Many terms are common to all types of insurance. To help you understand better, we have a few listed here to help you navigate those waters.

What letter does the term you're looking for begin with?

Actual Cash Value (ACV)Actual Cash Value is the replacement cost of property minus depreciation.

Admitted Insurer – sometimes referred to as a “licensed insurer.” An insurance company that is authorized by the state’s insurance department to transact business in that state.

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Cancellation – the termination of the policy during the policy period. Cancellation can be initiated by either the insured or the insurer (company) provided the insurer follows the insurance department guidelines, state statutes, and gives proper notice.

Capacity – the amount of business an insurer is able to responsibly write while remaining financially solvent.

Captive Insurance Agency – an agency that is formed as a subsidiary of its parent company for the purpose of writing all of the insurance with the parent company.

Claim – a request from an individual, organization or business seeking to recover from the insurance company for a loss that may be covered by an existing insurance policy.

Claimant – any person, organization or business that submits a claim.

Contract – a legally enforceable agreement between parties.

Covered Loss – an event for which insurance pays.

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Declaration Page – an information page that provides details about the insured and the subject of the insurance (home, business, etc.)

Deductible – the portion of a covered loss that is not paid by the insurer (company). Deductibles may be expressed in the form of a specific dollar amount or a percentage.

Depreciation – the allowance for wear and tear on an item that decreases in value over time. Can also refer to obsolescence regarding technological or economic value.

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Endorsement – a document that amends the original insurance policy in some way.

Excess & Surplus Insurer (E&S) – a non-admitted or “unlicensed insurer” for the state in which they are writing E&S business.

Exclusion – policy rules that eliminate coverage for specific conditions.

Exposure – any condition, risk or situation that presents the possibility of a loss.

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Floater – a type of policy that is used to cover property or items that “float” or are movable from location to location. Examples are jewelry, furs, tools and electronic equipment, just to name a few.

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Guaranty Fund – a state fund that provides payment of claims in the event an insurance company becomes insolvent (bankrupt).

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Hazard – a condition that increases the chance of a loss event.

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Independent Adjuster – independent claim representatives that offer their claim handling services to the insurance company for a fee.

Independent Insurance Agency – an agency that sells insurance for multiple, unrelated companies.

Insurable Interest – a person, organization or business that would suffer a direct financial loss in the event the property sustained a loss. Examples of parties with an insurable interest would be your mortgage company, a leasing company or a landlord.

Insurance – a contract where one party (Insurance Co.) for premium agrees to reimburse another party (you/insured) for a loss to a specific subject caused by covered perils.

Insurance Broker – an independent business owner that sells insurance by representing customers rather than insurers (insurance companies.)

Insured – a person, organization or business whose property, life or liability is covered by an insurance policy.

Insurer – an insurance company.

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Line of Insurance – type of insurance.

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Mortgagee or Mortgage holder – the institution or person that loaned the money for a building, home or real property (such as a vehicle.)

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Named Insured – the policyholder whose name(s) appear on the declarations page of the insurance policy.

Negligence – the failure to act in a matter that is considered responsible and prudent.

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Peril – the means by which insured property is damaged or totally destroyed. Cause of loss – same as a peril.

Policy – a complete written contract of insurance.

Premium – a payment made by the insured to the insurance company in exchange for an insurance policy.

Public Adjuster – the person or firm hired by the insured to represent them during the handling of a claim for a percentage fee based on the amount of the settlement.

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Reinsurance – insurance for insurance companies.

Replacement cost (RC)Replacement Cost the cost to replace or repair property using new materials of similar kind and quality with no consideration for depreciation.

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Solvency – the ability of an insurance company to pay its claims and financial obligations, not only in the present but several years into the future.

Subrogation – the insurer's right to recover payment from a negligent third party. For example, if your dishwasher leaked because of a faulty part, the company would pay your claim and then go after the maker of the faulty part to be reimbursed for the payment made to you.

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Underwriter – the insurance company employee who evaluates risks against the pre-determined criteria for acceptability.

Underwriting – the process of insured selection, coverage pricing and determining policy terms and conditions, then monitoring the results of those decisions.

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Vandalism – willful and malicious destruction of property.

X-Wind – An exclusion on a policy that applies to wind, hail, tornado, hurricane and tropical storm, due to the property’s location in a high-risk area. Properties designated for exclusion receive a reduction in premium for the coverages not applied.