Home Insurance Terms

Actual Cash Value (ACV)

The amount of money that is needed to cover the rebuild of your home after depreciation. Insurance companies normally deduct for age and condition of the house.

Claim

A request to be provided with money in order to repair your home in the event that a covered accident or loss has occurred.

Deductible

The amount that you must pay out of your own money, based on the deductible that you and your insurance company have agreed on.

Depreciation

The value decrease of your home or property because of the wear and tear over time. Depreciation begins as soon as you have bought your property.

Endorsement

A modification made on or added to your home that changes the original terms of your insurance policy.

Exclusion

A person or situation that is not covered by your home insurance policy; for example, a flood, if you did not purchase the separate insurance.

Liability

An accident for which you are at fault, and for which your insurance company will cover.

Loss of Use

This type of coverage will pay for living expenses if your house is inhabitable because of a covered accident.

Medical Payments Coverage

Pays for injuries up to a limit based on an agreed amount or number between you and your insurance company. Exclusions may apply depending on the insurance provider.

Named-Perils Policy

Pays for a loss that is covered in your policy.

Peril

The event which has caused a loss, such as a fire, heavy winds, theft, and anything else that damages your home and is covered in your policy.

Replacement Cost

The amount to replace/repair damaged property that will not deduct for depreciation.

Special-Form Policy
May cover a loss that is not included in‐ but also not excluded from‐ your policy. Inquire about this to your insurance provider.