Insurance Glossary

Adjuster (or, claim adjuster)
Someone who investigates damage to a property, and then determines whether the insurance policy covers the damage, if there is any potential liability, and then decides on compensation.

Amendment
This is a change to your existing homeowners insurance policy.

Binder
This is temporary insurance coverage until an official policy is written or delivered.

Catastrophe (or, catastrophic incident)
A catastrophe is a disaster that results in severe loss, injury, and property damage, usually affecting a specific geographic area. Catastrophes are such things as hurricanes, floods, and tornadoes.

Claim
A request for compensation (payment or replacement) after damage or loss for anything covered in a property insurance policy. Under liability insurance, there are two claims: one made by a third party against the policy holder, and another made by the policy holder to the insurance company for coverage against the third party.

Declaration
This is a quick summary of your policy and it contains your name, address, dollar amount of the insurance coverage, description of property being covered, and the premium cost.

Deductible
The amount the insured party pays out of pocket before the insurance coverage begins.

Depreciation
The decrease in value of any property due to time and usage.

Endorsement
This is an addition to your existing homeowners policy. For example, when you add a rider to your coverage, you make an “endorsement” to your policy.

Floater
This is additional coverage to your homeowners policy that insures prized possessions that are “moveable property” such as expensive jewelry, fine art, musical instruments, and furs.

Guaranteed replacement cost coverage
This coverage pays for the full cost to replace or rebuild your home, even if it costs more than your policy limits.

Homeowner's insurance
This protects the homeowner from any potential losses or damage to their homes, personal property, or injury to others. All homeowners’ insurance is different and is subject to the terms, limits, and conditions of the signed policy.

Indemnity
This is compensation made to the victim of a loss either by payment, repair, or replacement. Under liability insurance, indemnity is an obligation by the insurer to defend and pay third party claims.

Insured
Someone who is covered by an insurance policy.
 
Insurer
A company or organization that provides insurance to the insured.
 
Liability
Any legally enforceable obligation or responsibility for the injury or damage suffered by another person.

Loss
The dollar amount of damage, or loss, sustained to property or a person.

Movable property
Anything that is insured that is portable, or can be moved out of the home (e.g., jewelry, musical instruments, artwork).

Policy
The insurance contract between you and the insurance company.

Premium
A specific payment made periodically by the insured to the insurer for insurance coverage for a defined period of time.

Rider
This is separate coverage that is added to your existing homeowners insurance policy and usually requires a separate premium.

Umbrella policy
This provides additional liability coverage for your home and automobile.

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