We understand that some terms mentioned in your homeowners policy can be confusing, we created this page for our customers to help you understand every detail about your home insurance coverage. Your policy helps protect your home and family if and when something may happen to your home due to wind, fire, water damage, flooding, lightning and so many other factors. Please review our homeowners insurance glossary below. We look forward to helping you!

A.M. Best
An independent organization that rates the financial strength and stability of insurance companies. The ratings help consumers understand how likely an insurer is to meet its claims obligations.
Example: If an insurance company has an A.M. Best rating of "A+", it indicates that the company is financially stable and reliable.

Accident
An unforeseen, unexpected event that causes damage or injury.
Example: If a tree unexpectedly falls on your house during a storm, that would be considered an accident under your homeowners insurance.

Actual Cash Value (ACV)
The value of your property at the time of loss or damage, calculated as the replacement cost minus depreciation.
Example: If your five-year-old TV is destroyed in a fire, ACV would be the cost to replace it minus the five years of wear and tear.

Adjusted Basis
The original cost of a property, adjusted for improvements or depreciation.
Example: If you bought a home for $200,000 and later added $50,000 worth of renovations, your adjusted basis would be $250,000, minus any depreciation.

Adjuster
A professional who evaluates insurance claims on behalf of the insurer and determines the amount to be paid.
Example: After a pipe bursts in your home, an adjuster would come to assess the water damage and estimate the cost of repairs.

Agent
A licensed individual who sells and services insurance policies.
Example: You may work with an agent to find the right homeowners insurance policy for your needs.

Appreciation
An increase in the value of property over time due to economic factors like inflation.
Example: If your home’s value rises from $200,000 to $250,000 over several years, that $50,000 increase is appreciation.

Assessed Value
The value assigned to a property by a local government for taxation purposes.
Example: Your property might be assessed at $150,000 by the county, which would be used to calculate your property taxes.

Betterment
An improvement that increases the value of a property.
Example: Adding a new roof to your house is a betterment because it increases the overall value of your home.

Binder
A temporary document that provides proof of insurance until the official policy is issued.
Example: When you purchase a new home, your lender may require a binder to prove that you have insurance before finalizing the mortgage.

Blanket Insurance Policy
A single policy that provides coverage for multiple properties or people.
Example: A landlord with multiple rental properties might have a blanket insurance policy covering all the buildings.

Breach
The failure to meet the terms of an agreement or contract.
Example: If you stop paying your insurance premiums, it could be considered a breach of your insurance contract.

Cancellation
The termination of an insurance policy before its expiration date, either by the insurer or the insured.
Example: If you switch to a different insurance company, you may cancel your current policy before it renews.

Cash Value
The amount of money you would receive if you cancel your insurance policy before its term ends.
Example: If you cancel a whole life insurance policy, you might receive a portion of the premiums you’ve paid as the cash value.

Casualty Insurance
Insurance that covers legal liability for injuries to others or damage to their property.
Example: If someone slips on your sidewalk and sues you, your casualty insurance may cover the legal costs and settlement.

Chattel
Personal, movable property.
Example: Your furniture, electronics, and clothing are considered chattel under your homeowners insurance policy.

Claimant
The person who files a claim with an insurance company.
Example: If you submit a claim for roof damage after a hailstorm, you are the claimant.

Coinsurance
A situation where the insured shares a portion of the risk with the insurance company.
Example: If your policy requires 80% coinsurance and your home is underinsured, you might have to pay a portion of the repair costs out of pocket.

Coinsurance Clause
A policy provision requiring the insured to maintain coverage that is a specific percentage of the property's value to receive full compensation for a loss.
Example: If your home is valued at $300,000 and your policy has an 80% coinsurance clause, you must insure it for at least $240,000 to avoid penalties.

Common Areas
Parts of a property shared by all residents in a community, such as hallways, pools, or parks.
Example: In a condo complex, the lobby and elevators are considered common areas that all residents can use.

Company Profile
A summary of an insurance company’s performance, including its financial stability, ratings, and customer complaints.
Example: Before choosing an insurance provider, you might review the company’s profile to ensure it has a good reputation.

Conditional Receipt
A receipt given when an insurance application is submitted with a premium payment, indicating coverage is effective under certain conditions.
Example: If you apply for life insurance and pay the first premium, the conditional receipt may state that coverage begins if you pass the medical exam.

Condominium
A type of housing where you own your individual unit, but share ownership of common areas with other residents.
Example: Buying a condo means you own your apartment but share the building's gym, pool, and parking garage with other residents.

Contents Coverage
Insurance that covers the personal belongings inside your home, like furniture, electronics, and clothing.
Example: If your home is burglarized, contents coverage would help pay to replace stolen items like your TV or laptop.

Contract
An agreement between the insurance company and the policyholder, usually in the form of an insurance policy.
Example: Your homeowners insurance policy is a contract that outlines what is covered and the conditions of coverage.

Declarations Page
The page in your insurance policy that outlines key details, such as the insurer’s name, coverage limits, and premium amount.
Example: The declarations page will tell you the total coverage amount for your home and personal property.

Deductible
The amount you agree to pay out of pocket on a claim before your insurance covers the rest.
Example: If you have a $1,000 deductible and file a claim for $10,000 in storm damage, your insurance will cover $9,000 after you pay the deductible.

Deposit
A payment made to secure an agreement or contract.
Example: You may need to pay a deposit when signing up for a new insurance policy to guarantee coverage.

Depreciation
The decrease in value of property over time due to wear and tear or age.
Example: A 10-year-old roof has depreciated compared to a brand-new one, so its value would be less when filing a claim.

Dividend
A refund or payment that some insurance companies distribute to policyholders from their profits.
Example: If your insurance company has a good financial year, they might send you a dividend check as a share of the profits.

Dwelling Coverage
Insurance that covers damage to the physical structure of your home.
Example: If your house is damaged in a fire, dwelling coverage would help pay for the repairs or rebuilding costs.

Earned Premium
The portion of your insurance premium that the insurer has earned by providing coverage.
Example: If you cancel your policy halfway through the year, the earned premium is the amount that covers the first six months.

Effective Age
An estimate of a building’s age based on its condition rather than its actual age.
Example: If your 30-year-old home has been well-maintained, it might have an effective age of 20 years in an appraisal.

Effective Date
The date when your insurance policy starts providing coverage.
Example: If your policy’s effective date is January 1st, you’re covered from that day forward.

Endorsement
A written change or addition to your insurance policy that modifies coverage.
Example: You might add an endorsement to your homeowners policy to cover valuable jewelry.

Exclusions
Specific situations or items not covered by your insurance policy.
Example: Flood damage is often listed as an exclusion in standard homeowners insurance policies, meaning you would need separate flood insurance for that coverage.

Experience Period
The time frame an insurer looks at when evaluating a policy or setting premiums.
Example: Your insurer might review your claims history over the past three years to decide your premium rate.

Expiration Date
The date when your insurance policy ends.
Example: If your policy expires on December 31st, you need to renew it by then to avoid a lapse in coverage.

First Party Loss
A loss involving only the insured and the insurer.
Example: If your home is damaged by fire, you file a claim directly with your insurance company, making it a first-party loss.

Flood Insurance
Insurance that specifically covers damage from flooding, often required in flood-prone areas.
Example: If you live in a designated flood zone, your mortgage lender might require you to purchase flood insurance.

Grace Period
The extra time allowed after a payment due date before your insurance policy is canceled.
Example: If your premium is due on the 1st, but you have a 15-day grace period, your coverage won’t lapse as long as you pay by the 15th.

Hazard Insurance
Insurance that covers damage to your property from hazards like fire, wind, and vandalism.
Example: If a hurricane