Terms and Definitions
Browse our glossary of insurance terms and definitions to give you the knowledge and to better understand your policy and other important information about all types of insurance.
Insurance
A contract in which a policyholder pays a set amount to an insurance company for protection against specified losses or perils.
Insurance Contract
The document that is the agreement between your insurance company and you (the policyholder) detailing the terms and conditions of your insurance coverage.
Insured
The policyholder; the person(s) protected in case of a loss or claim.
Insurer
The insurance company that provides insurance coverage and services.
Lapse
A policy that ends because you did not pay the premium amount.
Liability Coverage
Covers losses that an insured person is legally liable for due to negligence or other situations outlined in an Auto or a Homeowners insurance policy.
Limits
The maximum dollar amount of protection purchased by the policyholder for specific coverages.
Loss
The injury or damage sustained by the insured that the insurance company agrees to cover.
Loss History
The losses you have suffered, and their values, over a certain period of time.
Market Value
The current value of your home, including the price of land.
Mutual Insurance Company
An insurance company that’s owned by its policyholders — not stockholders.
Negligence
When a person doesn't exercise reasonable care in a given situation, they may be considered to be negligent. One can be negligent as a result of doing something or not doing something.