Our Complete Insurance Glossary with Terms and Definitions

The purpose of this glossary is for educational purposes only. We have compiled a list of common insurance terms and provided definitions. Insurance terms can be complicated and overwhelming since there are quite many. Our goal is to simplify your life.

A.M. Best Company in Insurance

Learn about AM Best Company, an organization that assigns financial strength ratings to insurance companies and evaluates their creditworthiness.

Actual Cash Value in Insurance

Learn the definition and calculation of Actual Cash Value (ACV) in insurance, a term used to determine the value of an asset at the time of loss or damage.

Additional Coverages in Insurance

Discover what additional coverages are in insurance and how they can provide extra protection for your property or liability.

Additional Insured Terminology

Understand the role of an additional insured in insurance policies, who can be added to a policy as an extra protected party.

Admitted Insurer Terminology

Learn about admitted insurers in insurance, companies that are licensed and authorized to sell policies in a specific state.

Aggregate Limit in Insurance

Find out what an aggregate limit is in insurance and how it pertains to the maximum amount an insurer will pay for all claims within a specific time period.

Agreed Value Method in Insurance

Learn about the Agreed Value method in insurance, a way to determine the value of a property before a loss occurs.

All Risk Policy in Insurance

Discover what an all-risk policy is in insurance and how it provides comprehensive coverage for a wide range of perils.

Authorized Insurer in Insurance

Understand the concept of an authorized insurer in insurance, a company that is legally allowed to sell policies in a specific state.

Automatic Increase in Insurance

Discover what an automatic increase is in insurance and how it pertains to automatic increases in coverage limits over time.

Basic Named Perils in Insurance

Learn about Basic Named Perils in insurance, a type of coverage that only covers specific perils listed in the policy.

Binder in Insurance

A binder is a temporary insurance contract that provides coverage until a formal policy is issued. Learn more about binders.

Broad Named Perils in Insurance

Broad named perils coverage is a type of insurance policy that covers a wide range of risks and hazards. Learn more about broad named perils.

Broad Theft Coverage Endorsement in Insurance

A broad theft coverage endorsement is an add-on to an insurance policy that expands the coverage to include more types of theft. Learn more about broad theft coverage endorsements.

Builders Risk Coverage Form in Insurance

Builders risk coverage is a type of insurance that protects properties under construction from damage and loss. Learn more about builders risk coverage.

Burglary in Insurance

Burglary is the unauthorized entry into a building or property with the intent to commit a crime. Learn more about burglary and how it is covered by insurance with Steadily.

Businessowners Policy in Insurance

A businessowners policy (BOP) is a type of insurance package that combines general liability and property insurance for small businesses. Learn more about BOPs.

Casualty Insurance in Insurance

Casualty insurance is a broad category of insurance that covers losses from accidents, injuries, and other unexpected events. Learn more about casualty insurance.

Certificate Of Insurance Terminology

A certificate of insurance is a document that provides proof of insurance coverage. Learn more about certificates of insurance.

Coinsurance Clause in Insurance

Learn about the coinsurance clause, which is a requirement in a property insurance policy that the insured maintain insurance on the property.

Coinsurance Penalty in Insurance

Understand the concept of coinsurance penalty, which is a penalty that an insurance company may impose on an insured for not maintaining insurance on a property.

Common Policy Declarations in Insurance

Learn about common policy declarations, which are the initial pages of an insurance policy that provide details around the policy and policyholder.

Coverage Extensions in Insurance

Understand coverage extensions, which are additional coverage options that can be added to an insurance policy for an additional cost.

Coverage Form in Insurance

Learn about coverage form, which is a document that outlines the specific coverage provided by an insurance policy.

Coverage Trigger in Insurance

Understand the concept of coverage trigger, which is the event or series of events that must occur in order for an insurance policy to respond and provide coverage.

DP-1 Policy Insurance for Landlords

The DP1 policy is more limited than DP2 and DP3 policies as its a named peril policy. Learn more about DP1.

DP-2 Policy in Landord Insurance

Commonly known as Dwelling Fire Form 2, a DP2 policy is created for rental properties and is a named-perils insurance policy. Learn more about DP2.

Damages in Insurance

Learn about damages, which are monetary compensation awarded to an individual or organization as a result of a legal action or claim.

Declarations in Insurance

Understand the concept of declaration, which is a section of an insurance policy that lists the specific details of the policy such as the policyholder's name and the property being insured

Deductible in Insurance

Learn about deductible, which is the amount that an insured must pay before the insurance company begins to pay for a covered loss.

Defense Costs in Insurance

Understand the concept of defense costs, which are expenses incurred by an insurance company to defend an insured against a liability claim.

Dp-3 in Insurance

A DP3 policy is the third and most in-depth insurance policy and is considered the best insurance cover for rental properties. DP3 insurance operates as an open peril policy.

Dwelling Policy in Insurance

The part of a homeowner's policy that may help repair or rebuild your home's physical structure, condo, or place of residence if damaged by a covered peril.

Dwelling Under Construction Endorsement in Insurance

The policy includes different cover than those listed above, protecting unique shortfalls during constructions processes. Learn more about dwelling under endorsement.

Earned Premium in Insurance

The insurance term earned premium represents any premiums collected by an insurance company for the part of the insurance policy that has expired.

Earthquake Insurance in Insurance

Our complete insurance glossary with terms and definitions. From basic named perils to liability insurance, learn all about landlord insurance with Steadily.

Elevated Building in Insurance

Our complete insurance glossary with terms and definitions. From basic named perils to liability insurance, learn all about landlord insurance with Steadily.

Equipment Breakdown Protection Coverage Form in Insurance

The equipment breakdown coverage helps protect a wide variety of appliances and devices within your home if they break down or become damaged because of a covered incident.

Excess Coverage in Insurance

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Exclusions in Insurance

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Extended Coverages in Insurance

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Fair Credit Reporting Act in Insurance

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Flat Cancellation in Insurance

Under flat cancellation rulings, the policyholder will not have paid or started to pay any new premiums, so the need for a refund is non-existent.

Functional Replacement Cost in Insurance

Functional Replacement Cost is an insurance term to determine how much money you will be paid for property or item damages covered under your policy.

Hazard in Insurance

Anything that makes risk more probable or a loss more likely to occur due to the peril. There are five types of hazards: physical, morla, morale, legal, informational.

Homeowner's Policy in Insurance

A policy that integrates both personal liability cover and personal property coverage. Depending on the policy chosen by the insurer, the property coverage can vary.

Human Perils in Insurance

This type of peril is caused directly by a person(s) such as vandalism, regulation, poor design or production, theft, negligence, etc.

Incidental Occupancy in Insurance

Part of the homeowner's policy that authorizes cover on the insured individuals' business activities conducted on the residence premises.

Indemnify in Insurance

The measures of compensating the insured, as close to the same financial condition preceding the incident, for the loss or damage that has occurred.

Indemnity in Insurance

The insurance protections provided when damage or loss is sustained, insured needs to be restored to the approximate financial condition preceding the incident.

Inflation Guard Protection in Insurance

An insurance system that gradually increases property coverage to match the effects of inflation. Learn more about inflation guard protection.

Insurable Interest in Insurance

The realistic concern of a person acquiring insurance for any individual or estate against unforeseen events, such as death or losses.

Insurance Exclusion in Insurance

They are coverages that are excluded from your insurance policy. You'll usually find most exclusions after the main coverage sections in your policy.

Insurance Policy Cancellation in Insurance

Insurance policy cancellation refers to when there is an end or termination of an insurance policy before the confirmed end date.

Insurance To Value Terminology

The total amount of insurance purchases vs. the actual replacement cost of the insured property is usually expressed as a ratio.

Legal Liability in Insurance

A common law that states any person or entity is accountable for the financial damage suffered by another group, entity, or person.

Liability Insurance Terminology

Liability insurance is the action of transfering the weight of financial loss— because of a liability claim from the insured to insurer.

Liability Loss Exposure in Insurance

The possibility that a person or business will sustain a loss from a claim made against them stating they are legally responsible for injuries or damages sustained.

Libel/Slander in Insurance

When an untrue statement is broadcasted about an individual as a fact rather than an opinion. If the statement can be proven to be broadcasted maliciously, the harmed person can sue for damages.

Limited Liability Company (LLC) in Insurance

A legal entity allowed when forming a business; offers a sophisticated business structure and provides personal liability protection for debts incurred by the company.

Lloyd's Association in Insurance

A voluntary group of individuals is set up to write insurance policies; everyone is accountable for the amount of policy they write.

Loss Payee in Insurance

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Loss in Insurance

A loss is disadvantage or physical damage to a property that causes implies either the loss of use or a loss of income or both.

Market Value in Insurance

Market value is a neutral price that could be achieved from a property sale at the time of loss/damage.

Mobile Home Insurance

A type of homeowners insurance that protects a mobile homes structure and its contents; some policies also included property and liability insurance.

Named Insured in Terminology

In the insurance space, named insured signifies a business or person who is labeled as the insured in the policy contract.

Named Peril Policy in Insurance

Often called specified peril policy-only insures against losses specifically defined in the policies contract.

Named Peril in Insurance

Only insures against losses explicitly listed in the policy; if the risk is not listed, there is no coverage

Negligence in Insurance

Insurance negligence is a failure to act reasonably when faced with repairs that could lead to more damage.

Non-Admitted Insurer Terminology

A non-admitted insurance is organization that is not permitted or licensed to do business in a particular state.

Non-Special Flood Hazard Area in Insurance

An area considered a moderate-to-low threat flood zone and did not signify immediate danger. Zones B, C, or X are used to describe the type of flood.

Occurence in Insurance

An incident that happens at a specific time and place that resulted in a claim.

Open Peril Policy in Insurance

Unlike a named peril policy, an open peril policy provides cover to the insured for any loss caused by any peril that is not clearly ruled out by the policy

Ordinance Or Law Coverage Endorsement in Insurance

Insurance that gives part coverage for demolition costs and increased construction costs that are regulated by law or regulation.

Package Policy in Insurance

More than two types of insurance cover combined into a single contract; also called a multi-line policy.

Peril in Insurance

The source of personal injury or property damage; the cause of loss. Perils are terms used to name the risks that can cause injury or property damage.

Personal Injury in Insurance

Protects against damages that are not bodily but discriminatory like slander, libel, false arrest, violation of privacy, malicious prosecution, and wrongful entry.

Personal Liability & Medical Payments To Others Endorsement

A policy that validates liability cover to the dwelling policy, like the homeowner's policy, can be purchased as a standalone policy.

Personal Lines in Insurance

Personal lines insurance refers to any kind of insurance that covers individuals against loss that results from death, injury, or loss of property.

Personal Property Replacement Cost Endorsement

Endorsed by the homeowner's policy; adds relief cost cover for personal properties.

Personal Property in Insurance

Property that is not real estate can be an asset that is movable and not rooted in a fixed location.

Personal Umbrella Policy in Insurance

Extra insurance that gives the insured further protection and cover than other policies. It can provide coverage for certain lawsuits, property, and damage.

Policy Period in Insurance

Policy period is the date and length of time when the coverage begins and ends.

Primary Insurance in Insurance

Primary insurance refers to a coverage that takes priority when more than one policy or coverage bears on the same loss.

Proximate Cause in Insurance

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Repair Cost in Insurance

The fee to repair a damaged or destroyed item that is insured.

Replacement Cost in Insurance

The fee to replace a damaged or destroyed item is insured without lowering the price because of depreciation.

Robbery in Insurance

Attempting to steal or stealing property from an individual or place with force or a threat to force.

Scheduled Coverage in Insurance

A scheduled coverage is a policy that is customized to cover specific goods for a specific amount.

Scheduled Personal Property Endorsement in Insurance

An additional policy an insured individual can add to their homeowner’s policy; extends the type of coverage to protect against personal property and expensive goods.

Special Coverage in Insurance

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Special Flood Hazard Areas in Insurance

Refers to land with roughly a 1 percent chance of a flood occurring there in any given year. The two classifications for SFHA areas are 1) “A” zones and 2) “V” zones.

Specified Peril Policy in Insurance

Section of the insurance policy that insures against losses arising from particular events is clearly set out in the policy, such as theft or fires.

Subrogation in Insurance

Provides the insured- through the insurer- the legal right to file a liability suit against the party at fault which caused a loss to the insured. Learn more about subrogation.

Theft in Insurance

The action of unlawfully taking on stealing property includes burglary and robbery.

Umbrella Policy in Insurance

Extra insurance is available as personal or commercial insurance which gives the insured further protection and coverage than other policies.

Unit Property in Insurance

Comprising all components that work interdependently, such as the building and its parts used to structure the build, such as exterior walls, interior walls, plumbing fixtures.

Unoccupancy in Insurance

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Vacancy in Insurance

When a property or dwelling is unoccupied by people, insurers will restrict the level of coverage when the property is vacant for an extended period.

Valuation in Insurance

An insurance company uses this technique to figure out the most convenient payment for a loss.

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