Wisconsin’s Dedicated Insurance Law Firm

Extensive Glossary of Insurance Terms for Property & Insurance Claims

At MGW Law, we understand that the world of insurance claims can often feel overwhelming, filled with complex terminology and unfamiliar concepts. That’s why we’ve compiled this extensive glossary of insurance terms – to help our neighbors in Manitowoc, WI, and throughout the state, better understand the language involved in property, auto, health, and life insurance claims, as well as the intricate details of ‘bad faith’ insurance disputes. Our goal is to empower you with knowledge.

While this glossary provides valuable information, we know that every situation is unique. If you have any additional questions about your insurance claim, or if you believe your insurer is acting in bad faith, please don’t hesitate to call us directly at 920-383-3911 or fill out our convenient online contact form for a personalized consultation.

Accidental Death And Dismemberment (AD&D) Insurance: A type of insurance that pays a benefit to the policyholder or their beneficiary in the event of accidental death or the loss of a limb, sight, or hearing due due to an accident.
Actuarial: Pertaining to the statistical and mathematical methods used to calculate insurance risks and premiums. Actuaries analyze data to predict the likelihood of events.
Actual Cash Value (ACV): The value of damaged or stolen property at the time of loss, considering depreciation for age and wear. This is often calculated as replacement cost minus depreciation.
Adhesion Contract: A contract where one party (the insurer) has all the bargaining power and drafts the contract, while the other party (the policyholder) has little or no ability to negotiate terms. Courts often interpret ambiguities in such contracts in favor of the policyholder.
Additional Living Expenses (ALE): Also known as Loss of Use coverage, this part of a homeowner’s policy covers the increased costs of living (e.g., hotel stays, restaurant meals) if your home becomes uninhabitable due to a covered loss.
Adjuster (Insurance Adjuster): A person employed by an insurance company to investigate claims, assess damages, and recommend settlement amounts. They represent the insurance company’s interests.
Admitted Carrier: An insurance company that is licensed and regulated by the state insurance department in which it operates. This contrasts with a “non-admitted” carrier.
Adverse Underwriting Decision: A decision by an insurer to decline, cancel, or refuse to renew an insurance policy, or to place an applicant in a higher-cost insurance tier.
Agent (Insurance Agent): A licensed professional who sells and services insurance policies. Agents can represent one insurance company (captive agent) or multiple companies (independent agent).
Agent of Record: The licensed insurance agent officially recognized by the insurer as the representative for a particular policyholder.
Allowed Amount (Health): The maximum amount a health insurance plan will pay for a covered health care service.
Allied Lines Coverage: Typically refers to coverage for perils often added to fire insurance policies, such as windstorm, hail, explosion, riot, and civil commotion.
Amendment (Policy Amendment): A formal change or addition to an existing insurance policy that alters its terms or coverage. It can be made at any time during the policy period.
Appraisal: A process used to resolve disputes between an insurer and policyholder regarding the amount of loss. Each party appoints an appraiser, and if they don’t agree, an umpire is chosen to make a binding decision on the value of the loss.
Appurtenant Structures: Separate structures on the insured property that are not attached to the main dwelling, such as a detached garage, shed, or fence, often covered under a separate limit in a homeowner’s policy.
Arbitrary and Capricious: A legal standard used in some bad faith cases, indicating that an insurer’s actions were without any reasonable basis or proper consideration.
Arbitration: A method of dispute resolution where a neutral third party (arbitrator) hears both sides of a dispute and makes a decision, which may or may not be legally binding, depending on the agreement.
Assignment of Benefits (AOB): An agreement that transfers the rights to an insurance claim’s proceeds from the policyholder to a third party, often a contractor, allowing them to directly bill the insurer.

Bad Faith (Insurance Bad Faith): An insurance company’s wrongful denial of a claim, unreasonable delay in paying a claim, or failure to properly investigate a claim without a reasonable basis. It implies the insurer acted maliciously or without due diligence in fulfilling its contractual obligations.
Balance Billing (Health): When a healthcare provider bills you for the difference between the provider’s charge and the allowed amount, which is generally not allowed by in-network providers.
Beneficiary (Life/AD&D): The person or entity designated to receive the benefits of a life insurance policy or AD&D policy upon the death or dismemberment of the insured.
Bind (Binder): A temporary insurance agreement that provides coverage for a specified period until a formal policy can be issued.
Breach of Contract: The failure of one party to an agreement (e.g., an insurance policy) to fulfill their obligations under that agreement. In insurance, this could be the insurer failing to pay a valid claim or the policyholder failing to meet policy conditions.
Business Interruption Insurance (Business Income Coverage): Coverage that replaces lost income and covers extra expenses when a business must temporarily close or suspend operations due to direct physical loss or damage from a covered peril.

Cancellation: The termination of an insurance policy by either the insurer or the policyholder before its natural expiration date. Reasons for cancellation vary and are typically outlined in the policy.
Carrier (Insurance Carrier): Another term for the insurance company that provides the insurance coverage.
Catastrophe (CAT) Claim: A claim resulting from a large-scale event, such as a hurricane, earthquake, or widespread severe weather, that causes extensive damage and affects a significant number of policyholders. Insurers often deploy special CAT teams to handle these.
Cause and Origin Investigation: A specialized forensic investigation to determine how and why a fire started, crucial for fire damage claims.
Certificate of Insurance: A document issued by an insurer that provides evidence of insurance coverage, often used to show proof of liability coverage to a third party (e.g., a contractor needing to show a client they have insurance).
Civil Remedy Notice (CRN): In some states (e.g., Florida), a formal notice that a policyholder or their attorney must file with the Department of Financial Services (or equivalent regulatory body) as a prerequisite to filing a bad faith lawsuit against an insurer. It serves as a final opportunity for the insurer to cure the alleged breach.
Claim (Insurance Claim): A formal request made by a policyholder to their insurance company for payment or reimbursement for a loss covered by their policy.
Claim Adjuster (see Adjuster):
Claim Denial: The insurance company’s refusal to pay a claim, often due to the loss not being covered by the policy, lack of proper documentation, or policy exclusions.
Claim Reserve: An amount of money set aside by an insurance company to cover potential future payments on reported claims.
Claims-Made Policy: A type of liability policy that only covers claims reported to the insurer during the policy period, regardless of when the actual incident occurred. (More common in professional liability, but good to know for context).
Co-insurance (Property): A provision in some property insurance policies that requires the policyholder to insure their property for a certain percentage (e.g., 80%) of its value. If they insure for less, they may only receive a partial payment for a loss, even for a covered peril.
Co-payment (Co-pay – Health): A fixed amount you pay for a covered health care service after you’ve paid your deductible.
Coinsurance (Health): Your share of the costs of a health care service, calculated as a percentage (e.g., 20%) of the allowed amount for the service after you’ve paid your deductible.
Collision Coverage (Auto): Insurance that pays for damage to your own vehicle resulting from a collision with another vehicle or object, regardless of who is at fault.
Commercial General Liability (CGL): A broad type of liability insurance that covers common business risks, including bodily injury and property damage that occurs on the business premises or through its operations.
Common Law Bad Faith: Bad faith claims that are based on legal precedents established by court decisions, rather than specific state statutes. Many states recognize both statutory and common law bad faith.
Compensatory Damages: Money awarded to a plaintiff to compensate for actual losses suffered, such as property damage, medical expenses, or lost wages.
Comprehensive Coverage (Auto): Insurance that pays for damage to your own vehicle caused by events other than collision, such as theft, vandalism, fire, natural disasters, or hitting an animal.
Compulsory Insurance: Any type of insurance that is required by law to be purchased. While often associated with auto insurance, some property insurance might be required by mortgage lenders.
Consequential Damages: Losses that do not flow directly and immediately from an act but from the consequences of the act. In a bad faith context, this could be financial hardship, emotional distress, or loss of business resulting from an insurer’s improper handling of a claim.
Contestable Period (Life): A period, typically two years from policy issuance, during which a life insurer can dispute the validity of the policy due to material misrepresentation or fraud in the application.
Contents Coverage (Personal Property Coverage): Insurance coverage for personal belongings and property within a structure, as opposed to the structure itself. This includes items like furniture, clothing, and electronics, and is vital for both homeowners and renters.
Coverage: The specific protection provided by an insurance policy, detailing the types of losses or perils for which the insurer will provide financial compensation.
Coverage Dispute: A disagreement between the policyholder and the insurer over whether a specific loss or damage is covered under the terms of the insurance policy. These disputes can sometimes lead to bad faith claims.
Covered Peril: A specific cause of loss that is listed and covered by the insurance policy, such as fire, wind, hail, or theft.

Death Benefit (Life): The sum of money paid by a life insurance policy to the beneficiary upon the death of the insured.
Declarations Page (Dec Page): The summary page of an insurance policy that contains key policy details, including the policyholder’s name, policy number, coverage types and limits, deductibles, premium, and policy period. It’s crucial for understanding your specific coverage.
Declaratory Judgment Action: A legal proceeding where a court is asked to determine the rights and obligations of parties under a contract (like an insurance policy) before actual damage has occurred or a claim has been fully resolved. Often used to resolve coverage disputes.
Deductible: The amount of money the policyholder must pay out-of-pocket for a covered loss before the insurance company begins to pay. It is subtracted from the total approved claim amount.
Depreciation: The decrease in value of property over time due to wear and tear, age, or obsolescence. Insurance claims often factor in depreciation when calculating Actual Cash Value.
Diminished Value (Auto/Property): The loss of market value to property even after repairs have been made, due to a past incident. This concept is often raised in auto claims after an accident.
Direct Loss: Damage to property that is a direct consequence of a covered peril, such as fire damage to a building.
Direct Physical Loss: Damage to property that results directly from a covered peril. This is a common phrase in property policies to define what triggers coverage.
Dismemberment Benefit (AD&D): A payout from an AD&D policy for the loss of specific body parts (e.g., a limb, an eye) or functions (e.g., hearing, speech) due to an accidental injury.
Double Indemnity (Life/AD&D): A provision in some life or AD&D policies that pays out twice the face value of the policy if death or dismemberment occurs due to a specific, usually accidental, cause.
Due Diligence: The care that a reasonable person or entity should take to investigate an issue or action before entering into an agreement or making a decision. In insurance, this applies to both the insurer’s duty to investigate and the policyholder’s duty to protect property.
Duty to Defend: An insurer’s obligation, under liability policies, to provide legal defense for a policyholder who is sued for a covered event, even if the claim proves to be groundless or false.
Dwelling Coverage: The portion of a homeowner’s insurance policy that covers the physical structure of the home and attached structures like garages.

Economic Damages: Financial losses that can be objectively calculated, such as medical expenses, lost wages, property repair costs, or loss of business income. These are distinct from non-economic damages.
Endorsement: An attachment or addition to an insurance policy that modifies the terms, conditions, or coverage of the original policy. It is similar to an amendment.
Estoppel: A legal principle that prevents a party from asserting a fact or claim inconsistent with a position that party previously took, especially when the other party has relied on that previous position. Can apply if an insurer’s actions or representations lead a policyholder to believe a certain coverage exists.
Estoppel Certificate: A signed statement by a party certifying for another’s benefit that certain facts are correct, often preventing future contradictory claims. Can be relevant in property transactions and insurance verification.
Ex Gratia Payment: A payment made by an insurer for which there is no legal obligation or liability. This is rare and typically made in unique circumstances as a gesture of goodwill.
Exclusions: Specific perils, properties, or situations that are expressly not covered by an insurance policy. For example, flood damage is typically excluded from standard homeowner policies.
Exclusions (Life/AD&D): Specific circumstances under which a life or AD&D policy will not pay a death or dismemberment benefit, such as death by suicide (within the contestable period), war, or dangerous activities.
Expiration Date: The date on which an insurance policy ceases to be in effect.
Explanation of Benefits (EOB – Health): A statement sent by your health insurer explaining what medical treatments and/or services were paid for on your behalf. It is not a bill.
Exposure: The potential for financial loss due to a specific risk or peril.
Extra-Contractual Damages: Damages sought in a lawsuit that go beyond the benefits provided for in the insurance contract itself. These are often sought in bad faith claims to compensate for harm caused by the insurer’s improper conduct, such as emotional distress or attorney’s fees.

Fair Market Value: The price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.
Fiduciary Duty: A legal or ethical relationship of trust between two or more parties. In insurance, some argue insurers have a limited fiduciary duty to their policyholders, especially concerning handling claims fairly.
First-Party Claim: An insurance claim filed by the policyholder (the first party) with their own insurance company for damages or losses to their property.
Force Majeure: An unexpected and unavoidable event (e.g., natural disasters, war) that may excuse a party from fulfilling a contract. While relevant in contract law, insurance policies define specific covered perils rather than relying on a general “force majeure” clause for coverage.
Forensic Investigation: The application of scientific methods and techniques to examine and determine the cause and origin of a loss (e.g., a fire, structural damage), often conducted by specialized experts.
Fraud: Intentional deception or misrepresentation made by one party to another with the intent to gain an advantage or cause a loss to the other party. Insurance fraud can be committed by policyholders (e.g., exaggerating a claim) or insurers.

General Adjuster (GA): A highly experienced adjuster who handles complex or large-loss claims, often with higher settlement authority.
Grace Period: A period of time after the premium due date during which an insurance policy remains in force, even if the premium hasn’t been paid. If payment is made within this period, coverage continues uninterrupted.

Hazard: A condition that increases the likelihood or severity of a loss. For example, frayed electrical wiring is a hazard that increases the risk of fire.
Homeowners Insurance (HO): A package policy that covers a dwelling, its contents, and liability for injuries or damages to others on the property. Various forms (e.g., HO-3, HO-5) offer different levels of coverage.
Hurricane Deductible: A separate, typically higher deductible that applies to damage caused specifically by hurricanes, often expressed as a percentage of the dwelling’s insured value. Common in coastal areas.

In-network/Out-of-network (Health): Refers to healthcare providers who have or do not have a contract with your health insurance plan to provide services at a discounted rate.
Incontestability Clause (Life): A provision in a life insurance policy stating that after a certain period (e.g., two years), the insurer cannot cancel or contest the policy for misstatements in the application, even if they are material, unless fraud was involved.
Indemnify/Indemnification: To restore an individual or entity to the financial position they were in before a loss occurred, typically through payment or repair. Insurance aims to indemnify policyholders for covered losses.
Independent Adjuster (IA): An adjuster who works on a contract basis for multiple insurance companies. They are not employees of a specific insurer but are hired to investigate claims.
Indirect Loss (Consequential Loss): A loss that is a result or consequence of a direct loss, but not the direct physical damage itself. For example, loss of rental income due to a fire rendering a property uninhabitable is an indirect loss.
Insolvency (Insurer Insolvency): The financial state of an insurance company when its assets are insufficient to cover its liabilities, potentially leading to its inability to pay claims. State guarantee funds typically step in to protect policyholders in such cases.
Insured: The person or entity covered by an insurance policy.
Insurable Interest: A financial or economic stake in the subject of an insurance policy. You must have an insurable interest in something (e.g., your home, your business) to legally insure it.
Insurer: The insurance company that provides the coverage and assumes the risk.
Interrogatories: Written questions served by one party to a lawsuit on another party, which must be answered under oath. Used in discovery to gather information relevant to the claim.
Investigation (Claim Investigation): The process undertaken by an insurance company to gather facts, evidence, and assess damages related to a claim to determine coverage and appropriate settlement.

Lapse (Life Insurance): The termination of a life insurance policy due to the policyholder’s failure to pay premiums.
Legal Standing: The capacity of a party to bring a lawsuit in court. To have standing, a party must demonstrate that they have been harmed or are directly affected by the law or action they are challenging.
Letter of Representation (LOR): A letter sent by an attorney to an insurance company notifying them that they now represent the policyholder in a claim. It instructs the insurer to direct all further communication through the attorney.
Liability Coverage: The portion of an insurance policy that protects the policyholder against claims resulting from injuries and damage to other people or their property for which the policyholder is legally responsible.
Litigation: The process of taking legal action; a lawsuit. This often occurs when a claim dispute cannot be resolved through negotiation.
Loss: The occurrence of damage or injury for which the insurance company provides coverage. It can refer to the event itself or the monetary value of the damage.
Loss Assessment Coverage (Condo/HOA): A type of coverage, often for condo or HOA owners, that helps pay for special assessments charged by the condo association or homeowners association (HOA) to cover damage to common areas that exceed the association’s master policy limits.
Loss of Use Coverage (see Additional Living Expenses):
Loss Payee: A party (e.g., a mortgage lender) designated in an insurance policy to receive payment for a loss, in addition to or instead of the primary policyholder, because they have a financial interest in the insured property.
Loss Reserves (see Claim Reserve):

Market Value (see Fair Market Value):
Master Policy (HOA/Condo Association Policy): The primary insurance policy purchased by a condominium association or homeowners association (HOA) that covers the common areas, shared structures, and often the building exteriors of the units.
Material Misrepresentation: A false statement of a material fact made by an applicant for insurance that could influence the insurer’s decision to issue a policy or the premium charged. Can lead to policy voidance.
Mediation: A non-binding dispute resolution process where a neutral third party (mediator) helps the parties involved in a dispute communicate and reach a mutually acceptable agreement. Often a required step before litigation in many insurance claim disputes.
Medical Payments (MedPay) Coverage (Auto): Auto insurance coverage that pays for reasonable medical expenses for injuries to you or your passengers resulting from an auto accident, regardless of fault.
Mitigation of Damages: The policyholder’s duty to take reasonable steps to prevent further damage to property after a loss has occurred. Failure to mitigate could reduce the claim payout.
Mold Exclusion: A common provision in property insurance policies that limits or excludes coverage for damage caused by mold, fungus, or wet rot, unless caused by a specific covered peril.
Moral Hazard: The increased risk of loss resulting from the tendency of an insured person to behave differently because they are insured. For example, less care might be taken to protect property if losses are fully covered.

Named Peril Policy: An insurance policy that only provides coverage for losses caused by the specific perils explicitly listed (named) in the policy. If a peril is not listed, it is not covered. This is in contrast to “Open Peril” policies.
Negligence: Failure to exercise the care that a reasonably prudent person would exercise in a similar situation, often leading to harm or damage. Many liability claims stem from allegations of negligence.
Non-Economic Damages: Non-monetary losses that result from an injury or harm, such as pain and suffering, emotional distress, loss of enjoyment of life, or disfigurement. Often sought in bad faith claims.
Non-Renewal: The decision by an insurance company not to renew a policy at the end of its policy period. Reasons must typically be provided and can include excessive claims or changes in risk.
Notice of Loss: The initial communication from the policyholder to the insurance company informing them of a loss that may be covered by their policy.

Occasional Insured: An individual who is covered by an insurance policy only under specific circumstances, such as a guest driver on an auto policy or a family member residing temporarily in a home.
Open Peril Policy (All-Risk Policy): An insurance policy that covers all perils except for those specifically excluded. If a peril is not listed as an exclusion, it is covered. This offers broader coverage than a “Named Peril” policy.
Ordinance or Law Coverage: An endorsement or built-in coverage in some property policies that pays for additional costs to repair or rebuild a damaged structure due to the enforcement of current building codes or ordinances that did not exist when the structure was originally built. Crucial for both residential and commercial properties.
Overhead & Profit (O&P): An allowance for a general contractor’s expenses and profit, typically added to large property damage claims involving multiple trades, recognized as a necessary cost for coordinating repairs.

Peril: The specific event that causes a loss or damage, such as a fire, lightning strike, or tornado. Policies cover listed perils or all perils except excluded ones.
Personal Injury Protection (PIP – Auto): A broader form of no-fault auto insurance coverage that pays for medical expenses, lost wages, and other damages for you and your passengers after an accident, regardless of who was at fault. Mandatory in some states.
Pipe Burst: A common cause of water damage claims, referring to damage resulting from a frozen or burst water pipe within the insured property.
Policy (Insurance Policy): The written contract between the insured and the insurer that details the terms, conditions, coverage, and exclusions of the insurance agreement.
Policy Limits: The maximum amount of money an insurance policy will pay for a covered loss or claim. There are typically per-occurrence limits and aggregate limits.
Policy Period: The duration for which an insurance policy is in effect, typically stated on the declarations page.
Policyholder: The individual or entity who owns the insurance policy and is entitled to the coverage benefits.
Premium: The amount of money paid by the policyholder to the insurance company for coverage.
Prescription Period (Statute of Limitations): The legal time limit within which a lawsuit must be filed after a particular event or cause of action arises. If a lawsuit is not filed within this period, the right to sue is lost. Crucial in bad faith cases.
Pre-suit Investigation: The period before a lawsuit is formally filed, during which an attorney gathers facts, evidence, and assesses the viability of a claim against the insurer.
Prior Authorization (Health): A requirement from your health insurance plan that you get approval from your plan before you get a service or fill a prescription in order for the service or prescription to be covered.
Privity of Contract: The relationship that exists between the parties to a contract, making the contract legally binding on them. Generally, only parties to a contract can sue to enforce it.
Proof of Loss: A formal statement, typically on a form provided by the insurer, detailing the damages or losses suffered, along with supporting documentation, required to be submitted by the policyholder to substantiate a claim.
Property Damage: Physical harm or destruction to property, including real estate and personal belongings.
Proximate Cause: The direct and immediate cause of a loss, without which the loss would not have occurred. Identifying the proximate cause is critical in determining coverage.
Public Adjuster (PA): An independent insurance claims adjuster who works exclusively for the policyholder, not the insurance company. They are licensed professionals who help policyholders navigate the claims process and negotiate settlements.

Reasonable and Customary (Health): A term used by health insurers to refer to the maximum amount that a health insurer will pay for a given service based on typical charges in a specific geographic area.
Reinstatement: The process of restoring an insurance policy that has lapsed due to non-payment or other reasons.
Release: A legal document signed by the policyholder that waives their right to further pursue a claim against the insurer once a settlement has been paid.
Replacement Cost Value (RCV): The cost to repair or replace damaged property with new property of like kind and quality, without deduction for depreciation. This offers broader coverage than Actual Cash Value.
Reservation of Rights (ROR) Letter: A formal notice from an insurance company to a policyholder stating that while the insurer is investigating a claim, it is not waiving its right to deny coverage later based on the terms, conditions, or exclusions of the policy. This is common when there’s a potential coverage issue.
Rescission: The voiding or cancellation of an insurance policy from its inception, usually due to material misrepresentation or fraud by the policyholder.
Reserves (see Claim Reserve):
Rider: An addition to an insurance policy that either expands or restricts coverage. Similar to an endorsement or amendment.
Risk: The possibility of loss or exposure to danger. Insurance is designed to manage and transfer risk.
Roof Replacement Cost (vs. ACV): Many policies may pay for roof damage at actual cash value (ACV) due to depreciation, rather than replacement cost, particularly for older roofs or certain types of damage.

Salvage: Damaged property that an insurance company takes possession of after paying a total loss claim. The insurer then attempts to sell the salvage to recover some of its loss.
Scope of Loss: A detailed estimate or report outlining the extent of damage to property and the estimated cost of repairs or replacement. Often prepared by an adjuster.
Settlement (Claim Settlement): The final agreement between the policyholder and the insurance company regarding the amount of payment for a covered loss.
Severability Clause: A provision in a contract (including insurance policies) stating that if one part of the contract is found to be invalid or unenforceable, the remaining parts of the contract will still remain valid and enforceable.
Sewer Backup Coverage: An optional endorsement for property insurance that covers damage to your home and belongings caused by water backing up through sewers or drains, or overflowing from a sump pump.
Specific Performance: A legal remedy in which a court orders a party to perform a specific act as promised in a contract, rather than awarding monetary damages. Less common in insurance but can be sought in some circumstances.
Statement of Loss (see Proof of Loss):
Statutory Bad Faith: Bad faith claims that are specifically defined and allowed by state law, often outlining particular actions or omissions by insurers that constitute bad faith and prescribing penalties.
Statutory Interest: Interest that is applied to overdue or unpaid claims as mandated by state law. Often a component of damages in successful bad faith claims.
Statute of Limitations (see Prescription Period):
Stock (Commercial Property): Refers to the raw materials, goods in process, and finished goods held by a business for sale. Covered under commercial property policies.
Storm Surge: An abnormal rise of water generated by a storm, over and above the predicted astronomical tide. This is a primary cause of flood damage in coastal areas during hurricanes and tropical storms.
Sub-Limit: A maximum amount of coverage for a specific type of loss or property, which is less than the overall policy limit. For example, there might be a sub-limit for jewelry or water backup.
Subrogation: The legal right of an insurer to pursue a third party who caused an insurance loss to the policyholder. For example, if your car is damaged by another driver, your insurer may pay your claim and then sue the at-fault driver to recover their payout.
Suit Against Company Clause: A policy provision that sets the timeframe within which a policyholder must file a lawsuit against the insurance company after a dispute or claim denial.
Sump Pump Overflow: Water damage resulting from the failure of a sump pump, which removes excess water from basements. Standard policies typically exclude this unless a specific endorsement is added.

Tenants’ Improvements and Betterments: Fixtures, alterations, installations, or additions made to a leased building by a tenant that become a permanent part of the building, covered under commercial property policies.
Third-Party Claim: A claim filed by someone other than the policyholder (the third party) against the policyholder’s liability insurance. For example, if you damage someone else’s property, they file a third-party claim against your policy.
Totaled (Vehicle): When the cost of repairing a damaged vehicle exceeds its actual cash value, or a state-defined percentage of its value, leading the insurer to declare it a total loss.
Total Loss: A situation where the cost to repair damaged property exceeds its actual cash value or a specified percentage of its value, leading the insurer to declare the property beyond economic repair.

Umpire (Appraisal Umpire): In an appraisal process, if the two appointed appraisers cannot agree on the amount of loss, an impartial umpire is selected to make a binding decision.
Underinsured Motorist (UIM) Coverage (Auto): Protects you and your passengers if you’re injured in an accident caused by a driver who has insurance, but their policy limits are insufficient to cover your damages.
Underwriting: The process by which an insurance company assesses the risk of insuring an applicant or property and determines whether to issue a policy, what coverage to offer, and at what premium.
Underwriting Guidelines: The specific rules and criteria used by an insurance company to evaluate risks, determine eligibility for coverage, and set premiums.
Unfair Claims Settlement Practices Act: State laws that define specific actions or omissions by insurance companies that constitute unfair or deceptive practices in handling insurance claims. Violations can lead to regulatory action and sometimes form the basis for bad faith claims.
Unilateral Contract: An agreement in which one party makes a promise in exchange for an act or performance by the other party. Insurance policies are considered unilateral because the insurer promises to pay in the event of a covered loss, but the policyholder is not legally obligated to pay premiums (though failure to do so will void coverage).
Uninsured Motorist (UM) Coverage (Auto): Protects you and your passengers if you’re injured in an accident caused by a driver who doesn’t have auto insurance.

Vacancy Clause: A provision in a property insurance policy that reduces or voids coverage if the property is vacant for a specified period (e.g., 60 days), as vacant properties are considered higher risk.
Valuation: The process of determining the financial worth or value of property or a loss. This can be based on Actual Cash Value, Replacement Cost Value, or Fair Market Value.
Vandalism: The deliberate destruction or damage of public or private property. Often a covered peril in property insurance policies.

Water Damage (Non-Flood): Damage caused by various sources of water, such as pipe leaks, appliance overflows, or sudden and accidental discharge, which is distinct from flood damage (which typically requires a separate flood policy).
Wear and Tear Exclusion: A standard exclusion in property policies that denies coverage for damage resulting from normal deterioration of property over time, as opposed to sudden accidental loss.

Extensive Glossary of Insurance Terms for Property & Insurance Claims

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