Online Homeowners Insurance Quotes/Rates Glossary

Understand homeowners insurance quotes policy terms and conditions by reading the following terms below.


There are a lot of provisions you should consider for your homeowners' insurance policy.
Do you know what these terms and conditions are and what they mean to you?

On your policy, it states that you're not covered for any "Acts of God". What exactly does this mean? Is Flood Insurance included in this? No? Then what would you need to be covered for floods? Read below and find out!

The below terms will give you a good understanding of your homeowners insurance needs or explain in more detail the insurance you already have.

Terms and conditions:

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	Act of God An accident or event that is the result of natural causes such as floods, earthquakes, tornadoes or lightning.
	Actual Cash Value An amount equal to the cost of lost or damaged property less depreciation.
	Additional Living Expense Living expenses when damage to or loss of one's home forces the insured to maintain temporary residence elsewhere. Examples of such expenses include hotel accommodations, restaurant meals and cost of using a Laundromat while home is unusable.
	Applicant An individual who fills out and signs a written application for insurance.
	Appraisal A survey by a Claims Representative or Claims Appraiser estimating the amount of damage to property and the cost to repair it.
	Arbitration Clause
	A provision in an insurance policy which provides a procedure for resolving disputes between the insured and the insurer, typically about claim settlements.
	Authorized Service The technician assigned by a home protection plan to perform repair or replacement services on covered equipment if it breaks down.

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	Breakdown The failure of equipment covered in a home protection plan to perform the function it was designed for under normal circumstances.
	Building Code Upgrade Coverage to bring the house up to local building code following a covered claim.
	Business Personal Property The furniture, fixtures, equipment, machinery, merchandise, materials and all other personal property owned by the insured and used in the insurer's business.

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	Cancellation Termination of an insurance contract before its expiration date by either the insurance company or the policyholder.
	Catastrophe An unexpected, severe disaster that causes a significant loss.
	Civil Commotion An uprising of a large number of people, often resulting in damage to property.
	Claim A demand for payment under an insurance contract for the estimated or actual amount of loss.
	Conditions Provisions that set forth the rights, duties and responsibilities of the parties to an insurance contract. Conditions may be found anywhere in the contract.
	Condo Association Coverage A form of property insurance designed to cover the joint insurance needs of members of a condo association who collectively own property.

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	Damages A sum of money that one party is legally obligated pay to another party as compensation for injury or other loss.
	Declarations The section of an insurance policy that provides detailed information such as the name and address of the insured, the property insured, its location and description, the policy period, the amount of insurance coverage and applicable premiums. This information is also referred to as a Declaration Page.
	Deductible An amount that the policyholder has agreed to pay on each claim.
	Depreciation A decrease in the value of property over time.
	Direct Loss A loss which is a direct consequence of a particular peril. In the case of a fire, fire damage to a refrigerator would be a direct loss. Spoiling of food in the refrigerator as a result of the fire damage would be an indirect loss.
	Dwelling Coverage A section of a homeowners insurance policy that covers a house and attached structures against fire, theft, wind and other perils.

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	Earth Movement A peril including landslide, mud flow, earth sinking, rising or shifting, and earthquake. Usually excluded on homeowners and commercial property policies.
	Earthquake Insurance Insurance that covers damage caused by an earthquake as defined in the contract.
	Effective Date The date the insurance policy's coverage begin.
	Endorsement An amendment to a policy written to cover unique items or special circumstances. An endorsement is also a change to a policy that is made during the policy's term and attached to the policy to modify the terms of the insurance contract.
	Exclusion Part of an insurance policy that rules out coverage of certain risks, persons, property or locations.
	Expiration Date (or Expire Date) The ending date of an insurance policy.

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	Flood A general and temporary condition of partial or complete inundation of normally dry land areas from: overflow of inland or tidal waters, the unusual accumulation and runoff of surface waters from any source, or abnormal, flood-related erosion and undermining of shorelines. Flood also means inundation from mud flows caused by accumulations of water on or under the ground.
	Flood Insurance Purchased separately from your homeowners policy through a federal government Flood Insurance plan, this is coverage against damage caused by the defined peril of overflowing or rising bodies of water.
	Frame A type of construction. A frame building is primarily made with wood frames and joists.

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	Hazard Situation or condition that increases the possibility or extent of a loss.
	Homeowners Insurance Policy A Property and Liability Insurance contract that provides insurance against the covered perils to which a homeowner is exposed.

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	In Kind An expression relating to the insurer's right to replace damaged objects with new or equivalent (in kind) material, rather than pay a cash benefit.
	Increased Cost of Construction Insurance Insurance that covers the additional cost of reconstructing a damaged or destroyed building where ordinances require rebuilding with more expensive materials, services or techniques than originally used.
	Increased Hazard Property insurance policies provide that coverage shall be suspended when the hazard in a risk is increased beyond that contemplated when the insurance was written. For example, if a dwelling owner begins manufacturing dynamite in his home, the risk is extremely increased, and coverage could be denied by the insurer if there were a loss.
	Indirect Loss (or Damage) Loss resulting from a peril but not caused directly and immediately by that peril. For example: Loss of property due to fire is a direct loss, while the loss of rental income as the result of the fire would be an indirect loss.
	Inflation Protection Provides for automatic periodic increases in the amount of insurance on buildings to keep pace with inflation and the resulting increase in building replacement costs. An endorsement usually adds this coverage to a homeowners insurance policy.
	Insurance Department A state governmental agency that has responsibility for the enforcement of the state's insurance code. It is charged with the supervision and licensing of insurance companies and agents and the general administration of the insurance laws of the state.
	Insured The person or people protected by the insurance policy. Also referred to as a policyholder.
	Insurer The company that issues a policy to a policyholder, and promises to pay specific losses and render certain services when certain events happen.

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	Liability Insurance Liability Insurance pays on behalf of the insured for certain types of injury to others.
	Limit of Liability The maximum amount that an insurer agrees to pay in the case of loss under policy contract.
	Limited Building Code Upgrade Also known as Ordinance or Law Coverage Endorsement, is an endorsement added to a policy that provides coverage for demolition costs and increased construction costs required or regulated by law or ordinance.
	Loss Depending on the context, a reduction in the value of an insurer's property caused by an insured peril; the amount sought in a claim; or the amount paid on behalf of an insured under an insurance contract.
	Loss Assessment A type of coverage that protects a condo unit owner if fees are assessed by a condo's board of directors for unexpected expenses due to uninsured losses, insurance deductibles, losses in excess of the limit of insurance and other factors.
	Loss of Use Coverage to compensate a policyholder for loss caused because the insured has lost the use of his or her covered property due to a peril.

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	Medical Coverage Medical coverage/payments differs from Personal Liability in two ways: 1) if someone is injured on your property, coverage is available to pay that person's necessary medical expenses-under the medical payments to others limit-whether or not you are responsible for the injury. Often the policy also pays for injuries occurring off your premises if you, a family member living with you, a residence employee in the course of their employment (while on the job) or a pet causes the injury. 2) Medical payments applies only to injury and not to property damage. This coverage does not apply to you or household residents except resident employees.
	Medical Payment Medical coverage/payments differs from Personal Liability in two ways: 1) if someone is injured on your property, coverage is available to pay that person's necessary medical expenses-under the medical payments to others limit-whether or not you are responsible for the injury. Often the policy also pays for injuries occurring off your premises if you, a family member living with you, a residence employee in the course of their employment (while on the job) or a pet causes the injury. 2) Medical payments applies only to injury and not to property damage. This coverage does not apply to you or household residents except resident employees.
	Mobile Home Insurance A special policy designed for mobile home owners or occupants, covering physical damage to the home and contents, and providing personal liability coverage when the home is used as a permanent residence.
	Mortgagee Clause A clause in an insurance policy that makes a claim jointly payable to the policyholder and the party that holds a mortgage on the property.
	Mortgagee The creditor to whom a mortgage is given and who lends money on the security of the value of the property.
	Mortgagor The debtor who receives money and in turn grants a mortgage on his or her property as security for a loan.

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	Named Insured The individual or organization with whom an insurance contract is made and who is specified as a Named Insured in the policy declarations. Additional individuals or organizations can also be added. For example, a homeowner and a mortgage lender may both be Named Insured.
	Named Perils Causes of loss specifically provided for in the insurance policy.
	National Flood Insurance Program (NFIP) Federal program providing flood insurance for fixed property. Under a "dual" program coverage may be written directly by the NFIP or by insurance carriers whose losses may be reimbursed by the NFIP.
	Non-Renewal A policy that the insurer does not continue after its expiration date.

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	Occupancy This refers to the type or character of use of the property in question. Occupancy types include owner-occupied and tenant-occupied.
	Occurrence An accident or loss that results in bodily injury or property damage.
	Off Premises A clause in a Property Insurance contract extending coverage to losses that occur when an insured is away from home. An example would be the theft of property from your vehicle. The amount of coverage for these types of losses is often limited to a small percentage of the total coverage.
	Other Structures Structures, such as a garage or storage shed, which are separated from an insured dwelling by a clear space, or are connected only by a fence or utility line. Homeowners policies usually provide coverage for other structures.

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	Partial Loss A loss that does not completely destroy the insured property.
	Peril The cause of a possible accident, loss or claim.
	Personal Liability This protection pays for damage or injury you accidentally cause to others for which you are legally responsible for paying.
	Personal Property Any property of an insured other than real property. Homeowner policies can also protect the personal belongings of family members.
	Physical Damage A term used in indicating actual damage to property.
	Policy A formal written contract of insurance.
	Policyholder The party to whom a policy is issued who agrees to pay a premium to an insurer in exchange for the insurer's promise to provide insurance protection.
	Policy Anniversary Date on which an insurance policy must be renewed to keep coverage.
	Premises The building insured or containing the insured property.
	Premium The payment, or regular periodic payments, that a policyholder makes on an insurance policy to keep coverage.
	Property Damage Means physical injury to, destruction of, or loss of use of tangible property.
	Property Insurance Insurance of real and personal property against physical loss, damage or the loss of its income producing abilities.
	Protection Coverage offered by an insurance contract.

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	Rate The cost of insurance per unit of coverage. It is used as a base to determine the premium(s).
	Real Property The ground and all attached land and buildings, also known as real estate.
	Recall Period A period of time during which one can call a service provider under a home protection plan and report that the repair failed.
	Recording Agent The insurance agent that is considered by the carrier to have sold the policy.
	Reinstatement Returning a lapsed policy to its full value after its termination as if it was never terminated.
	Renewal An insurance policy issued to replace one that has expired.
	Replacement Coverage Coverage for replacing property with new material or items. Depreciation is not taken into consideration.
	Residence Premises The principal residence of the insured, including the main dwelling, other structures, grounds or part of any other building where the named insured lives.

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	Schedule A list of individual items covered under one policy such as various buildings and contents.
	Scheduled Property Listing specific personal property for a stated insured value. This is usually considered for valuable items, such as jewelry, that would otherwise be subject to limited coverage.
	Smoke Damage Damage caused by the smoke from a fire.
	Stated Amount An agreed upon amount of insurance which is shown on the policy, and which will be paid in the event of total loss regardless of the actual value of the property.

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Total Loss Loss of the total value of property insured, or a loss entailing the payment of the full face amount of an insurance contract.

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	Underwriting A process that evaluates an applicant and their property to determine whether the applicant will be rejected or accepted for coverage and whether at standard or modified rates.
	Unoccupied Refers to property which may be furnished or have furnishings in it, but is not lived in at time of claim.
	Unscheduled Jewelry Limited coverage for all your household jewelry including watches, necklaces, pins, rings, etc., and other personal items.
	Unscheduled Personal Property Provides coverage for personal property owned or used by an insured while it is anywhere in the world. Excluded classes: Animals, birds or fish, motorized vehicles , property of boarders, property in an apartment that is rented to others off the residence property, and credit cards.

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Vacant A term used in Property Insurance to describe a building that has nothing in it.

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	Wave Damage Insurance Coverage for damage to property resulting from high water tides.
	Wind Coverage for windstorm, hail, tornadoes and hurricanes.

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