Comparity | Property and Casualty Insurance Vocabulary

Property and Casualty Insurance Vocabulary

A handy reference for common words and phrases in property and casualty insurance.

General

Coverage

The types of loss your insurance company will recover.

Deductible

A dollar amount that the insurance company subtracts from a claim.

Deductibles protect insurance companies from risk of claims for minor losses.

Endorsement

Optional, sometimes speciality coverage. Example, roadside assistance.

Home (a.k.a., Homeowners, Hazard)

All Peril Deductible

The amount subtracted from a claim for loss due to common perils that are not natural disasters. Some common perils are: fire, theft, water, and vandalism.

Dwelling Amount Coverage

Pays for the rebuilding or repair of your home's physical structure in the event of a covered loss. Dwelling amount is not the the market value of your home, which includes land.

Earthquake Protection Coverage

A separate policy required to protect your home in the event damage and loss directly caused by an earthquake. Damage from perils that occur after earthquakes, ex., fire, might not be covered by an earthquake policy but it might be covered by all peril coverage.

Escrow

A special bank account used by a mortgage lender to pay for home insurance when the insurance payment is included with the mortgage payment.

Finishes

The type and quality of materials used in the home for floors, walls, and counters. Builders' Grade: basic carpet, linoleum floors, laminate counter tops. Custom: plush carpet, wood and/or tile floors, granite/stone counter tops. Designer: exotic materials used throughout.

Flood Contents Coverage

Protects the things inside your house, ex., appliances and furniture, by helping to pay repair and replacement costs due to flood damage. Flood Contents Coverage is not included in a standard homeowners insurance policy. A separate flood insurance policy is required.

Flood Insurance

A separate policy that protects a home's physical structure, i.e., floors and walls, by helping to pay the cost of repairing flood damage. Flooding is not covered by a standard homeowners insurance policy! A separate flood insurance policy is required.

Loss Assesment Coverage

Protection for condominium owners and home owner association members against loss claims on common areas.

Loss of Use Coverage

Pays the costs of temporary housing when an insured home is being repaired due to a covered loss and the insured cannot live in the home.

Other Structures Coverage

Physical structures on the residence premises, separated from the dwelling by a clear space or connected to the dwelling by a fence, utility line, or related connection. Examples include a detached garage, tool shed, driveway, swimming pool, or fence.

Named Storm Deductible

The amount an insurance company subtracts from loss due to a named storm such as a hurricane or tropical cyclone, ex., 'Hurricane Matthew'. When quoted as a percentage, it is based on the dwelling amount not the loss amount. a.k.a., Hurricane Deductible, a.k.a. Tropical Cyclone Deductible

Replacement Cost Coverage

Ensures that items destroyed in a covered loss are replaced at their full current price without any depreciation.

Wind and Hail Deductible

The amount an insurance company subtracts from a loss due damage caused by wing wind or hail. When quoted as a percentage, it is based on the dwelling amount not the loss amount.

Auto

Accident Forgiveness Endorsement

Ensures rates will not increase for an accident even if it's the fault of the insured person. Most policies allow one accident forgiveness every few years. Terms vary by company.

Blanket Coverage

Coverage that applies regardless of vehicle.

Collision Deductible

The amount an insurance company subtracts from a loss when the insured's car crashes into an object, another car, or rolls over. This is a per-vehicle deductible.

Comprehensive Deductible

The amount an insurance company subtracts from a loss when the insured's car is damaged by things other than a collision; generally Fire, Falling Objects, Hitting Animal, Theft, and Natural Disaster. This is a per-vehicle deductible.

Original Equipment Manufacturer (OEM) Endorsement

Ensures replacement parts for a covered loss are produced by the originator of the part and not a third party, a.k.a. not "after market".

Per-Vehicle

Coverages, deductibles, and endorsements that apply only to one specific vehicle. Examples include, collision, comprehensive, roadside assistance, rental reimbursement, and others.

Rental Reimbursement

A per-vehicle endorsement that provides or reimburses the cost of a rental car when an insured car is being repaired due to a covered loss. This coverage does not apply for regular maintenance.

Roadside Assistance

A per-vehicle endorsement that provides or reimburses the cost for services when an insured vehicle breaks down and leaves the driver stranded.

Vanishing Deductible

An endorsement that reduces deductibles for each year without any incidents or claims. Terms vary by company.

Violation Forgiveness

An endorsement that ensures rates won't increase for minor traffic violations. Most policies allow one violation forgiveness every five years. Terms vary by company.