Home Insurance Terms and Phrases To Know

Ready to buy your first home or purchase a new homeowner’s insurance policy? Make sure you know all these common home insurance terms before you do.

ACV (Actual Cash Value) – Total value of your property, also known as replacement cost.

Adjuster – Works for an insurer to evaluate any losses and settle policy claims.

Appraisal – An analyzation to determine property value or damage value. Usually used to resolve claim disputes.

Binder – Temporary proof of insurance.

Declarations Page – Shows the name and address of the insurer, the policy time period, the premium, and the coverage amount.

Earned Premium – A premium amount that has already been paid in advance.

Endorsement (or “rider”) – Agreement that expands upon (or limits) the policy’s benefits.

Escrow – Money held by a third party until policy conditions are met.

Exclusion – Denies coverage for any specific person, object, or place.

First-Party Claim – When you file a claim against your own policy.

Grace Period – The time during which the policy is still viable even when a payment was missed.

Inflation Protection – Automatically adjusts policy for changes in costs.

Market Value – Home value based more on the surrounding market than the quality of the home.

Peril – A specific loss (flood, fire, theft, etc.) that is covered under your policy.

Personal Property – Refers to anything other than land that you own. Can include your home or the objects within it.

Reinstatement – The act of “re-starting” your policy after a lapse in coverage, usually due to a missed payment.

Residual Market – Insurers outside of the standard market.

Single Interest Insurance – Coverage for a party with insurable interest (like a lender) who is not the homeowner.

Underwriter – The person who determines your premium and assembles your policy.

Unearned Premium – Any monies that you owed but no longer owe due to a policy cancellation.

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