Insurance Claim Glossary

This glossary explains common words found in insurance conversations and policy documents. Definitions are general orientation, not contract interpretations: a policy’s own wording and state rules control. Ask the insurer or a licensed agent to explain a term as it applies to your coverage.

Actual cash value (ACV)

A valuation approach that accounts for depreciation or age and condition when valuing damaged property.

Appraisal clause

A policy provision that may describe a process to resolve disagreement about the amount of a property loss. It does not necessarily decide whether the loss is covered.

Claim

A request to an insurer for benefits or payment under a policy after a reported event.

Claims history report

A consumer report that may contain information about prior insurance losses or inquiries. Consumers can request a disclosure from the reporting agency.

Coinsurance

A policy condition that can connect the amount of insurance carried with a required percentage of a value, affecting payment under specified circumstances.

Declarations page

A policy summary that commonly identifies named insureds, covered property, policy period, limits and deductibles. It is a summary, not the full contract.

Deductible

The amount the insured pays toward an insured loss before the insurer pays under the applicable coverage. It may be a fixed amount or percentage.

Depreciation

A reduction in an item's value in a valuation calculation due to age, wear or condition.

Dwelling limit

The policy limit associated with the insured residence structure, subject to coverage terms and settlement provisions.

Endorsement

A document that changes, adds or removes terms in an insurance policy.

First notice of loss (FNOL)

The initial report to an insurer that a loss or event has occurred.

Flood coverage

Insurance protection for qualifying flood damage. Standard homeowners policies generally do not cover flood; separate coverage may be needed.

Hurricane deductible

A deductible that may apply to qualifying hurricane damage under a policy. Its trigger and calculation depend on contract and applicable rules.

Liability limits

The maximum amount available under a policy for covered liability claims, subject to terms and exclusions.

Loss of use

A coverage category that may help with certain additional living expenses when an insured home cannot be lived in after a covered loss.

Ordinance or law coverage

Coverage that may help with certain increased costs caused by building-code requirements after covered damage, as described by the policy.

Personal property

Belongings such as furniture, clothing and household goods, subject to policy definitions, limits and exclusions.

Policy limit

A cap on payment for a coverage or loss category, as described by the policy.

Premium

The amount charged for an insurance policy or coverage during a stated period.

Proof of loss

Information or a formal statement about a claimed loss that an insurer may request under policy procedures.

Replacement cost value (RCV)

A valuation approach based on the cost to repair or replace property with comparable property, subject to policy terms and limits.

Subrogation

A process by which an insurer that paid a claim may seek recovery from a party it considers responsible, where permitted and applicable.

Total loss

A loss treated as a complete or near-complete loss under an insurer's or policy's applicable standards; the meaning can vary by context.

Umbrella policy

A policy that can provide additional liability coverage above certain underlying policies, subject to its own conditions and exclusions.

Underinsurance

A situation where a limit or amount of coverage may be insufficient for the value or cost associated with a loss.

Wind or hail deductible

A separate deductible that may apply to specified wind or hail losses, sometimes calculated as a percentage.

Actual repair estimate

A contractor or repair professional’s projected cost for identified work; it is not automatically the covered amount an insurer will pay.

Coverage exclusion

Policy wording that identifies circumstances, property or causes of loss for which coverage is limited or unavailable.

Claim-free discount

A pricing credit an insurer may offer under its own rules when a customer meets specified claim-history conditions.

Inflation guard

A policy feature that may adjust certain limits over time according to stated terms.

The terms above are not a substitute for reading the full policy. The declarations page helps locate limits and deductibles; sections on definitions, exclusions, conditions and loss settlement explain how the contract works. A single word can be defined differently across forms, so compare the document’s exact language rather than relying on a broad glossary label.

Finding reliable explanations

Triple-I offers consumer explainers on deductibles, claims, home coverage and inventories. NAIC provides insurance consumer resources and links to state departments. FEMA FloodSmart explains federal flood insurance resources. LexisNexis provides a consumer disclosure process for certain reports. These organizations serve different roles, and their material does not replace your own policy or professional guidance.

When an unfamiliar term affects a real loss, write down the policy section, the question you have, and the decision or document it affects. Ask the insurer to identify the relevant clause and explain any deadline or required paperwork in writing. For state-specific consumer assistance, NAIC can help locate the relevant insurance department.