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Insurance Glossary

Understanding insurance doesn't have to be complicated. Our glossary explains over 60 insurance terms in plain English, from deductibles to declarations pages.

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16

Auto Insurance

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12

Home Insurance

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11

Life Insurance

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21

General Terms

A B C D E F G H L M N O P R S T U W

Browse by Category

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Auto Insurance

16 terms

Liability Coverage Bodily Injury Liability Property Damage Liability

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Home Insurance

12 terms

Dwelling Coverage Personal Property Coverage Other Structures Coverage

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Life Insurance

11 terms

Term Life Insurance Whole Life Insurance Universal Life Insurance

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General Terms

21 terms

Premium Deductible Policy

All Terms A-Z

A

Actuary

A professional who analyzes financial risk using statistics.

Actual Cash Value (ACV)

Your car's current market value, accounting for depreciation.

At-Fault

Being responsible for causing an accident.

Appraisal

A professional assessment of property value.

B

Binder

Temporary proof of insurance before your policy is issued.

Bodily Injury Liability

Coverage for injuries you cause to others in an accident.

Beneficiary

The person who receives the insurance payout.

C

Claim

A request for payment under your insurance policy.

Coverage

The protection provided by your insurance policy.

Claims Adjuster

A professional who investigates and settles insurance claims.

Collision Coverage

Insurance that pays to repair your car after an accident.

Comprehensive Coverage

Insurance for non-collision damage like theft or weather.

Cash Value

The savings component of permanent life insurance.

Convertible Term Life

Term life that can be converted to permanent coverage.

D

Deductible

The amount you pay out-of-pocket before insurance kicks in.

Declarations Page

The summary page of your insurance policy.

Dwelling Coverage

Insurance that covers the structure of your home.

Death Benefit

The amount paid to beneficiaries when the insured dies.

Depreciation

The decrease in value of property over time.

E

Exclusion

Something your insurance policy specifically does not cover.

Endorsement (Rider)

An add-on that modifies your insurance policy.

F

Flood Insurance

Separate coverage for flood damage (not in standard policies).

Face Value (Face Amount)

The stated amount of coverage on a life insurance policy.

G

GAP Insurance

Covers the difference between your car's value and loan balance.

Guaranteed Renewable

A policy that can't be cancelled regardless of health changes.

Grace Period

Extra time to pay your premium after the due date.

H

Homeowners Liability

Covers injuries to others that occur on your property.

L

Limit (Policy Limit)

The maximum amount an insurer will pay for a covered loss.

Liability Coverage

Insurance that pays for damage or injuries you cause to others.

Loss of Use Coverage

Pays living expenses if you can't stay in your home.

Lapse

When your coverage ends due to non-payment.

M

Medical Payments Coverage (MedPay)

Basic medical expense coverage for you and passengers.

Medical Payments to Others

Covers minor injuries to guests regardless of fault.

N

No-Fault Insurance

A system where your own insurer pays your claims regardless of fault.

Named Perils

Specific events listed in your policy that are covered.

O

Other Structures Coverage

Coverage for structures not attached to your home.

Open Perils (All-Risk)

Coverage for any loss except those specifically excluded.

Out-of-Pocket

Expenses you pay yourself that aren't reimbursed.

P

Premium

The amount you pay for your insurance policy.

Policy

The contract between you and your insurance company.

Property Damage Liability

Coverage for damage you cause to others' property.

Personal Injury Protection (PIP)

Coverage for your own medical expenses after an accident.

Personal Property Coverage

Coverage for your belongings inside your home.

R

Replacement Cost

The cost to replace property with new items of like quality.

Reinstatement

Restoring a lapsed insurance policy.

Rider

An addition that modifies your insurance policy.

S

SR-22

A certificate proving you have required insurance coverage.

Scheduled Personal Property

Special coverage for high-value items listed by name.

Subrogation

Your insurer's right to recover costs from the at-fault party.

T

Total Loss (Totaled)

When repair costs exceed your car's value.

Telematics

Technology that monitors your driving for insurance discounts.

Term Life Insurance

Coverage for a specific period with no cash value.

U

Underwriting

The process insurers use to evaluate risk and set prices.

Uninsured Motorist Coverage

Protection if you're hit by an uninsured driver.

Underinsured Motorist Coverage

Protection if the at-fault driver's limits aren't enough.

Umbrella Insurance

Extra liability coverage beyond your other policies.

Universal Life Insurance

Flexible permanent coverage with adjustable premiums.

W

Whole Life Insurance

Permanent coverage with guaranteed cash value.

Waiting Period (Elimination Period)

Time before certain benefits become available.

Waiver of Premium

A rider that waives premiums if you become disabled.

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