Homeowners Insurance Glossary

The amount an item is worth based on the replacement cost with depreciation taken into account. So, if you’ve got an item that is considered to be useful for 10 years, and make a claim on the item when it’s 5 years old, the actual cash value will only be half of the replacement cost, assuming the item depreciates equally every year.

The person who investigates claims for an insurance provider, which includes assessing damaged property, interviewing witnesses, and reviewing police and hospital records.

Animal liability covers damage caused by your pets, most notably dogs. If you have a dog, it's worth understanding whether you need animal liability coverage, and whether it covers damage or injury caused by your animal off of your property.

An appraisal is a professional assessments of a property’s value. Your home, belongings, and property losses can be appraised.

An assignment of benefits (or AOB for short) is an agreement that gives your claims benefits to someone else.

A type of insurance that pays for damage caused by low-probability, high-cost events, such as floods, earthquakes, and hurricanes.

Catastrophic ground cover collapse (CGCC) is a severe form of sinkhole loss when layers under the ground’s surface abruptly collapse, cause a visible depression in the ground, and make a home uninhabitable.

A request made to an insurance company asking for payment on a loss that is covered by a policy. If a claim is approved, your deductible will be subtracted from the covered amount.

A provision in your insurance policy that requires you to carry coverage equal to 80 percent of your home’s replacement value.

This is the first page of your insurance policy that lists key information about your coverage, such as policy limits and deductibles.

The amount of money, per claim, that you are responsible for covering. Deductibles only apply to approved claims. If you have a $1,000 deductible and a claim is approved for $20,000, Your insurance company will cover $19,000 of it. Some perils (like hurricanes or wind) may have their own deductibles.

The amount of value that an item loses over time. Items that depreciate are considered to have a specific length of time that they are considered useful, and will depreciate from 100% of their value when they are new, to 0% of their value when they have reached their useful age.

A zone in Texas located east of Highway 146 along the Gulf of Mexico that faces increased wind damage risk.

A DP1 policy is a type of home insurance that protects rental or vacant homes from nine named perils. It covers the property for its actual cash value, not replacement cost.

This is a type of dwelling fire insurance for non-owner occupied, residential homes. Like other dwelling fire insurance policies, DP-3 can cover the home’s physical structure but not its contents.

This is an amendment to your insurance policy that updates its information, increases coverage or limits, or reduces or excludes coverage.

Also called fair rental income protection, this coverage is included in Coverage D of a landlord insurance policy. It can help cover lost rental income if the property is inhabitable because of a covered claim.

A Special Flood Hazard Area (SFHA) close to lakes, ponds and other large bodies of water. Because of its low elevation and proximity to water, flood zone A is a high-risk flood zone.

An area the Federal Emergency Management Agency (FEMA) labels based on its likelihood for flooding.

If you have a mortgage and your home insurance policy lapses, watch out. Your lender may obtain a policy – called force-placed insurance – on your behalf.

Named-perils insurance that provides coverage for an owner-occupied, standalone home and its contents.

A broad form home insurance policy that can cover your home and personal property against 10 named perils.

A special form home insurance policy that covers your home and other structures on an open-perils basis and your personal property on a named-perils basis.

A renters insurance policy that protects a renter’s personal property on a named perils basis and covers their personal liability.

A comprehensive form home insurance policy that covers the home, other structures, and personal property on an open-perils basis.

A condo insurance policy that covers the unit from the walls in. It also covers the things inside the unit – appliances, fixtures, and belongings – as well as personal liability and more.

Also called mobile or manufactured home insurance, this type of home insurance protects mobile and manufactured homes for all perils except those listed as exclusions. It covers your belongings on a named-perils basis.

A modified coverage form that provides home insurance for older buildings with replacement costs that outweigh the market value.

This is a commercial insurance policy that covers the exterior of a condo and common areas. Because it doesn't cover interior units, condo owners need their own insurance to complement this policy.

Typically homeowners’ insurance providers impose a separate Hurricane Deductible to your Standard Deductible. Your Hurricane Deductible is based on a percentage of your home’s value, and is the amount you will pay out of pocket should your home be damaged as a result of a hurricane.

If you have a screened enclosure, it's likely not covered by your basic insurance policy. The good news is that additional coverage is available, and not exorbitantly expensive.

Identity fraud insurance covers expenses related to the consequences of having your identity stolen. Some examples include attorney and tax advisor fees, credit report fees, loss of income due to absence from work while dealing with the fraud, loan re-application fees, notary fees and costs for certified mail. Kin offers identity fraud add-ons to all policies. Be sure to ask your agent about it if you're interested.

An official hold on issuing new policies or changing coverage for existing policies in response to an approaching storm or ongoing wildfires or civil unrest.

A nationally run flood insurance provider managed by FEMA.

A statement of no loss is a signed letter that states you haven’t experienced any losses that could lead to claims.

Ordinance or law coverage applies if you are faced with having to rebuild your home after a covered loss and are required by ordinance or law to upgrade the rebuild to meet current codes. This includes construction, electrical, and plumbing codes, among others.

A peril is a specific risk, or cause of loss, covered by an insurance policy. Most Kin policies offer special coverage, which covers any and all perils except those that are specifically excluded.

Also called a claim history report, a personal property report documents your 7-year loss history. It gives insurers insight into how "risky" it might be to insure your home.

Put simply, a protection class is a grade given to a home based on the community's fire fighting abilities. This is used as a major factor in determining premium. If you're close to a source of water, that can help reduce premium.

The amount it would cost to replace or rebuild an item of similar quality using materials and goods that are currently available. When an item is rebuilt or replaced, you may end up with something that is better quality than what you’re replacing because the current standards for the item have improved over time.

Some types of personal property (like jewelry) have a predetermined coverage limit. You can make sure that individual items are covered by adding them to your policy as “scheduled property”. Some high-value items may require an appraisal. These scheduled items will then be covered up to the amount of the appraised price.

Sinkhole insurance provides coverage for damage to your home, other structures on your property as well as your personal property within these structures if they incur damage or loss due to a sinkhole on your property. Certain states require home insurers to offer catastrophic ground collapse coverage as part of their homeowners insurance, while others require earth movement to be made available as an optional extra.

Also called single entity coverage or studs in coverage, this covers a condo building from the exterior framing to the walls in the condo unit. It is usually purchased by a homeowners association.

The process of making your home more resistant to wind damage. This can save you a lot of money on your home insurance.

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