Insurance Terms


A written contract that outlines which damages are covered for the insured individual.

Homeowners Insurance

A policy that protects you financially if your home or belongings are damaged in a covered catastrophe or if someone is injured on your property.

Primary Home

The home you live in, as opposed to one you’re renting out to someone else or leaving vacant. If you live in more than one house, your primary home is usually the one you spend the most time at and have listed as your address on your driver’s license, tax returns, etc.

Secondary Residence

A home where you don’t spend most of your time. This is usually a vacation property that you don’t rent out or a home in a city you visit for business, meaning it will sit vacant more than your primary home does.

Condo Insurance

A homeowner’s insurance policy meant specifically to provide coverage for your condo and the personal property inside it in case it’s damaged or lost. Like traditional homeowner’s insurance, condo insurance also offers personal liability for you if someone is injured or suffers property damage while at your condo.

Renter's Insurance

An insurance policy that’s sold to people who rent, rather than own, a home. It covers their personal belongings and liability, but not the structure itself.

Mobile Home Insurance

An insurance policy for mobile homes. It usually includes coverage for the dwelling, personal property, and personal liability.

Landlord Insurance

A homeowner’s insurance policy that protects property owners who rent out their homes. It usually covers repairs and replacement for the dwelling and any permanent structures on the property, as well as personal liability in case the tenant is injured at the house. It can also protect your personal property if you leave appliances or furniture for tenants to use and they end up damaged. Additionally, if you lose rental income while the house is being repaired or rebuilt, landlord insurance can make up some or all of it.

Umbrella Policy

Additional liability coverage with limits above your primary insurance policy. This way, if a loss costs more to fix than your primary coverage, your umbrella policy will kick in with extra coverage that you won’t have to pay out of pocket.

Personal Liability

The responsibility you have to pay for any damages that result from your negligence, including injuries to another person or damages to personal property.

Actual Cash Value

Also called ACV, this is an estimation of your property’s fair market value prior to the loss. Basically, this is the amount it will cost to rebuild your house minus any depreciation that’s caused your home to lose some of its value over time.


A request you make to your insurance company to compensate you after a covered loss. When you contact your insurance company to report that a fire, natural disaster, vandalism, etc. has damaged your house, you’re making a claim on your insurance policy.


An attachment to an insurance policy that adds coverage.


An insurance policy that covers personal belongings that you might move from one location to another. In most cases, floaters are purchased to cover jewelry, electronics, furs, and other valuable items that you might lose or damage when you’re outside your home, such as when you’re traveling.

Replacement Value

The amount it will cost to replace or repair a property or personal belongings at today’s prices, without taking depreciation into account.

Act of God

A disastrous incident that occurs due to natural causes and is therefore outside of your control. Common examples include storms, tornadoes, and lightning strikes that result in fires. Basically, anything you couldn’t foresee or prevent is an act of God and will usually be covered by homeowner’s insurance.


Conditions or situations that are not covered by your homeowner’s insurance policy. These should be listed in your policy so you know ahead of time what’s not covered, giving you a chance to buy separate coverage for them when possible. Some examples of common exclusions include flooding and earthquakes, and you typically need to buy separate policies for these perils.

Valued Policy

An insurance policy in which the insurer has to pay the full amount listed in the contract, rather than paying the actual cash value after a loss.

Declarations Page

The section of your policy that lists important information, starting with your name and address. It should also state the policy period, the amount of coverage you have, and the premium amount. Finally, this page should specify the property that’s insured, along with a description and location.

Additional Living Expense

Coverage that applies when you have to move out of your house temporarily as it’s being repaired or rebuilt after a covered loss. Examples of living expenses that you may be reimbursed for include hotel rooms, meals, and laundry costs. This is also often called loss of use coverage.


An estimate of the value of your property to determine the amount that insurance will need to cover for repair or replacement.

Wind/Hurricane Deductible

The amount you will have to pay before insurance will cover the damage done to your property by a hurricane or extreme winds. It differs from a standard deductible because it’s a percentage of your home’s value, rather than a flat amount. The average wind/hurricane deductible is 1% to 5% of the home’s value, though it could be more in areas that are prone to this type of natural disaster.


The amount you have to pay before your insurer will cover a loss. The standard deductible is usually $500 or $1,000, though you can choose a higher deductible to lower your insurance premium on your homeowner’s policy.

Personal Property

All your belongings in your home are called personal property. This means furniture, appliances, clothing, electronics, jewelry, and other items you own fall under the personal property coverage part of your policy. But there’s a limit to how much is covered, so if you have extremely valuable items — like jewelry or artwork — you should add coverage just for them.

Assessed Value

The estimated value of your property for purposes of property tax.


Changes you’ve made to the property that may increase its value. New fixtures, additional bedrooms, and major repairs can all improve the property enough that the value changes.

Blanket Coverage

An insurance policy that offers coverage for more than one person or piece of property, with just one limit for everything. For example, instead of having a policy that covers $110,000 for one property and $90,000 for another, you can get blanket coverage with a limit of $200,000 for both properties.

Flood Insurance

A homeowner’s policy that covers damage to the property due to flooding. If your house is in a designated flood zone, you’ll be required to get flood insurance.

Limit of Liability

The max amount of damages to your home that your insurance company is required to pay after a loss.

Standard Coverage Policy

A title insurance policy that has different standards and forms than ALTA.