Home Insurance Glossary

Please find below our alphabetically organised Travel Insurance Glossary.

Act of God An unpreventable accident or event that is the result of natural causes; for example, floods, earthquakes, or lightning.

Actual Cash Value An amount equal to the replacement cost of lost or damaged property at the time of loss, less depreciation.

Additional Insurance Insurance that supplements an already existing policy. It is uncommon that the company or its duly authorized agent allows additional insurance.

Additional Living Expense Any necessary increase in living expenses incurred by the insured, so the household can maintain its normal standard of living.

Applicant A person who fills out and signs a written application for insurance.

Application A written statement by a prospective policyholder that gives the information the company relies upon when evaluating the applicant and issuing the policy.

Appraisal A survey by a Liberty Mutual Claims Representative or Claims Appraiser estimating the amount of damage to property and the cost to repair or the determination of a complete loss.

Basic Limits The lowest coverage amount, as prescribed by law or the company, for which an insurance policy can be written. Basic Limits primarily prescribe limits of liability.

Cancellation Termination of an insurance contract before its expiration date by either the insurance company or the policyholder.

Claim A demand for payment under an insurance contract for the estimated or actual amount of loss.

Conditions Provisions that set forth the rights, duties, and responsibilities of the parties to an insurance contract. Conditions may be found anywhere in the contract.

Coinsurance Clause A clause requiring the insured maintains insurance on the property at least equal to a stipulated percentage of its value in order to collect partial losses in full.

Damages A sum of money that a party is legally obligated to pay to another as compensation for injury.

Declarations The part of the policy that provides detailed information about the insured, the insurer, and the coverages.

Deductible The amount of a claim that the policyholder has agreed to pay. This amount is deducted from a claims payment.

Depreciation A decrease in the value of any type of tangible property over time.

Effective Date The date the coverage begins on an insurance contract (policy).

Endorsement An amendment to your policy written especially to cover unique items just for you. An endorsement is also a change to your policy that is made during the policy's term. An endorsement is attached to your policy to modify the terms of the insurance contract.

Exclusion Part of an insurance contract that excludes coverage of certain perils, persons, property, or locations.

Expiration Date The ending date of an insurance contract (policy).

Extended Coverage A clause in an insurance policy or in an endorsement that provides additional coverage for other hazards or risks than those provided under the basic policy provisions.

Fire Insurance Contract prescribed by each state insuring against direct loss by fire, lightning, and other defined causes.

Flood Insurance Coverage against damage caused by the rising or overflowing of bodies of water. This is available through a national insurance program and must be bought separately.

Hazard Situation or condition that increases the possibility or extent of a loss.

Homeowner's Policy A form of package policy including fire and other perils, theft insurance, and comprehensive personal liability. The premium is stated as one amount.

Insurance Department A state's department that has responsibility for the enforcement of the state's insurance code. It is charged with the supervision and licensing of insurance companies and agents and the general administration of insurance laws of the state.

Loss of Use Insurance Compensation for loss caused because the policyholder has lost the use of his property.

Mobile Home Insurance A special policy designed to meet the needs of mobile home owners or occupants, covering physical damage to the home, contents, and personal liability while the home is used as a permanent residence.

Mortgage Clause A clause in an insurance policy that makes a claim jointly payable to the policyholder and the party that holds a mortgage on the property.

Occurrence An accident or loss, including continuous or repeated exposure to substantially the same general harmful conditions, that result in property damage.

Partial Loss A loss that does not completely destroy the insured property that is covered by an insurance policy.

Premises The building insured or containing the insured property. Depending on policy conditions, it may also include an adjacent area.

Property Damage Means physical injury to, destruction of, or loss of use of tangible property.

Property Insurance First party insurance of real and personal property against physical loss or damage.

Real Property The earth and all attached land and buildings, also known as real estate.

Replacement Cost Coverage for replacing property with new material; depreciation is not taken into consideration.

Residence Employee An employee of an insured whose duties are related to the maintenance or use of the insured residence premises.

Residence Premises Principal residence of the named insured.

Tenants Policy A form of homeowner policy sold to person(s) who rent their living quarters.