Understanding Your Policy

Below is a list of the most common basic coverages and terms regarding Home Insurance.


All Risk

Most, but not all, homeowner insurance policies sold are "all risk" which means they cover the largest number of causes of loss (freezing, collapse, fire, windstorm, smoke, etc.). However, there are some exclusions in all homeowner policies, including but not limited to damage caused by flood, war, neglect, and power failure.

Actual Cash Value

Actual Cash Value usually means the sum of money required at the time of the loss to repair or replace the property destroyed, less an amount for depreciation. Actual Cash Value equals the replacement cost less depreciation. Most standard home insurance policies cover the contents of your home (i.e., personal belongings) on an actual cash value basis, but it is possible to purchase replacement cost.

Additional Living Expense

Most home insurance policies provide for the necessary increase in expenses you may incur if your home is damaged by an insured event.  The coverage is generally subject to duration limits and commonly covers any expense incurred by you so that your household can maintain its normal standard of living. In some instances, this coverage may include the costs of a motel, eating in a restaurant, or storing some of your property.

Contents Insurance

In general, the contents of your home and other personal belongings owned by you or family members who live with you will be covered under the policy in an amount equal to 50% of the limit of liability carried on your dwelling. However, high valued personal property such as jewelry and cameras should be scheduled (suggest a word edit- listed) on the policy so that you are adequately protected to avoid the possibility of these items not being fully covered at the time of loss.


Depreciation is the decrease in the home's value since the time it was built because of age or wear and tear.

Earthquake Insurance

Earthquake insurance is a separate insurance policy.  For more information regarding earthquake insurance visit FEMA's page regarding earthquake insurance  https://www.fema.gov/emergency-managers/risk-management/earthquake/insurance .

Flood Insurance

Flood insurance is a separate insurance policy purchased through the National Flood Insurance Program (NFIP).  For more information regarding Flood insurance visit  https://www.floodsmart.gov/.  

Medical Payments Insurance

Regardless of who is at fault, this coverage pays reasonable expenses for others accidentally injured on the home premises or the areas immediately adjoining the property such as sidewalks or alleys. Medical Payments Coverage does not apply to your own injuries or those of family members living with you or injuries arising out of activities involving a business operating out of the home, intentional acts, or arising out of the rental of your premises.

Name Peril

Some homeowner insurance policies limit the covered causes of loss to those specifically listed or “named” in the policy.


A peril is a condition that can cause a loss. Three examples are fire, windstorm, and theft.

Personal Liability Insurance

Personal Liability Coverage protects you and all family members who live with you against a claim or lawsuit resulting from (non-auto and non-business) bodily injury or property damage to others and for which you become legally obligated to pay. Defense costs are included, but the insurance company has no duty to defend you after the limit of liability on the policy has been exhausted.

Property Damage

Property damage coverage helps pay for damage to your home and personal property caused by such perils as fire, lightning, windstorm, or hail. 

Replacement Cost

Replacement Cost is the amount necessary to replace or rebuild your home or repair damages with materials of similar kind and quality without deducting for depreciation.


Is there a term we didn't cover or need more information regarding a specific type of insurance?  Below are some links to our partners and links to their glossary of terms.  

FEMA - Disaster Assistance

National Association of Insurance Commissioners (NAIC)- Glossary of Insurance Terms 

National Flood Insurance Program (NFIP) 

Understanding Insurance Terms and Different Types of Policies - Home Insurance