Additional Living Expense
Any increase in living expenses incurred by the insured, so the household can maintain its normal standard of living.

Affordability Analysis
A detailed analysis of your ability to afford the purchase of a home considering all your assets and liabilities.

Amortization Term
The time required to amortize the mortgage loan. The amortization term is expressed as a number of months. For a 20-year fixed-rate mortgage, the amortization term is 240 months.

Annual Percentage Rate (APR)
The cost of a mortgage stated as a yearly rate.

Appraisal
A survey by a Claims Representative or Claims Appraiser estimating the amount of damage to property and the cost to repair.

Appraised Value
An opinion of a property's fair market value, based on a detailed analysis of the property.

Assessed Value
The valuation placed on property by a public tax assessor for taxation purposes.

Balance Sheet
A financial statement that shows assets, liabilities, and net worth as of a specific date.

Balloon Mortgage
A mortgage that has level monthly payments that will amortize it over a stated term but that provides for a lump sum payment to be due at the end of an earlier specified term.

Basic Limits
The lowest coverage amount, as prescribed by law or the company, for which an insurance policy can be written.

Before-tax Income
Income before taxes is deducted.

Benefit
This is the amount paid by the insurance company to you or your beneficiary against any claims.

Beneficiary
The person designated to receive the claims.

Blanket Insurance Policy
Single policy that covers more than one piece of property.

Cancellation
To terminate a contract before its expiration date by either the insurance company or the policyholder.

Capital Expenditure
The cost of an improvement made to extend the useful life of a property or to add to its value.

Coinsurance
A sharing of insurance risk between the insurer and the insured. Coinsurance depends on the coverage amount of the policy and a percentage of the actual value of the property insured at the time of the loss.

Coinsurance Clause
A provision in a hazard insurance policy that states the amount of coverage that must be maintained -- as a percentage of the total value of the property – so that the insured may collect the full amount of a loss.

Credit Life Insurance
A type of insurance often bought by mortgagors because it will pay off the mortgage debt if the mortgagor dies while the policy is in force.

Deductible
The minimum amount of a claim that the policyholder has agreed to pay.

Depreciation
A decrease in the value of any type of property over time.

Effective Date
The coverage begins date on an insurance contract (policy).

Effective Gross Income
Normal annual income including overtime that is guaranteed. The income may be from one/more sources.

Endorsement
These are defined as changes made to the original auto insurance policy.

Exclusion
Part of an insurance contract that excludes certain coverage conditions.

Idemnify
Provide financial compensation for losses.

Insurance Binder
A document that states that insurance is temporarily in effect. A permanent policy must be obtained before the expiration date.

Insured Mortgage
A mortgage that is protected by the Federal Housing Administration (FHA) or by private mortgage insurance (MI). If the borrower defaults on the loan, the insurer must pay the lender the lesser of the loss incurred or the insured amount.

Insurance Score
Rankings based on credit information. This includes the ratings of the individual’s credit history.

Insurance-To-Value
Policy written in an amount approximating the value of the insured property

Internet Liability Insurance
Coverage designed to protect businesses from liabilities that arise from the conducting of business over the Internet, including copyright infringement, defamation, and violation of privacy.

Liabilities
A person's long-term and short-term financial obligations.

Liability Insurance
Insurance coverage that offers protection against claims alleging that a property owner is responsible for any bodily injury or property damage to another party.

Named Insured
The individual or organization with whom an insurance contract is made and who is specifically named as a Named Insured in the contract policy declarations.

Private Mortgage Insurance (MI)
Mortgage insurance that is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults.

Reinstatement
Returning a lapsed policy to its full value after its termination as if it was never terminated.

Replacement Cost
Coverage costs for replacing property with new material; depreciation is not taken into consideration.

Residence Employee
An employee of an insured whose duties are related to the maintenance or use of the insured residence premises.

Underwriting
A process that evaluates an applicant and their property against pre-established criteria for insurability.