The insurance terms and definitions listed below will help you understand what you’re buying when you shop for insurance.

Cost of replacing damaged or destroyed property with comparable new property, minus depreciation and obsolescence. For example, a 10-year-old sofa will not be replaced at current full value because of a decade of depreciation.
Usually refers to liability insurance and indicates the amount of coverage that the insured has under the contract for a specific period of time, usually the contract period, no matter how many separate incidents might occur.
An evaluation of property by a person duly authorized to determine property value or damaged property value.
Coverage if an insured is legally liable for bodily injury or property damage caused by an automobile.
If an insured person is legally liable for an automobile accident, BI coverage pays for injuries/death to people involved in the accident other than the insured driver. BI also pays for legal defense costs if the insured is sued.
The termination of an insurance policy during the policy term. An insurance company can only cancel an insurance policy for reasons stated in the policy, and for those permitted under the law of the state in which the policyholder resides.
A demand made by the insured, or the insured's beneficiary, for payment of the benefits as provided by the policy.
In property insurance, requires the policyholder to carry insurance equal to a specified percentage of the value of property to receive full payment on a loss.
Covers physical damage to the insured's automobile (other than that covered under comprehensive insurance) resulting from overturning or from contact with another object.
Auto insurance coverage providing protection in the event of physical damage (other than collision) or theft of the insured car. For example, fire damage, vandalism or a cracked windshield would be covered under the comprehensive section.
Being continuously insured means the insurance coverage from an insurer or more than one insurer was in effect at all times, without a break or lapse in coverage for any reason.
Also known as an insurance coverage summary, this page is provided by your insurance company and lists the following: • Types of coverage you have elected • Limit for each coverage • Cost for each coverage • Specified vehicles or property covered by the policy • Types of coverage afforded by the policy • Other information applicable to the policy
Amount of loss that an insured pays before the insurance kicks in.
The estimated decrease in property value over time due to wear and tear, aging and other related factors.
People can be added to policies with the following types of driver status: • Rated - Actively drive vehicles on the policy • Excluded - Not allowed to drive vehicles on the policy and will not be covered under the policy in the event of an accident • Listed - Residents of the household who do not drive the vehicles on the policy (such as a roommate)
A provision or document added to a home insurance policy that changes the original coverage offered in the policy.
Items or conditions that are not covered by the general insurance contract.
Provides coverage for qualifying residents and businesses in flood prone regions through the National Flood Insurance Act, a federally subsidized flood insurance program enacted in 1968.
Pays the difference between what is owed on a vehicle, and the actual cash value at the time of a loss. This option is generally available only for new vehicles.
A garaging location is the place a vehicle is typically parked when not in use. Generally, this is the insured’s primary residence.
Insurance designed to protect business owners and operators from a wide variety of liability exposures. Exposures could include liability arising from accidents resulting from the insured's premises or operations, products sold by the insured, operations completed by the insured, and contractual liability.
A circumstance that increases the likelihood or probable severity of a loss. For example, the storing of explosives in a home basement is a hazard that increases the probability of an explosion.
Restoration to the victim of a loss by payment, repair or replacement.
This coverage would help pay to rebuild your identity if you have been a target of identity theft, subject to selected limits.
An insurance agent who typically represents more than one insurer. As such, Purkey Insurance Agency is proud to be a Trusted Choice® Partner Agency.
Automatically adjusts your home insurance policy limits to account for increases in the costs to repair property.
This coverage can be used for boats or for scheduled property, such as jewelry or antiques.
Interest in property such that loss or destruction of the property could cause a financial loss.
A representative of the insurer who seeks to determine the extent of the insurer's liability for a loss. Independent insurance adjusters are hired by insurance companies on an "as needed" basis, and might work for several insurance companies at the same time.
Occurs when a policyholder does not pay or pays less than the agreed amount for a home insurance policy premium. Often, termination of the policy results from a lapse.
Insurance that pays and renders service on behalf of an insured for loss to others arising out of his responsibility due to negligence.
Loan/Lease Payoff coverage, sometimes called "gap" coverage, pays the difference between what is owed on a vehicle and what the insurance pays if the vehicle is declared a total loss or stolen. The insured is still responsible for the Comprehensive or Collision deductible.
Expenses incurred to investigate and settle losses.
All methods taken to reduce the frequency and/or severity of losses. Some examples are avoidance of risk, risk retention, self-insuring, and other techniques that minimize the risks of a business, individual, or organization.
MedPay is an optional insurance coverage that pays for reasonable and necessary medical and funeral expenses for covered persons. These expenses must be incurred as a result of an occurrence.
Companies with no capital stock and owned by policyholders. The earnings of the company - over and above the payments of the losses, operating expenses and reserves - are the property of the policyholders.
The first person in whose name the insurance policy is issued.
Perils specifically covered on an insured property.
An insurance company's decision not to renew an insurance policy after the current term ends. Companies must appropriately notify policyholders prior to nonrenewing coverage.
Insurance for motorists who have poor driving records or have been canceled or refused insurance. The premium is generally higher than standard auto premiums due to the additional risks.
An event that results in an insured loss.
The cause of a possible loss.
Pays basic expenses for an insured and his or her family in states with no-fault auto insurance. No-fault laws generally require drivers to carry both liability insurance and personal injury protection coverage to pay for basic needs of the insured, such as medical expenses, in the event of an accident.
Insurance for individuals and families, such as private-passenger auto, homeowners and personal umbrella insurance.
All tangible property (other than land) that is either temporary or movable in some way, such as furniture, jewelry, electronics, etc.
The written contract effecting insurance. This includes all clauses, riders, endorsements, and papers attached thereto and made a part thereof. A policy is always in effect for a specific period of time, the policy term, and has a specific expiration date if not renewed.
Auto coverage for drivers who have never had an accident and who operate vehicles according to law. Drivers are not a risk for any insurance company that writes auto insurance, and no insurance company would hesitate to take them on as risk.
The price of insurance protection for a specified risk for a specified period of time.
A primary residence is the place where you will live for the majority of your policy term.
Primary use is how you mainly use your vehicle. Primary use options include to/from work, business, pleasure or farm use.
If an insured person is legally liable for an accident, PD coverage typically pays for damage to others' property resulting from the accident. PD also may pay for legal defense costs if you are sued.
Land, as well as anything permanently attached to, embedded in, or growing on it.
The automatic re-establishment of the in-force status of an insurance policy, effected by the payment of another premium.
Rental Reimbursement provides rental car coverage if you have a claim that is covered under Comprehensive or Collision coverage. Daily rental amounts are subject to the limit purchased.
The dollar amount needed to replace damaged personal property or dwelling property without deducting for depreciation. It is limited by the maximum dollar amount shown on the declarations page of the policy.
Provides services such as towing, flat tire change, locksmith service and battery jump-start. Typically this service can be elected for an additional premium if it is not already included with the insurance policy.
An SR-22 is a document sometimes required by the court that demonstrates proof of financial responsibility for persons convicted of certain traffic violations.
Auto insurance for average drivers with relatively few accidents during their lifetime.
An incorporated insurer with capital contributed by stockholders, to whom earnings are distributed as dividends on their shares.
A specified amount that is less than the maximum limits on an insurance policy. Sub-limits are sometimes noted for specified coverages or types of property.
The right of an insurer who has taken over another's loss to also take over the other person's right to pursue remedies against a third party.
A loss of sufficient size that it can be said no value is left to insured property. The term also is used to mean a loss requiring the maximum amount a policy will pay.
An association of selected independent insurance agents who aren’t bound by one insurance company, but are free to shop multiple providers to customize the best plans for their clients. Purkey Insurance Agency is a proud Trusted Choice® Agency.
Coverage for losses above the limit of an underlying policy or policies such as homeowners and auto insurance. While it applies to losses over the dollar amount in the underlying policies, terms of coverage are sometimes broader than those of underlying policies.
The process of selecting risks for insurance, classifying them ad assigning them appropriate rates. The process also includes rejection of those risks that do not qualify.
Endorsement to a personal automobile policy that covers an insured collision with a driver who does not have liability insurance, up to the selected limit.
Endorsement to a personal automobile policy that covers an insured collision with a driver who does not have sufficient liability insurance, up to the selected limit.
If driver or owner of a vehicle is legally liable for an accident but does not have insurance or does not have enough insurance, UMPD may be used to cover damage to an insured vehicle, up to the selected limits. In some states, UMPD is available as an alternative to Collision coverage.
The Vehicle Identification Number (VIN) of a vehicle is usually found on the driver's side of the dashboard, on the vehicle registration or the title. The VIN is a combination of 17 letters and numbers that can be used to identify the make, model and year of a car.
This is not flood insurance; rather, this coverage provides insurance against back-up of water from sewer or sump pumps. It is recommended for anyone with a basement.