Umbrella dictionary

The current value of your property after accounting for depreciation. If your 5-year-old TV breaks, ACV pays what it's worth today — not what you paid for it.

A person or organization added to your policy who gets some level of coverage. Landlords often ask to be listed as an additional insured on a renter's policy.

The person your insurance company sends to evaluate your claim. They inspect the damage, review your policy, and help determine how much you'll be paid.

Combining multiple insurance policies (like home and auto) with the same company. Bundling almost always earns you a discount.

A formal request you make to your insurance company asking them to pay for a covered loss. Filing a claim starts the process of getting compensated.

The percentage of a covered loss you agree to pay after your deductible. If you have 80/20 co-insurance, the insurer pays 80% and you cover 20%.

The maximum amount your insurer will pay for a covered claim. Going above this limit means you're paying the difference out of pocket.

The summary page of your insurance policy. It lists your coverages, limits, deductibles, premium, and the property or vehicles being insured.

The amount you pay out of pocket before your insurance kicks in. A $1,000 deductible means you cover the first $1,000 of a claim.

The decrease in value of your property over time due to age and wear. It's why actual cash value payouts are lower than replacement cost.

The date your insurance coverage officially begins. Any incidents before this date won't be covered.

An add-on or modification to your insurance policy that changes your coverage. Also called a rider. Example: adding jewelry coverage to a homeowners policy.

A specific situation, event, or type of damage that your insurance policy does not cover. Floods and earthquakes are common homeowners exclusions.

Another name for umbrella insurance. It provides coverage above and beyond the limits of your home or auto policy.

A window of time after your payment is due during which your policy stays active. Miss the grace period, and your coverage may lapse.

You must have a financial stake in the thing you're insuring. You can't buy insurance on your neighbor's house because you don't stand to lose anything.

The person or entity protected by an insurance policy. That's you (or your family members listed on the policy).

The insurance company providing coverage and agreeing to pay covered claims. Also called the carrier or underwriter.

Insurance that pays for injuries or damage you cause to someone else. It's a core part of both home and auto policies.

The risk that having insurance makes someone more careless. Insurers account for this when designing policies and setting premiums.

Failure to take reasonable care, resulting in damage or injury to someone else. If you're found negligent, your liability coverage responds.

The contract between you and your insurance company. It spells out what's covered, what's excluded, your limits, and your premium.

The person who owns the insurance policy. The policyholder is responsible for paying premiums and is the primary insured.

The amount you pay for your insurance coverage, usually monthly or annually. Your premium is based on risk factors like location, driving record, and coverage amount.

Documentation showing you have active insurance coverage. For auto, it's your insurance card. For home, it's typically your declarations page.

The amount it would cost to replace or rebuild your damaged property with new materials of similar kind and quality — without deducting for depreciation.

An add-on to your policy that extends or modifies coverage. Same thing as an endorsement. Common riders include scheduled jewelry or home office equipment.

When your insurer pays your claim and then seeks reimbursement from the party who caused the damage. You don't have to do anything — they handle it.

The period of time your insurance policy is active. Most home and auto policies have a 6-month or 12-month term and renew automatically.

A wrongful act that causes harm to another person. In insurance, torts often lead to liability claims. Umbrella insurance provides extra tort protection.

A policy that provides extra liability coverage above and beyond your home and auto limits. It kicks in when your other policies max out.

The process insurers use to evaluate risk and decide whether to offer coverage and at what price. They look at factors like your claims history, credit, and property condition.

Intentional damage to your property by someone else. Both home and auto policies typically cover vandalism as a named peril.