Insurance Glossary

Insurance can feel complicated.

Let us be your guide.



Actual Cash Value
The actual cash value of your home or personal property is calculated by subtracting depreciation from the replacement cost. Insuring property for its actual cash value means you receive what the item is worth at the moment of the loss, not what it costs to replace it.
Example: A roof typically needs to be replaced every twenty years. If you paid $20,000 to replace your roof ten years ago, its value today might be only half of that amount, or $10,000.

The person who investigates claims for an insurance provider, which includes assessing damaged property, interviewing witnesses, and reviewing police and hospital records.

Admitted Carrier
An admitted carrier is licensed in the state to write and sell certain types of insurance. They are backed by the state’s guaranty fund that protects policyholders if a carrier goes bankrupt.

An appraisal is a professional assessment of a property’s value. Your home, belongings, and property losses can be appraised.

Assignment of Benefits
An assignment of benefits (or AOB for short) is an agreement that gives your claims benefits to someone else.

Auto Insurance
Coverage for bodily injury or property damage that may occur through the ownership or operation of an automobile.


Boat Owners and Personal Watercraft Insurance
Coverage for damage to pleasure boats, motors, trailers, boating equipment and personal watercraft as well as bodily injury and property damage liability to others.


Catastrophic Coverage
A type of insurance that pays for damage caused by low-probability, high-cost events, such as floods, earthquakes, and hurricanes.

A request made to an insurance company asking for payment on a loss that is covered by a policy. If a claim is approved, your deductible will be subtracted from the covered amount.

Coinsurance Clause
A provision in your insurance policy that requires you to carry coverage equal to 80 percent of your home’s replacement value.

Commercial Insurance
One or more types of coverage for your business against losses from risks including theft, property damage, and lawsuits.

Commercial General Liability
Coverage to a business for bodily injury, personal injury, and property damage caused by the business’s operations, products, or injuries that occur on the business’s premises.

Condo Insurance
Homeowners insurance sold to condominium owners.

Coverage A
The ‘value’ of your home’s main structure. This includes the structure, and anything permanently attached to it, meaning the walls, floor, ceilings, etc. This is the core number used in Homeowner’s insurance, as other coverages may be a percentage of the Coverage A.

  • Note 1: Coverage A reflects how much it would cost to rebuild your house, not what you paid for the house. The purchase price also includes the land, view, other structures and access to school and services.
  • Note 2: Inflation causes wages and construction costs to go up a little but each year. It is important to make sure that you have enough insurance to cover this, so review your policy every year to make sure the Coverage A amount is sufficient. If in doubt, call your agent or an advocate at Bamboo.


Declarations Page
This is the first page of your insurance policy that lists key information about your coverage, such as policy limits and deductibles.

The amount of money, per claim, that you are responsible for covering. Deductibles only apply to approved claims. If you have a $1,000 deductible and a claim is approved for $20,000, Your insurance company will cover $19,000 of it. Some perils (like hurricanes or wind) may have their own deductibles.

The amount of value that an item loses over time. Items that depreciate are considered to have a specific length of time that they are considered useful, and will depreciate from 100% of their value when they are new, to 0% of their value when they have reached their useful age.


Earthquake Insurance
Property coverage for losses resulting from an earthquake, including that caused by volcanic eruption. Losses resulting from tsunami, flood, fire, or explosion following the earthquake are usually excluded.

Endorsement (Insurance Rider)
This is an amendment to your insurance policy that updates its information, increases coverage or limits, or reduces or excludes coverage.

Errors & Omissions
A type of professional liability insurance that protects companies, their workers, and other professionals against claims of negligence.

Excess and Surplus (E&S) Lines Insurance
Excess and surplus lines insurance (E&S insurance) can insure folks who have been denied coverage because their homes are considered high risk.


Flood Insurance
Coverage protecting against the losses resulting from a flood.

Flood Zone A
A Special Flood Hazard Area (SFHA) close to lakes, ponds and other large bodies of water. Because of its low elevation and proximity to water, flood zone A is a high-risk flood zone.

Flood Zones
An area the Federal Emergency Management Agency (FEMA) labels based on its likelihood for flooding.

Force Placed Insurance
If you have a mortgage and your home insurance policy lapses, watch out. Your lender may obtain a policy – called force-placed insurance – on your behalf.


Homeowners Insurance
Coverage for the losses and damage to an individual’s residence, furnishings, and other assets in the home. Also provides liability coverage against accidents in the home or on the property.

HO1 Policy
Named-perils insurance that provides coverage for an owner-occupied, standalone home and its contents.

HO2 Policy
A broad form home insurance policy that can cover your home and personal property against 10 named perils.

HO3 Policy
A special form home insurance policy that covers your home and other structures on an open-perils basis and your personal property on a named-perils basis.

HO4 Policy
A renters insurance policy that protects a renter’s personal property on a named perils basis and covers their personal liability.

HO5 Policy
A comprehensive form home insurance policy that covers the home, other structures, and personal property on an open-perils basis.


Identity Fraud Expense
Identity fraud insurance covers expenses related to the consequences of having your identity stolen. Some examples include attorney and tax advisor fees, credit report fees, loss of income due to absence from work while dealing with the fraud, loan re-application fees, notary fees and costs for certified mail.


Liability Coverage
Homeowner’s insurance includes coverage for liability, such as if someone is accidentally injured on your property or if you accidentally injure someone else’s property. This type of coverage generally has a dollar limit, and you can buy additional coverage if you want additional protection.


An official hold on issuing new policies or changing coverage for existing policies in response to an approaching storm or ongoing wildfires or civil unrest.


National Flood Insurance Program (NFIP)
A nationally run flood insurance provider managed by FEMA.

No Loss Statement
A statement of no loss is a signed letter that states you haven’t experienced any losses that could lead to claims.


Ordinance / Law Coverage
Ordinance or law coverage applies if you are faced with having to rebuild your home after a covered loss and are required by ordinance or law to upgrade the rebuild to meet current codes. This includes construction, electrical, and plumbing codes, among others.


A peril is a specific risk, or cause of loss, covered by an insurance policy. Most Bamboo policies offer special coverage, which covers any and all, perils except those that are specifically excluded.

Personal Insurance
The collective name for all the different types of insurance products available to cover the personal items you may own or the activities you carry out, including but not limited to your automobile (auto insurance), your home (home insurance) or your travels (travel insurance). Some products are required by law and others are optional.

Personal Reports
Also called a claim history report, a personal property report documents your 7-year loss history. It gives insurers insight into how “risky” it might be to insure your home.

Pet Insurance
veterinary health coverage providing care for a pet such as a dog in the event of its illness or accident

Professional Liability
coverage for businesses to protect against claims from their clients including but not limited to negligence, copyright infringement, or injury.

Protection Class
Put simply, a protection class is a grade given to a home based on the community’s firefighting abilities. This is used as a major factor in determining premium. If you’re close to a source of water, that can help reduce premium.


Renters Insurance
Liability coverage for the contents within a renters’ residence such as an apartment unit. Coverage does not include the structure, but may include items provided or changed by the renter.

Replacement Cost
If your policy gives you replacement cost, it means that the insurance company will pay whatever amount it needs to for replacing that item. If you bought a sofa for $1,000 ten years ago but that same sofa is now $1,500, the coverage would be for $1,500.


Temporary Living
If you are not able to live in your home because it is uninhabitable due to a fire or water event, your homeowner’s policy provides ’Loss of Use’ coverage for you to reside in a furnished house or dwelling or similar quality to your home. This may also cover you if you cannot enter your home because a mandatory evacuation order has been issued by a locality; it would not cover a voluntary or precautionary evacuation. Temporary living may also provide coverage for some restaurant meals, storage, etc. The limit on this coverage is generally a % of your Coverage A (i.e., 20%).

Note 1: Most homeowner’s policies do NOT cover earthquakes. If your house is uninhabitable because of an earthquake or flood, you cannot claim temporary living expenses under your homeowner’s policy. Rather, you would need coverage under a separate earthquake policy.


Umbrella Coverage
Additional liability protection above the specific limit set forth in your basic policy issued by the primary insurer or for known and unknown gaps in basic coverages


Wind Mitigation
The process of making your home more resistant to wind damage. This can save you a lot of money on your home insurance.

Disclaimer: This glossary represents only a brief description of terms and is not part of your policy. Insurance policy terms and conditions may apply. Coverage features and limits vary by state and may be subject to change. Some products are not available in every state. Please check with your agent and read the policy for exact details on coverage and exclusions.