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Homeowners Insurance Quick Links

Did You Know?

Colorado is in the
top 10 states with catastrophe-related homeowners insurance claims.

Homeowners Insurance Glossary of Terms

Actual Cash Value

The cost of repairing or replacing damaged property with property of the same kind and quality, less depreciation (i.e., in the same physical condition as the original property prior to damage).

Additional Coverages

Extra coverage that can be purchased to provide protection above and beyond that provided in the homeowners policy (e.g., a higher amount of coverage against the theft of jewelry). When such additional coverage is purchased, it becomes an Endorsement or Rider to the original policy.

Additional Living Expense

The part of homeowners insurance that provides reimbursement for motel rooms, meals and other expenses when loss of property by a covered peril forces you to maintain temporary residence elsewhere. Also called loss of use coverage.


An insurance company representative who seeks to determine the extent of the insurer's liability for loss when a claim is submitted.


An insurance sales office that is directed by a general agent, manager. independent agent or company manager.


A person licensed by a state insurance department who solicits, negotiates or effects insurance contracts on behalf of one or more insurers.

Captive Agent

An agent who sells insurance for one company.


To insurers, a catastrophe is a single incident, or series of related incidents, causing insured property losses totaling more than $25 million. Insurance actuaries calculate the probability of catastrophic loss on a state-by-state basis, using a formula based on the total number of catastrophes in each state over a 40-year period. This catastrophe factor, calculated annually, is included in the price of insurance.


A demand made by an insured, or an insured's beneficiary, for payment of benefits provided by an insurance policy.

Condominium Owners Insurance

Though similar in personal property and liability coverage to homeowners insurance, structurally the condo owner's policy is from the "walls in" and does not cover the building itself.


The scope of protection provided under an insurance contract.


A decrease in the value of property over a period of time resulting from use, obsolescence or wear and tear.

Dwelling Policy

Though similar in personal property and structural coverage to a homeowners policy, a dwelling policy excludes liability coverage.

Emergency Measures

Those repairs or other actions taken to protect the insured and the insured's property from further loss when damaged or destroyed by a covered peril.


An attachment to an insurance policy that amends and alters the coverage provided in the policy. Also called a Rider.


Specific situations, conditions or circumstances that are listed in the insurance policy as not being covered.


Property insurance for items that are moved from location to location, covering losses wherever they occur. It is typically bought to cover jewelry, furs and other items whose full value may not be covered in standard homeowners policies.

Homeowners Insurance

A "package" policy providing coverage against property and liability perils facing homeowners.

Independent Agent

An agent who represents more than one insurer.


A formal device for reducing the chance of loss by transferring the risks of several individual entities to insurance companies.

Insurance Commissioner

The head of a state's insurance regulatory agency. Also known as the Director or the Superintendent in some states.

Insurance Fraud

Intentional lying or concealment by policyholders to obtain payment of an insurance claim that would otherwise not be paid.


The party covered by an insurance arrangement, to whom an insurer agrees to indemnify for losses, provide benefits or render services.


Individual responsibility for causing, through negligence, injury to another person or damage to another person's property. Also called Personal Liability.

Liability Insurance

Insurance that pays and renders services on behalf of a policyholder who is unintentionally, but legally responsible for bodily injury or property damage that is caused to another person and covered in the policy.

Loss of Use

See Additional Living Expense.

Market Value

The price for which something would sell under current market conditions.

Ordinance or Law Exclusion

Homeowners policies may exclude situations where repair or replacement of damaged property must be done in conformance with building codes requiring upgraded materials. A standard homeowners policy may cover only the cost of replacing or repairing with the original grade of materials. The difference in cost between the old materials and the new materials required by ordinance or law is excluded or limited, unless the homeowner has purchased additional coverage.

Package Policy

A single insurance policy that combines several coverages available separately. For example, homeowners insurance is a package policy, combining property, liability and theft coverages.


A property insurance term referring to the possible cause of loss such as a fire or a windstorm.

Personal Liability

See Liability.

Personal Property

All tangible property not classified as real property.


A written contract for insurance between the insurance company and the policyholder, stating which perils and damages are covered and which are not.


The amount of money an insurance company charges, based on a given rate, to provide the coverage described in the policy, or, simply stated, the price of insurance protection for a specified risk for a specified period of time. Typical homeowners insurance premiums are charged annually.

Property Coverages

Insurance that covers damage to or loss of the policyholder's property.


The cost of a unit of insurance as determined by insurance companies and state regulators. The rate serves as the basis for the premium.

Real Property

Land and most things attached to the land such as buildings and vegetation.


Insurance is a state-regulated business. State insurance laws are administered by insurance departments, whose job includes approval of rates and policy forms, investigation of company practices, review of annual financial statements, periodic examination of books and liquidation of insolvent insurers.

Renters Insurance

A form of homeowners insurance offering coverage for personal property and liability, but excluding real property.

Replacement Value

The cost of replacing property without deducting for depreciation.


See Endorsement.


This word has two meanings for insurers: (1) the chance of loss, such as from a peril; and (2) the person or entity that is insured by a policy.


A company representative who reviews applications for insurance coverage to ensure that they are acceptable and appropriately priced.

Additional Information