Actual Cash Value
An amount equivalent to the replacement cost of lost or damaged property at the time of the loss, less depreciation.

Additional Living Expense Coverage (a.k.a. Loss of Use)
Expenses incurred by the insured while the property is unfit for use. "Additional living expenses" means any necessary increase in living expenses (such as rent for alternative housing) incurred so that the household can maintain its normal standard of living.

Deductible
The portion of an insured loss to be borne by the insured before any recovery may be made from the insurer.

Dwelling Coverage
Coverage provided on the structure of the home itself.

Flood Insurance
A form of insurance designed to reimburse property owners for loss due to the defined peril of flood. Usually sold in connection with a government flood insurance plan.

Insured
The policyholder or the person or persons covered by insurance.

Insurer
The insurance company assuming risks and agreeing to pay claims or provide services.

Liability Coverage
Protects an insured against injury or damage claims made by other parties when there is a lawsuit brought against the insured.

Medical Payments
Covers necessary medical expenses incurred within three years of an accident causing bodily injury. An accident is covered only if it occurs during the policy period. (Note: This coverage does not apply to expenses related to the injuries of the named insured or any regular resident of the insured's household, except residence employees.)

Other Structures
Structures, such as a garage or storage shed, which are separated from an insured dwelling by a clear space, or are connected only by a fence or utility line. Dwelling and homeowners policies provide coverage for the other structures.

Peril
A cause of potential loss. Fire, lightning, windstorm, hail, explosion and theft are common perils. The insurance policy will name the perils insured against, or it may be an all-risk type form–one that insures against all perils except those specifically excluded.

Personal Articles Floater (PAF)
A basic form used to insure certain classes of personal property on an itemized and scheduled basis. The PAF usually contains a preprinted schedule that lists the following classes of insurable property: jewelry, furs, cameras, musical instruments, silverware, golf equipment, fine arts, stamps and coins. For each class of property covered, an amount of insurance must be shown and the article(s) must be described. A personal articles floater is flexible and other classes of property may be included, subject to the appropriate rates and forms.

Personal Property
Any property of an insured other than real property. Homeowners policies protect the personal property or contents inside the home including clothes, personal computers, televisions, etc.

Premium
The price of the insurance policy for a specified period of time.

Replacement Cost
The cost of replacing property without a reduction for depreciation. By this method of determining value, damages for a claim would be the amount needed to replace the property using new materials.

Risk
The uncertainty of loss.

Umbrella Liability Policy
A coverage basically affording high limit coverage in excess of the limits of the primary policies as well as additional liability coverages. The term "umbrella" is derived from the fact that it is a separate policy over and above any other basic liability coverage the insured may have.