Skip to main content

Homeowners Insurance Glossary

Illustration of a Homeowners Insurance Glossary



An unexpected and unforeseen destructive event.

Actual Cash Value (ACV)

The value of your property at the time of loss or damage. This can be arrived at by subtracting depreciation from the replacement cost.


The growth in value of your property over time.


Your temporary proof of insurance until your policy is official.

Blanket Insurance

A policy that covers more than one person, property, vehicle, etc.

Casualty Insurance

The liability end of the policy to cover injuries to others or to other people’s property by you or other residents of your home.


Your personal property.


A partnership between you and your insurance company to share the risk.


Besides age, the building materials used in your home may affect your premium. Homes built with brick rather than wood will insure cheaper, simply because wood homes are more susceptible to fire. Roofing materials are also considered, since some are known to last longer.

Conditional Receipt

A specific condition must be met in order for your policy to be in effect.


The opposite of appreciation, this means the property has lost value.

Dwelling Policy

An insurance policy that operates like a homeowners insurance policy to cover personal property and structural damage to a home, but does not provide liability coverage.

Effective Age

An appraiser will determine the effective age of a building based on its condition. This may be a longer or shorter time than the actual age.


Listing specific situations and conditions that will not be covered by your policy.

First Party Loss

Something that involves only the insured and the insurer.

Flood Insurance

Sometimes required by lenders in areas declared federally-designated flood areas, this protects you specifically against flooding.

Grace Period

A window of time between when the premium is due and when it is paid that keeps insurance in force.

Group Policy

A homeowners insurance policy that is sold through a special group insurance trust or employment-based group wherein members are included in a master policy. The individuals involved receive certificates of coverage from the master group insurance plan.

Home Inventory

A record of personal possessions for homeowners insurance purposes to ensure that policyholders purchased enough coverage and to swiftly process claims. This can include receipts, photographs, or video recordings of the belongings.

Homeowners Insurance/Policy

A form of property insurance that protects an individual’s home from damages to a house itself or to possessions within the home.

Inflation Protection

A benefit that automatically adjusts your homeowners insurance limits to account for increases in costs to rebuild or repair a property.

Jewelry Floater

A homeowner’s insurance policy add-on to protect valuable jewelry.


A policy may be cancelled if there is a lapse in premium payment.

Legal Description

Legal description of the property being insured that enables the property to be found using records.


Insurers take into account many factors attributed to a home’s location. For example, how close are emergency services and fire hydrants in the event of a fire? Is the home located in an area known for natural disasters? Is crime high in your neighborhood? All of these factors – and more – will go into your insurance premium.


The amount sought through a claim.

Loss History

Your history of claim filing with your current insurer and past insurers. This is a factor insurance companies may use when deciding whether or not to offer you insurance and how much it will cost.

Loss of Use Coverage

Pays for typical living expenses when your property is uninhabitable. Expenses may include temporary housing, restaurant bills and more.

Market Value

The current value of your home/property, including the price of your land.

Material Misrepresentation

Your insurer may cancel your policy or refuse to pay a claim if it is found that you have misrepresented anything that has to do with your coverage.

Net Cash Value

The cash amount the policy holder receives after a claim and after all loans and dividends have been paid.


Your insurance company may decide not to renew your policy.

Ordinance or Law Exclusion

Some homeowners insurance policies may exclude costs of repair or replacement of damaged property that requires upgraded materials according to current building codes. Standard homeowner policies might only cover the cost of repair/replacement according to the cost of the original grade materials, requiring the insured to pay the difference unless they have purchased additional coverage.

Other Structure Coverage

Protects outbuildings on your property, such as detached garages and sheds.

Package Policy

An insurance policy that contains multiple coverages that are available separately. Homeowners insurance is considered a package policy in most cases since standard plans include property, liability, and theft coverages.


A specified risk that your policy covers, such as fire, wind, lightening, etc.

Public Adjuster

An advocate for the policy holder during the claims process.

Rated Policy

A policy for someone who is considered high-risk.

Real Property

Land and the items attached to it such as buildings, gardens, and wild vegetation.

Replacement Cost

How much it will cost to replace property at current market prices.


Amendment to the policy to either add or delete specific coverage.

Scheduled Items

Valuables covered by a rider or additional purchased coverage on a standard homeowners insurance policy.


A specified amount that is less than the maximum limits on a homeowners insurance policy that applies to certain types of property or coverages, usually named on your policy.


Insurance company right to recover loss payment from the responsible party.

Third Party Loss

Someone making a claim against the insured.


The person who reviews and evaluates an application for homeowners insurance.