Reading through insurance terms can feel like deciphering a secret code – we get it. So to help you navigate the insurance landscape, we’ve compiled a list of 12 important home insurance terms that every homeowner should know. Ready to up your home insurance IQ?
1. Premium
Think of this as your membership fee to the insurance club. It’s the amount you pay, usually monthly or annually, to keep your coverage alive and well.
2. Deductible
The deductible is the amount you have to pay out of pocket before your insurance kicks in. A higher deductible usually means lower premiums, but it also means you’ll pay more in the event of a claim.
3. Coverage Limit
This is the maximum amount your insurance policy will pay out for a covered loss. It’s important to ensure that your coverage limits are adequate to replace or repair your home and belongings in the event of a disaster. So always make sure it’s enough to cover your ass..ets!
4. Claim
When life throws you a curveball (or a leaky roof), it could be time to file a claim. This is the formal request you make to your insurance company to compensate you for a loss or damage to your property that is covered by your insurance policy. When a covered event occurs, the homeowner submits a claim to the carrier with as much information as possible regarding the loss, such as photos or receipts.
The claim may be for damage to your home, personal property, a neighbor who gets bit by your dog, a fallen tree and so much more. Let the claim professionals guide you through the process from beginning to end. Learn more about Swyfft’s Claims Process including our Direct Repair Network.
5. Policy
This is a contract between a homeowner and an insurance company that provides financial protection against covered losses or damages to your home, and your personal belongings, and even protects you when someone else claims damage against you. It usually consists of several components. Remember – there’s also times when you’ll need to update your insurance policy.
6. Perils
Perils are the bad guys in your insurance story. It’s a specific cause of a loss or damage, such as fire, theft, or windstorm – like that time your neighbor’s tree decided to do the limbo on your roof. Your insurance policy will outline which perils are covered and which are excluded.
7. Liability Coverage
This is your personal bodyguard in the insurance world. Liability coverage steps in to protect against legal claims for bodily injury or property damage that you or your family members cause to others. It can also include legal defense costs.
8. Actual Cash Value (ACV)
This is the value of your belongings or property at the time of the loss, taking into account depreciation. So, that vintage record player might not be worth as much as you paid for it.
9. Replacement Cost
The amount it would cost to replace your home or belongings with new items of similiar kind and quality, without deducting for depreciation. So, your flatscreen TV might be covered at today’s prices – score!
10. Exclusion
Exclusions are the bouncers of your insurance policy – they decide who’s in and who’s out. These are specific perils or circumstances that your policy won’t cover. It’s important to review your policy exclusions to understand what risks you may be exposed to. If you’re unsure or have questions – it’s always best to reach out to your insurance agent.
11. Endorsement
Ever wish you could customize your insurance policy like a pizza order? That’s where endorsements come in. They’re also known as a rider or addendum. It’s an amendment to your insurance policy that modifies or expands coverage for specific items or circumstances not covered by your standard policy – like Equipment Breakdown Coverage.
12. Loss of Use
This is coverage that pays for additional living expenses if your home becomes uninhabitable due to a covered loss, such as a fire or natural disaster. This may include temporary housing, food, and transportation costs.
Familiarizing yourself with these 12 home insurance terms will better equip you to make informed decisions about your coverage and ensure you have the protection you need. If you have any questions about your policy or need clarification on any terms, be sure to contact your Swyfft Insurance Agent.