Home Inventory & Insurance Glossary
Understanding insurance and home inventory terms helps you make better decisions and get the most from your coverage. Browse our comprehensive glossary below.
A
Act of God
A natural disaster or event that is unpreventable and not caused by human action.
Actual Cash Value (ACV)
The replacement cost of an item minus depreciation at the time of loss.
Additional Living Expenses (ALE)
Coverage for extra costs when you can't live in your home due to a covered loss.
Air Handler
The indoor unit of an HVAC system that circulates air throughout your home via ductwork.
Amortization
The process of paying off a loan through regular payments that cover both principal and interest.
Appraisal
A professional assessment of an item's value by a qualified expert.
Arbitration
A private dispute resolution process where a neutral third party makes a binding decision.
Assignment of Benefits (AOB)
A document transferring your insurance claim rights to a third party, like a contractor.
B
C
C.L.U.E. Report
A database report showing your insurance claims history that insurers use to evaluate risk and set premiums.
Chain of Title
The complete history of a property's ownership from the original owner to the present.
Circuit Breaker
A safety switch that automatically interrupts electrical flow when a circuit is overloaded.
Claim
A formal request to your insurance company for payment based on your policy coverage.
Closing Costs
Fees and expenses paid when completing a real estate transaction, beyond the property price.
Coinsurance
A policy requirement to insure your property for a minimum percentage of its value, or face reduced claim payments.
Condenser
The outdoor unit of an air conditioning or heat pump system that releases heat outside.
Coverage Cap
The maximum amount a home warranty or insurance policy will pay for a specific item or claim.
Covered Perils
The specific risks or events that your insurance policy protects against.
D
Declaration Page
The summary page of your insurance policy showing your coverage limits, deductibles, and premium.
Deductible
The amount you pay out of pocket before your insurance coverage kicks in.
Deed
A legal document that transfers ownership of real property from one party to another.
Depreciation
The decrease in an item's value over time due to age, wear, and obsolescence.
Dwelling Coverage
Insurance that protects the physical structure of your home against covered perils.
E
Earnest Money
A deposit made by a buyer to demonstrate serious intent to purchase a property.
Electrical Panel
The main distribution point where electricity enters your home and is divided into individual circuits.
Emergency Alert System (EAS)
A national public warning system that delivers emergency alerts through broadcast media.
Emergency Contact Card
A portable card listing important contacts, medical information, and meeting places for emergencies.
Endorsement
An addition or modification to your insurance policy that changes its coverage.
Equity
The portion of your property's value that you actually own—market value minus what you owe.
Escrow
A third-party account that holds funds during a real estate transaction or for ongoing property expenses.
Evacuation Order
An official directive from authorities requiring residents to leave a specific area due to imminent danger.
Evaporator Coil
The indoor coil that absorbs heat from your home's air to provide cooling.
Exclusions
Specific situations, perils, or types of property that your insurance policy does not cover.
F
Flash Flood
A rapid flooding event occurring within hours of heavy rainfall or other water release.
Flood Insurance
Separate insurance policy covering damage from flooding, not included in standard homeowner's policies.
Furnace
A heating system that warms air and distributes it throughout your home via ductwork.
H
Heat Pump
An HVAC system that can both heat and cool your home by transferring heat between indoors and outdoors.
HOA (Homeowners Association)
An organization that manages a community, enforces rules, and collects fees from homeowners.
Home Inventory
A comprehensive list of your personal belongings with details and documentation.
Home Warranty
A service contract that covers repair or replacement of home systems and appliances due to normal wear.
Homeowner's Insurance
Insurance that protects your home, belongings, and liability as a homeowner.
HVAC
Heating, Ventilation, and Air Conditioning—your home's climate control system.
I
Indemnification
A contractual agreement where one party agrees to compensate another for certain losses or damages.
Insurance Adjuster
A professional who investigates insurance claims and determines how much the insurer should pay.
Insurance Binder
A temporary, legally binding document providing proof of insurance coverage until the formal policy is issued.
L
M
Main Shutoff Valve
The master valve that controls all water flow into your home.
Mechanical Failure
When a home system or appliance stops working due to normal wear and tear, not external damage.
Mediation
A voluntary dispute resolution process where a neutral mediator helps parties reach their own agreement.
Medical Payments Coverage
Coverage that pays for minor medical expenses when guests are injured on your property, regardless of fault.
Mortgage
A loan used to purchase real estate, where the property serves as collateral.
O
Open Perils Policy
An insurance policy that covers all risks except those specifically excluded in the policy.
Ordinance or Law Coverage
Coverage for additional costs to bring your home up to current building codes after a covered loss.
Other Structures Coverage
Insurance protecting detached buildings on your property like garages, sheds, and fences.
P
P-Trap
The curved pipe section under sinks that holds water to prevent sewer gases from entering your home.
Personal Property Coverage
Insurance that protects your belongings inside your home against covered perils.
Policy Limits
The maximum amount your insurance will pay for a covered claim.
Premium
The amount you pay for insurance coverage, typically monthly or annually.
Preventive Maintenance
Regular, planned maintenance to prevent equipment failures and extend lifespan.
Proof of Loss
A formal, sworn statement documenting the details and value of your insurance claim.
Proof of Ownership
Documentation that demonstrates you owned an item, essential for insurance claims.
Public Adjuster
A licensed professional who represents policyholders in insurance claims.
R
S
Scheduled Personal Property
Additional coverage for specific high-value items listed individually on your policy.
SEER Rating
Seasonal Energy Efficiency Ratio—a measure of an air conditioner's cooling efficiency.
Serial Number
A unique identifier assigned to individual products by manufacturers.
Service Call Fee
The out-of-pocket cost you pay each time a home warranty company sends a technician.
Settlement
The final payment amount agreed upon between you and your insurance company to resolve a claim.
Shelter in Place
An emergency instruction to remain indoors and take protective measures during a threat.
Statute of Limitations
The legal deadline for filing a lawsuit or insurance claim after an event occurs.
Storm Surge
An abnormal rise in sea level caused by a storm, pushing water onto normally dry land.
Subrogation
Your insurer's right to pursue a third party who caused your loss to recover what they paid you.
Sump Pump
A pump that removes water that collects in a basement sump pit to prevent flooding.
T
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