Shopping for Homeowners Insurance? Common Terms to Note!

May 16, 2011 No Comments by


These are terms it’s good to know when shopping for homeowners insurance.

Independent Agent

A self-employed individual who represents multiple insurers and gets a commission from each on every policy he sells.


The method by which insurers assess risk to determine if you should get coverage and if so, what your premiums should be.


Your written contract with an insurance company to cover your home and personal property in the event of loss or damage.


The price you pay for homeowners insurance over a specific period of time.


A request made by the policyholder to the insurance company for reimbursement for property loss.


The amount of money the policyholder must pay on each claim before the insurance company steps in and picks up the rest of the tab.


Happens after a claim is filed, when the insurance company sends a representative to your home to assess the value of the property lost.


The losses to property that are not covered by your insurance company. These are enumerated in your policy.


An alteration, in writing, to the original coverage offered in your policy.

Individual Policy

A policy that is sold to an individual homeowner. It is not necessary to be a member of an employment-related group, or other type of group to obtain such a policy.

Group Policy

Policies available through groups the policyholder belongs to. Such groups can be associations, special insurance trusts, or employment-related.

Inflation Protection

A part of a policy that automatically adjusts coverage limits to meet the rising costs of home repair.


Immediate termination of a policy due to misrepresentation by the policyholder or other reasons delineated in the policy.

Nonrenewable Policy

When an insurer chooses not to renew a policy citing provisions in the policy that are acceptable reasons for nonrenewal under state law.


An estimate of the decrease in value of your property that has occurred over time due to wear and tear and aging, as well as other factors.

Market Value

The current value of your home, including the land it is situated on.


Failure to pay your premium by the due date. Unless there is a grace period, this may result in policy cancellation.

Liability Insurance

Covers losses that a policyholder is legally responsible for due to negligence.


Anything that is the cause of a loss—from natural disasters to theft.

Personable Property

Anything you own that is either movable or temporary in some way, such as items of jewelry, clothing, or furniture.

Real or Tangible Property

Land, or anything attached to, embedded in, or growing on it.

Replacement Cost Coverage (on Dwelling)

What the insurance company pays you to replace damaged property or structures, not factoring in depreciation. There is usually a cap on this.

Replacement Cost Coverage (Contents)

What the insurance company pays you for the replacement of damaged or lost personal property.


A specific amount that is less than the maximum coverage offered by your policy and applies to particular types of property.

Home Insurance, Home Services

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