Understanding basic home insurance terminology is imperative as a first-time home buyer.
Below, we detail the most commonly used home insurance terminology and their definitions for your understanding.
Need help understanding your home insurance policy? Contact our team today.
Basic Home Insurance Terms
Insurance jargon is complicated, which is why we’re here to help. Take a look at some of the most common homeowners insurance terms used by our agents every day:
- Additional living expenses: This covers expenses above your usual living expenses. For example, if you have to stay in a hotel because you can’t live in your home due to damages, additional living expenses coverage will help with that.
- Catastrophe: A disaster, such as a tornado, that impacts a specific area and results in significant damage.
- Flood insurance: Your standard homeowner policy will not provide coverage for flooding, so flood insurance has to be purchased separately.
- Real property: This includes land and and most things attached to the land, such as buildings and vegetation.
- Home contents: Think of furniture, appliances, and other items inside your home that aren’t fixed to the structure.
- Ordinance or law exclusion: Homeowners policies may exclude situations where repair/replacement of damaged property must conform with building codes requiring upgraded materials. A typical homeowners policy may only cover the cost of replacing or repairing with the original grade of materials. The difference of cost between the old materials and the new materials is excluded or limited. required by ordinance or law, unless the homeowner purchases additional coverage.
- Package policy: A single insurance policy that combines several coverages available separately. For example, home insurance is a package policy, combining property, liability and theft coverages.
- Peril: This is a specifically defined risk such as hail, flooding, wind, and more.
- Scheduled personal property: If you have high-value items such as expensive jewelry that exceed the limits of your policy, or are excluded, this is a separate coverage that will help protect those items.
Need help understanding your home insurance policy? Contact our team today.
Need More Help Understanding Insurance Terms? Contact Us Today!
There are many terms specific to homeowners insurance. However, understanding these common ones will give you a head start in updating or changing your policy.
Contact our team of home insurance experts today; we look forward to helping you protect those who matter most.
