- Actual cash value (ACV)
- A valuation method that generally accounts for depreciation. The exact calculation depends on the policy and applicable requirements. Ask whether a separate roof schedule changes the result.
- Admitted insurer
- An insurer licensed to transact the relevant insurance in the state. Its regulatory treatment differs from that of an eligible nonadmitted surplus insurer.
- Additional living expenses (ALE)
- Coverage for qualifying increased living costs following a covered loss that makes the home uninhabitable. Limits, time periods and triggers matter.
- Binder
- Temporary evidence of insurance issued by an authorized party. Confirm the effective date, terms and outstanding requirements; a quotation is not automatically a binder.
- Builders risk
- Property coverage designed for a construction or renovation project. What is included, who is insured and how the existing structure is treated vary by form.
- Deductible
- The amount of a covered loss allocated to the policyholder under the contract. It can be a dollar amount or a percentage of a specified value or limit.
- Dwelling limit
- The limit assigned to the insured building. It should be evaluated in relation to rebuilding needs and policy settlement provisions, not just sale price or mortgage balance.
- Endorsement
- A document that changes a policy. It may add, restrict, exclude or clarify coverage. Read it together with the main policy.
- Exclusion
- Policy wording that removes coverage for a specified cause of loss, property, activity or circumstance, subject to any stated exceptions.
- Force-placed insurance
- Insurance obtained by a mortgage servicer when required borrower coverage is missing or considered insufficient. Its protections and cost can differ substantially from a homeowner-selected policy.
- Guaranty association
- A state-created mechanism for certain covered claims when an insurer becomes insolvent. Surplus lines policies generally do not receive the protections that apply to eligible admitted policies.
- Loss assessment
- An assessment charged by a property association. A unit-owner policy may cover certain assessments, but not every charge; covered causes, sublimits and conditions matter.
- Minimum earned premium
- An amount or proportion of premium the insurer retains under stated terms even if the policy is canceled early. Other fees may also affect the refund.
- Named-peril coverage
- Coverage limited to causes of loss identified in the contract. A loss must meet the policy requirements rather than simply be absent from an exclusion list.
- Nonadmitted insurer
- An insurer not licensed as an admitted insurer for the placement in the state. Eligible nonadmitted insurers may be used through the lawful surplus lines process.
- Nonrenewal
- A decision not to continue the policy for another term. It differs from cancellation during the existing term.
- Open-peril coverage
- A form covering causes of loss unless excluded or otherwise restricted by the contract. It does not mean every loss is covered.
- Ordinance or law coverage
- Coverage addressing specified extra costs associated with building-code enforcement after a covered loss. Limits and the treatment of undamaged portions require review.
- Replacement cost
- A settlement approach based on replacing damaged property with property of like kind and quality, subject to terms and limits. Recovering withheld depreciation may require completed repairs.
- Surplus lines insurance
- Insurance placed with an eligible nonadmitted insurer through the applicable surplus lines process. The market can address difficult or unusual risks; the policy defines the actual protection.
- Unoccupied and vacant
- Policy terms describing the occupancy or contents of a building. Definitions, time thresholds and restrictions differ, so avoid relying on an everyday definition.
- Wind or hail deductible
- A deductible that applies to specified wind or hail losses. A percentage may be calculated against a dwelling limit or another defined amount rather than the repair bill.
Put the terms into context
Compare surplus insurance quotes or learn how coverage and exclusions work together.