Insurance Glossary
25 insurance terms explained in plain English by Geneva Insurance Group, an independent agency serving Illinois, Indiana, and Wisconsin.
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.