The Dictionary.
Insurance is written in words you were never taught: deductible, subrogation, endorsement, aggregate. The dictionary translates every one.
Why we made this
We are independent brokers. We do not answer to a carrier, we answer to you. And you make sharper calls when you understand the words on your policy instead of nodding along to them. So here is every term we would explain across the desk, written the plain way.
Bookmark this page. It is here anytime a term on your policy stops you.
- actual cash value
- Replacement cost minus depreciation — what the item is worth today given its age and condition.
- additional insured
- Someone added onto your policy by endorsement so they get the benefit of your coverage too.
- additional living expense
- Covers the extra cost of living somewhere else while your home is being repaired after a covered loss.
- adjuster
- The person assigned by the insurance carrier to investigate, value, and settle a claim.
- aggregate limit
- The most your insurance will pay over the entire policy year — total, across all claims combined.
- agreed value
- A pre-set payout amount you and the insurer agree to up front, no depreciation arguments at claim time.
- all risk
- Coverage for any cause of loss except those specifically excluded.
- binder
- Temporary written evidence that coverage has been bound, used while the actual policy is being issued.
- business interruption
- Covers the income you lose and the ongoing expenses you still have to pay while your business is shut down by a covered loss.
- business owners policy
- A pre-packaged commercial policy bundling general liability and commercial property for small businesses.
- buy-sell agreement
- A legal agreement among business owners, typically funded by life insurance, that triggers a sale of an owner's interest to the others on death or other triggering event.
- certificate of insurance
- A one-page summary of your insurance coverage, issued to a third party as proof you're insured.
- claim
- A formal demand for payment under an insurance policy, made by the insured (first party) or by a third party against the insured.
- claimant
- The person making a claim against you under your liability coverage.
- claims-made
- A policy form where coverage is triggered by when the claim is filed against you, not when the act happened.
- coinsurance
- A clause that penalizes you on a claim if you've underinsured the property.
- combined single limit
- One single liability limit that covers bodily injury and property damage together, instead of separate per-person and per-accident sublimits.
- commercial auto
- Auto liability and physical damage coverage for vehicles owned, leased, or operated by a business.
- cyber liability
- Coverage for the costs of a data breach, ransomware attack, or other cyber incident.
- declarations page
- The summary page at the front of your policy that lists what's covered, the limits, the deductibles, and what you paid.
- deductible
- The amount you pay out of pocket on a claim before insurance starts paying.
- denial of claim
- The insurer's formal refusal to pay a claim, with stated reasons.
- depreciation
- The reduction in value applied to property because of age, wear, and obsolescence — used in ACV settlements.
- directors and officers
- Personal liability coverage for executives and board members for decisions they make on behalf of the company.
- DP-3
- A landlord policy for rental properties — like an HO-3 but written for non-owner-occupied homes.
- dram shop
- Liability coverage for businesses that serve alcohol — protects against claims arising from over-serving a customer who then causes harm.
- employment practices liability
- Covers claims by employees for harassment, discrimination, wrongful termination, retaliation, and similar.
- endorsement
- A document attached to your policy that adds, removes, or modifies coverage.
- exclusion
- Something the policy specifically does not cover, listed in the policy form or added by endorsement.
- experience modifier
- A multiplier on your workers' comp premium based on your claim history vs. similar businesses.
- first party
- Coverage that pays you, the insured, for your own losses — as opposed to third-party (liability) coverage that pays others on your behalf.
- general liability
- The base liability coverage for a business — covers third-party bodily injury, property damage, and personal/advertising injury claims.
- hired and non-owned auto
- Liability coverage for vehicles your business uses but doesn't own — rental cars, employees' personal cars used for work errands.
- HO-3
- The most common homeowners policy — covers your home all-risk and your personal property named-peril.
- HO-5
- An upgraded homeowners policy where personal property is also all-risk, not just the dwelling.
- HO-6
- A condo owners policy — covers your unit's interior, your belongings, and your personal liability.
- inland marine
- Despite the name, this covers movable business property — tools, equipment, electronics — wherever they go, including off-site jobs.
- key person
- Life insurance owned by a business on a key employee or owner — the business is the beneficiary.
- loss of use
- Coverage for the costs and lost rents while you can't use your property after a covered loss.
- loss payee
- A lender or lessor named on the policy to be paid first on a property loss, ahead of the insured.
- loss runs
- A report from a carrier listing all claims activity on a policy over a stated period — usually 3 to 5 years.
- master policy
- The condo or HOA association's policy that covers shared structures and common areas. Your HO-6 covers everything inside your unit and gaps the master leaves.
- mortgagee
- The bank holding the mortgage, named on your homeowners policy to receive loss payments and notice of cancellation.
- named insured
- The person or entity actually buying the policy and named on the dec page.
- named peril
- A property policy that only covers losses from causes specifically listed (fire, lightning, wind, etc.) — anything not listed is not covered.
- occurrence form
- A policy form where coverage is triggered by when the act happened, regardless of when the claim is filed.
- ordinance or law
- Coverage for the extra cost of rebuilding to current code after a loss, when the building wasn't up to code before.
- per-occurrence limit
- The most your insurance will pay for any single claim or incident.
- policy period
- The dates between which the policy is in effect — typically one year, listed on the dec page.
- premium
- What you pay for the insurance coverage.
- premium audit
- The end-of-policy review where the carrier checks your actual payroll/sales against the estimates, and bills or refunds the difference.
- primary and noncontributory
- An endorsement that says your policy pays first and the other party's policy doesn't have to chip in.
- prior acts
- Coverage for claims arising from work performed before your current claims-made policy started, going back to a specified retroactive date.
- products and completed operations
- Coverage for bodily injury or property damage caused by your products after they've left your hands or your work after it's been completed.
- professional liability
- Coverage for claims that you gave bad advice, made a mistake in your professional service, or failed to perform.
- proof of loss
- A formal sworn statement from the insured documenting the loss, required by most property policies before the carrier will pay.
- replacement cost
- What it costs to rebuild or replace something today, with no deduction for age or wear.
- retroactive date
- The earliest date for which a claims-made policy will cover work — claims from work performed before this date are not covered.
- rider
- Same as an endorsement — a document attached to a policy that adds, removes, or modifies coverage.
- scheduled articles
- Specific high-value items (jewelry, art, collections) listed individually on your policy with their own appraised values.
- self-insured retention
- An amount you pay yourself before insurance attaches — like a deductible, but you also handle the defense for losses below it.
- sublimit
- A smaller cap inside the main policy limit that applies to a specific kind of loss.
- subrogation
- When your insurer pays your claim and then goes after whoever caused the loss to get the money back.
- tail coverage
- Extended reporting period after a claims-made policy ends, so claims for old work can still be filed against it.
- term life
- Life insurance that pays a death benefit only if you die during a fixed period (10, 20, 30 years) — no cash value, just protection.
- third party
- A claimant outside the insurer-insured relationship — someone who claims against you under your liability coverage.
- umbrella policy
- A separate policy that adds liability limits on top of your home, auto, or business policies — and may broaden coverage in places where the underlying policies don't reach.
- underinsured motorist
- Coverage that pays you when you're hit by someone whose liability limits aren't enough to cover your damages.
- uninsured motorist
- Coverage that pays you when you're hit by someone with no liability insurance.
- waiver of subrogation
- An agreement that your insurance won't go after the other party to recover money it paid out, even if they caused the loss.
- whole life
- Permanent life insurance with level premiums, a guaranteed death benefit, and a cash value that grows on a fixed schedule.
- wind/hail deductible
- A separate, often percentage-based deductible that applies only to wind or hail damage, not other claims.
- workers compensation
- Insurance that pays employees for work-related injuries — medical bills, lost wages, disability — without going to court.
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