Get 5 California Home Insurance Quotes in minutes*

Home Insurance Glossary

Actual Cash Value (ACV): The actual cash value of a piece of property at the time of loss. The ACV is less than the replacement cost due to depreciation, since depreciation decreases value.

Blanket Insurance: Covers the common areas of a condo, co-op or an area governed by a homeowner's association. Blanket insurance does not cover properties or the content of properties. It covers areas owned in common.

Cancellation: Termination of an insurance contract before the expiration date by the insured or the insurance company.

Claim: A request for payment to recover a loss that is protected by an insurance policy.

Deductible: An agreed amount that must be paid by an insured person making a claim against an insurance policy before an insurer will pay any compensation.

Depreciation: Drop in value. The decrease in value of an item or property over time.

Effective Date: Also called "inception date." The date the insurance policy's coverage goes into effect.

Endorsement: An alteration in an insurance policy. A clause added to an insurance policy that changes the coverage.

Exclusion: An insurance policy provision that excludes certain persons, events, conditions or situations form coverage as outlined in the policy.

Flood Insurance: An insurance policy that pays the homeowner for damages caused by flood.

Hazard Insurance: Insurance coverage that pays for damages to a property resulting from natural disasters such as fire, hurricanes, earthquakes, etc.

Homeowner's Insurance: A type of insurance for the home that combines liability insurance and hazard insurance.

Liability Insurance: Insurance coverage designed to protect against claims alleging one's negligence or inappropriate action resulting in bodily injury or property damage.

Loss of Use: Coverage that pays for expenses such as accommodations or food while the home is undergoing repair.

Medical Payments: Coverage that pays for an individual's medical expenses when they are injured on a homeowner's property whether the property owner is responsible for the injuries or not.

Mortgage Insurance: An insurance policy paid monthly by the borrower that protects the lender by paying any costs associated with foreclosing on a home. Also called "MI" or "PMI", mortgage insurance is required if the down payment on the property is less than 20 percent of the property's sale price.

Named Coverage: Insurance coverage that covers exactly what is named in the policy.

Peril: A condition, action or event that causes a loss.

Property Crime: Any crime to the property including home invasion, burglary, vandalism, larceny, and car theft.

Replacement Cost: The amount needed to replace or repair damaged property at current prices.