 00 03) is the most comprehensive of three dwelling f…
What Is a Non-Owner Auto Policy?
What Is a Non-Owner Auto Policy? A non-owner auto policy is a personal auto liability policy for people who do not own a vehi…