Glossary

Replacement cost minus depreciation, meaning what the item was worth given its age and wear. Pays less than replacement cost.

Example: A comparable new TV costs $900, but yours was 6 years old. ACV might pay $300.

Someone else added to your policy so it also protects them for claims arising from your work. Clients and landlords often require it.

The person who investigates a claim and works out how much the insurer owes. Usually works for the insurer. A "public adjuster" works for you, for a fee.

A licensed person who sells insurance. A "captive" agent sells for one company; an "independent" agent can quote several.

The most a policy will pay for all claims added together during the policy period, usually one year.

Example: $1 million per occurrence and $2 million aggregate: no single incident over $1M, and no more than $2M for the whole year.

The person or people who receive the money from a life insurance policy.

Physical harm to another person, such as a broken arm. Liability coverage pays for their medical bills, lost wages and pain and suffering if you're responsible.

A licensed intermediary who shops policies from many insurers on your behalf. Common for business insurance.

Pays the income a business loses, and ongoing bills like rent and payroll, while it's closed after covered physical damage.

A package for small businesses that combines property insurance, general liability and business income coverage, usually cheaper than buying them separately.

A travel insurance upgrade that refunds part of your trip cost, usually 50 to 75%, if you cancel for a reason the standard policy doesn't list. It must be bought soon after your first trip payment.

A one-page summary proving a business has insurance, often requested by clients and landlords. It doesn't change the coverage itself.

Your request to the insurer to pay for a loss under your policy.

Covers claims made while the policy is active, for incidents after its retroactive date. Common for professional, cyber and management liability. If you cancel, you may need "tail" coverage.

A federal rule that lets you keep your employer health plan, usually for up to 18 months, after leaving the job. You pay the full premium plus up to 2%, which is often expensive. It applies to employers with 20 or more employees.

Your percentage share of costs after you meet your deductible.

Example: With 20% coinsurance, a $2,000 bill after your deductible costs you $400.

A rule in business property policies: if you insure a building for less than a set share of its value, usually 80%, claim payments are cut in proportion.

Example: Building worth $1M, insured for $600k with an 80% clause. You should carry $800k, so you carry 75% of the requirement, and a $100k loss pays about $75k minus the deductible.

Pays to repair your own car after it hits another car or an object, or rolls over, whoever was at fault.

Covers a business when it's blamed for injuring someone, damaging their property, or harming them through advertising.

Pays for damage to your car from things other than a crash: theft, hail, flood, fire, falling trees, vandalism, hitting a deer.

A fixed amount you pay for a specific service, like $30 for a doctor visit.

In travel insurance, one of the specific reasons listed in the policy that allow a refund, like your illness or a hurricane at your destination.

The summary page of your policy: who and what is insured, the coverages you bought, their limits, your deductibles, the policy period and the price.

The part of a covered loss you pay yourself before the insurer pays the rest. A higher deductible usually means a lower premium.

Example: A storm causes $6,000 of damage and your deductible is $1,000. You pay $1,000 and the insurer pays $5,000.

The loss in value from age and wear. Actual cash value payouts subtract it.

Covers the people running a company or nonprofit, and often the organization, against claims about their management decisions.

Pays to repair or rebuild the house itself and things attached to it, like the roof, walls, built-in appliances and a garage attached to the house.

How long you must be unable to work before disability insurance starts paying, like 90 days.

The second part of a workers' comp policy. Covers lawsuits related to work injuries that fall outside workers' comp, like a spouse suing for loss of companionship.

Covers a business against claims from employees or applicants, like wrongful firing, discrimination or harassment.

A change added to a standard policy that adds, removes or adjusts coverage. Endorsements override the main policy text.

Example: A water backup endorsement adds cover for sewage backing up through a drain.

A health plan like an HMO in that it doesn't pay out of network, but usually doesn't need referrals.

Something the policy says it will not cover, even if it would otherwise fit.

Example: Flood is excluded from standard home policies.

A statement from your health plan showing what a provider billed, what the plan paid, and what you owe. It is not a bill.

Pays the extra costs of keeping a business running after covered damage, like renting a temporary space.

Pays a landlord the rent they lose while a rental unit can't be lived in after a covered loss.

An area mapped by FEMA, the US federal disaster agency, by how likely it is to flood. In a high-risk zone, most mortgage lenders must require flood insurance.

An employer account you fund from your paycheck, tax-free, for medical costs. Unused money is generally lost at year-end, unless your employer offers a small carryover or grace period.

If your car is totaled, pays the difference between what the car is worth and what you still owe on the loan or lease.

A plan with a higher deductible and lower premium that lets you open a tax-free health savings account (HSA).

Business liability coverage for when you or employees drive rented or personal cars for work.

A health plan that only covers doctors in its network (except emergencies) and usually needs a referral from your primary doctor to see a specialist. Often cheaper.

A tax-advantaged savings account for medical costs, available only with a qualifying high-deductible plan. The money is yours to keep, even if you change jobs.

A separate, larger deductible for wind or hurricane damage, often a percentage of your dwelling limit rather than a dollar amount.

Example: A 2% hurricane deductible on a $400,000 house is $8,000.

Despite the name, insurance for business property that moves around, like a contractor's tools, a photographer's gear, or goods in transit.

Your legal responsibility for harm you cause to other people or their property. Liability coverage pays their claims against you and your legal defense.

The most the policy will pay. Anything above the limit is on you.

Example: Your liability limit is $300,000 and a court awards $400,000. You owe the other $100,000.

A charge an association passes on to each owner when a loss to shared property isn't fully paid by its insurance. Loss assessment coverage pays your share.

Pays extra living costs, like a hotel and restaurant meals above your normal grocery bill, while your home can't be lived in after a covered loss.

The government-run place to compare and buy individual health plans. Depending on income you may get help paying the premium. Some states run their own site.

The insurance a condo or homeowners association buys for the building and shared areas. What it covers inside units varies, so owners need to know which kind it is.

Pays small medical bills for a guest hurt on your property, no matter who was at fault. Usually $1,000 to $5,000.

Your mortgage lender. It's named on your home policy so claim checks for the house include the lender.

A way of writing a policy that covers only the causes of loss it lists. If a cause isn't listed, it isn't covered.

The doctors and hospitals that have a contract with your health plan. Going outside it costs more, or isn't covered at all.

The federal program, run by FEMA (the US disaster agency), that sells most US flood insurance through regular insurance agents.

A state where your own insurance pays your injury costs after a crash, up to a limit, regardless of fault. You can sue the other driver only for serious injuries. About a dozen states, including Florida, New York and Michigan.

Covers incidents that happen during the policy period, even if the claim comes years later. Most general liability works this way.

The yearly window when you can sign up for or change health insurance. For HealthCare.gov it usually runs from November 1 to January 15.

A way of writing a policy that covers every cause of loss except the ones it specifically excludes. Broader than named perils.

Pays the extra cost of rebuilding to current building codes after a covered loss. Standard policies include only a small amount.

Example: Your 1970s house burns down, and code now requires sprinklers and new wiring. This pays the difference.

Covers buildings on your property that aren't attached to the house, like a detached garage, shed or fence. Usually 10% of the dwelling limit.

The most you'll pay for covered, in-network care in a year. After that the plan pays 100%. Premiums don't count toward it.

The most a policy will pay for one incident, no matter how many people or claims come from it.

A cause of loss, like fire, wind, theft or a burst pipe.

Example: Lightning is a peril. The burnt roof is the damage.

Life insurance meant to last your whole life that also builds a cash value. Much more expensive than term for the same payout.

Pays your and your passengers' medical bills and some lost wages after a crash, no matter who was at fault. Required in no-fault states.

Pays if you, your family or your pet injure someone or damage their property, and you're legally responsible. Includes your legal defense.

Your belongings: furniture, clothes, electronics, kitchenware. Covered at home and usually anywhere in the world.

The dates the policy is in force, often one year for home and business, six or twelve months for car.

A health plan that lets you see specialists without a referral and pays part of out-of-network care. Usually a higher premium.

A health problem you had before the coverage started. Travel insurance often excludes it unless you get a waiver by buying early. ACA health plans can't exclude it.

The price of the policy: what you pay the insurer, monthly or yearly, to be covered.

Example: $1,800 a year for home insurance, or $150 a month for car insurance.

Approval your health plan requires before some treatments, scans or drugs, or it may not pay.

The part of general liability that covers harm caused by something you sold or work you finished, after it left your hands.

Example: A deck you built collapses a month after you finished it.

Covers claims that your professional advice or service was wrong, late or negligent and cost a client money.

Damage to someone else's property. In liability coverage it pays when you're responsible, like your car hitting their fence.

Paying what it costs to repair or replace something with new, similar quality, with no deduction for age.

Example: Your 6-year-old TV is stolen. Replacement cost pays for a comparable new TV.

Listing a valuable item, like an engagement ring, on your policy for its appraised value. It removes the low sublimit and often covers loss, not just theft.

A window, usually 60 days, to get health coverage outside open enrollment after a life event like moving to the US, losing job coverage, marriage or a baby.

Liability limits written as three numbers, in thousands: injury per person, injury per accident, property damage per accident.

Example: 50/100/50 means $50,000 per injured person, $100,000 total per accident, $50,000 for property.

A form your insurer files with the state to prove you carry insurance, often required after a serious violation like a DUI or driving uninsured.

A smaller cap inside a larger limit for a specific kind of item or loss.

Example: Your belongings are covered up to $50,000, but stolen jewelry only up to $1,500.

After paying you, your insurer can go after the person who caused the loss to get its money back, and often your deductible too.

Not insurance for you: a guarantee to your client or the state that you'll do what you promised. If the bond pays out, you must repay the bond company.

An add-on to a claims-made policy that lets you report claims after the policy ends, for work done while it was active.

Life insurance for a set number of years, like 20 or 30. Pays only if you die in that time. Much cheaper than permanent insurance.

Extra liability coverage that starts where your home and car liability limits run out, usually in $1 million steps.

Pays for your injuries, and in some states your car, when the at-fault driver has no insurance or too little.

Time between buying a policy and when coverage starts, or before a benefit starts paying.

Example: Flood insurance through the NFIP usually starts 30 days after you buy it.

An add-on for water that backs up through sewers or drains, or overflows a sump pump. Excluded from standard home policies unless you add it.

Pays medical bills and part of lost wages for employees hurt or made ill by their job, regardless of fault. In return, employees generally can't sue the employer.