Homeowners insurance glossary

Any area that has a 1% chance of experiencing a base flood in any given year; also called base floodplains

What it costs to repair or replace property minus depreciation, deterioration, or obsolescence

A person or organization added to an insurance policy to receive some of the policy's protections

A person who investigates claims for an insurance provider

An insurance company that is licensed in the state to write and sell certain types of insurance.

Coverage for damage or injury your pets may cause

The yearly interest charged for a loan that includes the interest rate plus any costs rolled into the loan, such as closing costs or origination fees

A professional assessment of a property’s value; your home, belongings, and property losses can be appraised

An agreement that gives your claims benefits to someone else.

Large lump-sum payment made at the end of a loan that allow borrowers to pay lower installments throughout the loan’s term

The height floodwaters are expected to reach during a 100-year flood

A temporary or interim insurance policy that an agent or insurance company issues before they issue the actual policy

Bodily injury is harm caused to a person’s physical condition, including pain and illness; usually covered by the personal liability coverage in a homeowner policy

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

Coverage for when a home is condemn after layers under the ground’s surface abruptly collapse and cause a visible depression in the ground, making the home uninhabitable

A request made to an insurance company asking for payment on a loss under a policy

Additional fees you pay above a home's sale price

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

The day an insurance company creates a policy

A summary of your insurance policy that lists key information about your coverage

The amount of money that you’re responsible for covering in certain insurance claims; “AOP” stands for all other perils and applies to claims involving events like fire and theft

The amount of value that an item loses over time as it ages or experiences normal wear and tear

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

A type of home insurance that protects rental or vacant homes from nine named perils, typically covering the property for its actual cash value rather than its replacement cost

A type of property insurance that covers rental properties for 18 different types of damage; usually provided on a replacement-cost basis

A type of dwelling property insurance policy designed for homes used as investment properties or homes with older roofs, typically offering many of the same coverages found in a standard homeowners insurance policy while also being highly customizable to fit unique needs

The primary structure on a property, plus any attached structures, that is typically listed on your home insurance by its address

The date when an insurance contract is in force and effective

An amendment to your insurance policy that updates its information, increases coverage or limits, or reduces or excludes coverage

A specialty market where people who have been denied coverage can usually find policies

Anything that isn’t covered in an insurance policy to narrow a policy’s coverage, such as perils, situations, hazards, or properties

A state-run program designed to ensure every homeowner can get insurance and that is usually the last option for homeowners who can’t get coverage

Coverage typically found in a landlord insurance policy. It can that helps cover lost rental income if the property is uninhabitable because of a covered claim

Areas in California that appear on fire zone maps and where physical conditions create moderate, high, and very high degrees of wildfire risk

Coverage for your losses if an accidental fire damages your property; home insurance policies almost always includes this coverage

The first step in the claims process where the policyholder reports a loss to their insurance company

A low-lying area near a lake, pond, or other large body of water that has a 26% chance of flooding during a 30-year mortgage

An area designated as a high-risk flood zone because of its proximity to floodplains, rivers, lakes, and other bodies of water.

Areas close to water hazards that have a 1% chance of experiencing shallow flooding between one and three feet each year, usually comes in the form of ponding

A high-risk flood zone often found near rivers and streams; may see floods that are one to three feet deep.

An area with moderate risk flood zone that has approximately a 0.20% chance of a flood each year

An area with less than a 0.20% risk of an annual flood, which means it's above the 500-year flood level

A coastal area with an increased chance of flooding, especially from wind-driven waves

A coastal area with an increased chance of flooding due to storm waves and tidal surges

An area with low-to-moderate flood risk as determined by the Federal Emergency Management Agency (FEMA)

Areas the Federal Emergency Management Agency (FEMA) labels based on their likelihood for flooding.

A home insurance policy your mortgage lender buys when your coverage lapses or is cancelled

Coverage for damage caused by fungi, mold, bacteria, and wet or dry rot

An endorsement that may cover costs if you cause property damage or bodily injury while using your golf cart; some also cover damage to the cart itself

The timeframe between a missed payment due date and when your insurance company cancels your policy for nonpayment

The portion of your homeowners policy that protects the actual structure of your home from common perils such as fire, hail, and lightning.

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

A home insurance policy that can cover your home and personal property against 16 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 type of home insurance that insures the home, other structures, and belongings on an open-perils basis; also called the comprehensive form

An insurance policy for condo owners that covers their unit from the walls in, including items inside the unit, their personal liability, and more

A policy that protects mobile and manufactured homes for all perils except those listed as exclusion; personal belongings are typically covered on a named-perils basis

A home insurance for older buildings where the replacement costs potentially outweigh the market value; also called the modified coverage form

Charges assessed by a community’s homeowner association to maintain common areas and to pay for amenities

A commercial insurance policy that covers the exterior of a condo and common areas; condo owners typically need their own insurance to complement this policy

A third-party, unbiased assessment of your property’s value based on other comparable properties in the neighborhood

A visual examination of a house that includes all the major components to make sure things are operational and to note if repairs are necessary

Money you borrow to purchase a habitable property, such as a house, condo, or apartment, that allows you to finance the purchase of the property by making payments over time

Contracts between homeowners and warranty companies that help cover costs if a home’s systems or appliances malfunction

This is a versatile homeowners policy that covers your home, attached structures, and belongings in a variety of situations.

A separate deductible that applies specifically to damage caused by hurricanes; often a based on a percentage of your home’s value.

An endorsement that adds coverage to your home insurance policy for a screen enclosure for your pool or patio

Insurance that covers expenses related to having your identity stolen, such as attorney and tax advisor fees, credit report fees, loss of income due to absence from work while dealing with the fraud; often purchased as an add-ons

A financial stake in the person, business, event, or property that’s being insured

An individual who acts as an intermediary between the people who want to buy insurance and the carriers that develop the policies

Insured means the person or entity that has a financial interest in the property and has the right to the proceeds during a claim

A company that provides protection from the financial repercussions of certain losses, such as theft or fire, in exchange for premiums

A jewelry appraisal is an official report documenting the value of a particular piece of jewelry or watch

The time between the cancellation, nonrenewal, or expiration of an insurance policy and when new coverage is in place

The maximum amount that an insurance company pays for a specified loss, such as damage to your home or accusations that you caused someone else harm

The amount someone would pay for a home on the open market; typically confirmed by an appraisal when someone wants to buy it

A situation that exists in contracts when one party has either entered the contract in bad faith or has an incentive to take abnormal risks

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

The person or entity that is protected by an insurance policy

A nationally run flood insurance provider managed by FEMA

Acting in a way that no reasonable person would act, disregarding prudence and safe practices

A signed letter that states you haven’t experienced any losses that could lead to claims.

The term an insurance company uses when it's decided to discontinue your policy once the current term expires

An event that causes damage or physical injury to a third party and triggers a claim on an insurance policy

Coverage that applies if you're required by ordinance or law to upgrade your home to meet current codes when rebuilding after a covered loss

A specific risk, or cause of loss, covered by an insurance policy

Documentation of your 7-year loss history that gives insurers insight into how "risky" it might be to insure your home; also called a claim history report or CLUE insurance report

A legally binding contract between you, the policyholder, and your insurance company that lays out what’s covered, what’s not covered, and what events cause your coverage to kick in

The time between an insurance policy's effective and expiration dates; also called the policy period

The person who buys an insurance policy and who has the right to change, cancel, or continue coverage and who receives the policy's benefits

The amount of money you pay for an insurance policy

A type of insurance conventional lenders require when homebuyers don't make a down payment of 20%; the coverage protects the lenders

Documentation from an insurance company or its agent that shows you have an insurance policy; may be needed to get a mortgage

A line of insurance products that cover losses stemming from your possessions or injuries and damage you cause to others

A grade given to a home based on the community's fire fighting abilities; used as a major factor in determining premium

An estimate of what your policy will cost

A section of land, anything permanently attached to the land, and the owner’s right to use the land

A way for insurance companies to transfer some of the risk they take on when they sell insurance policies, particularly in catastrophe-prone areas

The opportunity to continue your coverage for another term

The amount it would cost to replace or rebuild an item of similar quality using materials and goods that are currently available

An endorsement that increases protection for specific valuable items

Coverage for damage to your home, other structures on your property, and your personal property within these structures if they're damaged by a sinkhole on your property

The act of substituting one party for another. When subrogation occurs, the party that’s taking the place of the other also accepts the original party’s legal rights and duties.

The act of intentionally taking someone's personal property to deprive of them of its use

The way insurance companies evaluate the risk of offering coverage to applicants

Willful or malicious behavior that causes someone else’s property to be altered, defaced, or destroyed

Coverage for a condo building from the exterior framing to the walls in the condo unit that is usually purchased by a homeowners association

An endorsement that can be added to your homeowners insurance to help pay for damage caused by backed up sewers, drains, and sump pumps

The amount you’re responsible for when your home is damaged by wind, hail, tornado, wind-driven rain, or similar events

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

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