Homeowners Insurance Terms and Definitions

The homeowners insurance terms and definitions listed below will help you understand what you're buying when you shop for homeowners insurance, condo insurance or renters insurance.

Appraisal

An evaluation of a home insurance property claim by an authorized person to determine property value or damaged property value.

Cancellation

The termination of a home insurance policy during the policy term. An insurance company can only cancel a home insurance policy for reasons stated in the policy and permitted under the law of the state in which the policyholder resides.

Claim

A policyholder's request for reimbursement from an insurance company under a home insurance policy for a loss to property.

Deductible

The amount a home insurance policyholder must pay out of pocket for a covered claim.

Depreciation

The estimated decrease in property value over time due to wear and tear, aging and other related factors.

Endorsement

A provision or document added to a home insurance policy that changes the original coverage offered in the policy.

Exclusion

Certain property, persons or circumstances noted in a policy as not covered by a home insurance policy.

Group Policy

A home insurance policy sold through an employment-based group, association or special group insurance trust in which members are included under one master policy. Individuals receive certificates of coverage from the group policy.

Independent Agent or Producer

An insurance agent or producer who represents more than one insurer.

Individual Policy

A home insurance policy sold directly to an individual, often through direct mail or phone solicitation. Individual policies do not require people to be members of an employment-based group, association or special group insurance trust.

Inflation Protection

Automatically adjusts your home insurance policy limits to account for increases in costs to repair property.

Insurance

A contract in which a policyholder pays a set amount to an insurance company for protection against specified losses or perils.

Lapse

Occurs when a policyholder does not pay or pays less than the agreed amount for a home insurance policy premium. Often, termination of the policy results from a lapse.

Liability Coverage

Covers losses that an insured person is legally liable for due to negligence or other situations outlined in a home insurance policy.

Market Value

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

Nonrenew Insurance

An insurance company's decision not to renew a home insurance policy after the current term ends. Companies must appropriately notify policyholders prior to nonrenewing coverage.

Peril

The exposure to or cause of a possible loss, such as an injury, destroyed or lost property, etc.

Personal Property

All tangible property (other than land) that is either temporary or movable in some way, such as furniture, jewelry, electronics, etc.

Policy

A written contract for insurance between an insurer and a policyholder.

Premium

The price a home insurance company charges for a specified risk over a specified period of time.

Property Coverage Insurance

Protects personal property and land against loss or damage, as outlined in a home insurance policy.

Real or Tangible Property

Land, as well as anything permanently attached to, embedded in or growing on it.

Replacement Cost Coverage (on Dwelling)

Pays for the cost to replace damaged property or structures without factoring in deductions for depreciation, but payment is limited to a maximum dollar amount.

Replacement Cost Coverage (on Contents)

Pays for the cost to replace damaged personal property or items at current costs without factoring in deductions for depreciation.

Sub-limit

A specified amount that is less than the maximum limits on a home insurance policy. Sub-limits are noted for specified coverages or types of property.

Underwriting

The process an insurance company uses to determine if someone is eligible for insurance and, if so, how much that person should pay for insurance.

Print all terms and definitions These definitions provide a brief description of the coverages Progressive offers and some of the terms and phrases used in connection with homeowners insurance. These definitions are not applicable in all states or for all products. This is not an insurance contract. Other terms, conditions and exclusions apply. Please read your official policy for full details about coverages. These definitions do not alter or modify the terms of any insurance contract. If there is any conflict between these definitions and the provisions of the applicable insurance policy, the terms of the policy control.
Source: http://homeowners.progressive.com/home-owners-insurance-terms.aspx