Additional living expenses

  If your home is so damaged that you are unable to live there, most policies pay for some additional living expenses while repairs are being made. This could include limited motel, restaurant, and warehouse storage expenses. Actual cash value: The value of the property when it is damaged or destroyed. This is usually figured by taking the replacement cost and subtracting depreciation.

Binder

  A request for reimbursement for a loss covered by the policy. For example, a claim for items stolen from the policyholder's home. Choose a home insurance company that has a good track record for paying claims.

  The page attached to the front of a homeowner's policy that includes information such as the name and address of the insured, the property insured, its location, the dates the policy is effective, the amount of insurance coverage, the deductible, and other related policy information.

The amount the policyholder must pay per claim or accident. Deductibles are fixed amounts specified in the policy.

  A decrease in the value of property due to wear and tear or obsolescence. Each home insurance company has differing policies regarding this topic.

  An attachment to an insurance policy that amends and alters the coverage provided in the policy.

 Certain causes and conditions, listed in the policy, that are not covered. Each home insurance company has differing policies regarding this issue.

Floater

  Coverage for property that moves from location to location either on a scheduled or unscheduled basis. If the floater covers scheduled property, coverage is listed for each item. If a floater covers unscheduled property, all property is covered for the same limits of insurance.

Liability Coverage

  Insurance covering injuries to another person or damage to another person's property for which the insured is legally liable.

Market Value

  A real estate term that describes what the current value of your home would be if you were to sell it—including the price of the land. This amount generally is not involved in determining what amount to purchase under a homeowner's policy.

Medical Payments

  Regardless of who is "at-fault," this coverage pays for medical expenses of persons accidentally injured on your property by a member of your family or by your pets. Medical payments coverage does not apply to your injuries or those of anyone living with you or to activities involving your business. Each home insurance company plan varies and some may not offer this option.

Peril

  An event that causes damage to your property such as fire, theft, tornado, smoke, etc. Be sure your home insurance company plan covers these important areas.

Personal Liability

  This coverage protects you against a claim or lawsuit resulting from bodily injury or property damage to others. The coverage applies to you and all family members who live with you.

Premium

  The amount of money charged for your insurance.

Property Coverage

  Insurance providing protection against the loss or damage to real and personal property caused by specified perils covered in your insurance policy or contract. Each home insurance company plan varies and some may not offer this option.

Replacement Cost Coverage

  Replacement cost is what it would cost to completely replace your house or any part of it.

Risk

  This word has two meanings:

or insurers: (1) the chance of loss such as from a peril; and (2) the person or entity that is insured by a policy. Each home insurance company plan varies and some policies may have different risk assessment.

Replacement Cost on Contents

  This additional coverage pays for your losses on the basis of how much it would cost to replace or repair the item at current costs without deduction for depreciation. If the item is not replaced or repaired, only the actual cash value is payable.

Underwriting

  The process by which an insurance company selects and classifies risks according to their degree of insurability.