Glossary of Renters Insurance Coverage Terms

Knowledge is power. If you’re familiar with the common industry insurance terms you’ll be better equipped to negotiate for the best renters insurance coverage.

Actual Cash Value (ACV) – Present property cash value. This is equal to the replacement cost minus depreciation.

Appraisal – An evaluation to determine the insurable value of property or to determine the amount of a loss.

Claim – A demand to recover for a loss covered by an insurance policy.

Conditions – The provisions of an insurance policy stating your rights and duties and those of the insurance company.

Coverage – A synonym for insurance, indicating specifically, how much protection the insurance provides. This may mean either the dollar amount purchased or the type of loss covered.

Deductible – The amount of money the policyholder agrees to pay toward the total amount of an insured loss before the insurance company pays.

Depreciation – The decrease in the value of property due to wear, tear and age.

Endorsement – An amendment attached to an insurance policy that adds to or changes the terms of the policy contract.

Exclusion – An event or type of loss that your insurance policy does not cover.

Liability Coverage – Insurance coverage for bodily injury and property damage.

Limit of Liability – The maximum amount of damages that you have to pay in the event of a loss.

Limits – The maximum amount of insurance that will be paid for a covered loss.

Replacement Cost on Contents – An endorsement that insures for actual replacement cost rather than actual cash value, which only covers the replace cost minus depreciation.

Rider (Endorsement) – A written form or statement that alters or restricts your insurance contract.