Insurance Glossary
25 insurance terms explained in plain English by Geneva Insurance Group, an independent agency licensed in 15 states (AZ, CA, FL, GA, IL, IN, MD, MI, MT, NM, NY, PA, SC, TX, WI).
General
- Claim— A formal request to your insurance carrier for payment after a covered loss.
- Coverage— A specific category of protection your policy provides — like Liability, Collision, or Dwelling.
- Deductible— The amount you pay out of pocket on a claim before your insurance starts paying.
- Endorsement / Rider— A modification to your insurance policy that adds, removes, or changes coverage.
- Insurance Score— A credit-based score most carriers use to set your premium — different from your FICO credit score.
- Policy— The legal contract between you and your insurance carrier that describes what is and isn't covered.
- Premium— The amount you pay your insurance company in exchange for coverage — usually monthly, every six months, or annually.
- Umbrella Policy— Extra liability coverage that sits on top of your auto and home policies — typically $1M-$10M for $300-$700/year.
- Underwriting— The process the carrier uses to decide whether to insure you and at what price.
Auto
- Collision Coverage— Pays to repair or replace your own car after a crash with another vehicle or object — regardless of fault.
- Comprehensive Coverage— Pays for damage to your car from non-collision events — theft, fire, hail, falling trees, hitting a deer.
- Liability Coverage— The portion of an auto policy that pays for injuries and property damage you cause to others.
- Personal Injury Protection (PIP)— No-fault medical coverage that pays your injuries from a car accident regardless of who caused it.
- Uninsured Motorist Coverage— Pays your medical bills (and sometimes car repairs) if you're hit by a driver with no insurance or not enough insurance.
Home
- Actual Cash Value (ACV)— A claim payout method that subtracts depreciation — usually pays less than replacement cost.
- Dwelling Coverage (Coverage A)— The part of your homeowners policy that covers the structure of your house itself.
- Loss of Use Coverage (Coverage D)— Pays your additional living expenses (hotel, meals, etc.) if your home becomes unlivable after a covered loss.
- Personal Property Coverage (Coverage C)— Covers the contents of your home — furniture, clothes, electronics, kitchenware, sporting goods.
- Replacement Cost— Coverage that pays to rebuild or replace your damaged property at today's prices, with no deduction for depreciation.
Life
- Beneficiary— The person or entity who receives the death benefit when a life insurance policyholder dies.
- Term Life Insurance— Life insurance that lasts for a fixed number of years (10, 20, 30) with no cash value — typically the most affordable option.
- Whole Life Insurance— Permanent life insurance that lasts your entire life and builds cash value over time.
Commercial
- General Liability Insurance— The foundational business policy covering injuries to customers/visitors and damage you cause to others' property.
- Professional Liability (E&O) Insurance— Coverage for service businesses against claims of mistakes, missed deadlines, or bad professional advice.
- Workers Compensation Insurance— Required state-mandated coverage that pays medical bills and lost wages for employees injured on the job.