Glossary of Terms

/Glossary of Terms

Veterinary Services – Veterinary care professional fees, hospitalization, dentistry, surgery, diagnostics, medication, nursing, specialist referral, medical devices, alternative therapies and behavioural therapies performed by a Veterinarian.

Underwriting – The process an insurance company uses to decide whether to accept or reject an application for a policy.

Unearned Premium – The insured’s remaining premium equity in his policy; that part of the policy premium that has not been “used up.”

Homeowners insurance is an insurance policy that protects you financially in the event that your home and property is damaged in a covered peril, or in the event of a covered lawsuit.

Perils that are typically covered by a standard home insurance policy include fire, wind, lightning, hail and theft. While no one plans on losing their home or possessions to any of these perils, it unfortunately happens every day. Ask yourself this: If your home was ever destroyed in a fire, for example, how would you pay to rebuild your home? That’s where your homeowners insurance comes in.

Homeowners insurance protects the investment you have made in your home by providing you with coverage for specific hazards.

But your home insurance doesn’t stop there. In the event that someone was filing a lawsuit against you for accidental damage you caused to their property, how would you pay for the costly legal fees? Standard homeowners insurance also contains liability coverage that protects you and your family against lawsuits where another party finds you liable for damage to their property or person.

Typically, a standard home insurance policy includes the following coverage:

A Dwelling
B Other Structures on Your Property
C Personal Property/Contents
D Loss of Use
E Personal Liability Protection
F Medical Payments

Actual Cash Value (ACV) – The value of your property at the time of a loss or damage. ACV may be determined as the replacement cost minus depreciation.

Accident– An unintentional, unforeseen and unexpected detrimental event.

ASPCA – The American Society for the Prevention of Cruelty to Animals® (ASPCA®) was founded in 1866 as the first humane organization in the Western Hemisphere, according to As a leading voice for animal welfare, the ASPCA’s mission is “to provide effective means for the prevention of cruelty to animals throughout the United States.” As part of this mission, the ASPCA teamed up with the Hartville Group to help pet parents afford quality veterinary care with pet insurance.

Associated Condition – Any medical problem that is directly related to and caused by a primary medical Condition. This includes any medical Condition resulting from any Treatments for the Associated Conditions such as alternative therapies, diagnostic testing, medication and prescription diets.

Veterinarian – A physician or surgeon who is licensed to practice Veterinarian medicine where that practice is located.

Underwritten – To underwrite a policy, is simply to insure against losses, totaling a specific amount. Underwriting your policy is the formal act of insuring your pet, which is accomplished by selecting or rating their specific risks for insurance.

Treatment – Veterinary care, hospitalization, dentistry, surgery, diagnostics, medication, nursing, specialist referral, medical devices, alternative therapies and behavioural therapies performed by a Veterinarian.

Pre-Existing Condition – A Condition which first occurred or showed Clinical Signs before Your Pet’s Coverage started or within the Policy waiting period. Because insurance is designed to protect you from the unexpected, most insurance will not cover any condition that is pre-existing. If your pet has a condition that neither you nor your veterinarian are aware of, then it is would not be considered a pre-existing condition.

Policy – A legal agreement with you, normally comprised of  your application, the Document of Insurance, Schedule of Maximum Benefit Amounts, the Policy Terms, Conditions and Benefits of Insurance document, plus any vouchers, riders, endorsements or other written notification from your insurance company of changes to your Coverage.

Policy documents should always be stored together in a safe place.

Maximum Payable Amount – The most a company will pay, as set out and explained in the Document of Insurance and the Schedule of Maximum Benefit Amounts.

Maximum Claimable Amount – The most You can claim for, as set out and explained in the Document of Insurance and the Schedule of Maximum Benefit Amounts. Any applicable Co-Insurance and Deductible may be applied to this amount.

Illness – Sickness, disease and any changes to a Pet’s normal healthy state.

Exclusion – A restriction from Coverage that may be temporarily, or permanently placed on a Policy.

Document of Insurance – The Policy page which identifies the Policy number, the insured, the insured. Pet, the Coverage Plan and the Period of Insurance.

Deductible –  A fixed amount that You must pay prior to receiving claim reimbursement.

Claim – After your pet receives treatment, you submit a claim to be reimbursed for covered services. To submit a claim, just fill out your claim form then fax, email, or mail it to your policy provider with a copy of  your receipts.  Your veterinarian does not need to sign the claim form.

Billing Frequency – This is the number of times you pay your premium over a plan year. With our plans, you can pay monthly, quarterly, semi-annually or annually. If you pay annually, we’ll waive the low installment fee.

Benefit Schedule – A benefit schedule is a list that sets a fixed reimbursement amount based on a diagnosis. Since it’s based on the diagnosis, a benefit schedule may not take into account all of the treatments your veterinarian actually performs. ASPCA Pet Health Insurance plans reimburse 90% of usual and customary covered charges, rather than using a benefit schedule. This allows us to consider all of the services your pet needs in calculating reimbursements.

Benefit Limits – To keep premiums lower, most types of insurance have limits on available coverage.

Medical Payments Coverage – Medical Payments Coverage, sometimes referred to as “Coverage F” or “MedPay”, helps cover medical expenses that you might be held responsible for due to an injury sustained on your premises when there is no lawsuit. Medical Payments limits vary depending on your policy but usually coverage injuries of up to $1,000 per person, per covered incident.

Incontestability – A provision that places a time limit – up to two years – on a company’s right to deny payment of a claim because of material misrepresentation on your application.

Independent Adjuster – A person who charges a fee to the insurance company to adjust the company

Insurance – A contract that provides compensation for specific losses in exchange for a periodic payment. An individual contract is known as an insurance policy, and the periodic payment is known as an insurance premium.

Insurance Binder – Written evidence that insurance is temporarily in effect until the specified expiration date. At that time a permanent policy must be obtained.

Insured – The person or firm covered by an insurance policy.

Insurer – The insurance company.

Lapse – when a policy holder fails to make payments the policy becomes null and void.

Legal Description – A property description, recognized by law, which is sufficient to locate and identify the property without oral testimony.

Liability – responsibility to compensate another for your negligence.

Liability Coverage – Home insurance coverage that protects the insured against injury or damage claims.

Liability Insurance – A policy that protects owners against claims of negligence, personal injury or property damage.

Limit of Liability – The maximum amount of damages an insurer is bound to pay in case of a loss.

Loss – The amount sought through an insurer’s claim.

Loss History – Refers to an insured’s history of losses (claims) with other companies, or the company they are currently with. A company will consider ‘loss history’ when underwriting a new policy or considering a renewal of an existing policy.

Loss of Use Coverage – Loss of use coverage, sometimes referred to as “Coverage”, provides for your living expenses in the event that you cannot live in your home due to a covered claim. This type of coverage typically covers hotel and restaurant bills and other living expenses you may incur while your home is being repaired. Coverage limits for loss of use is usually around 20% of your dwelling coverage.


Master Association – A homeowners association in a large condominium or planned unit development (PUD) project that is made up of representatives from associations covering specific areas within the project.

Material Misrepresentation – False statements by an applicant or policyholder that affect whether or not the insurer will accept the risk and issue a policy.

MedPay – MedPay coverage, short for “Medical Payment coverage”  is the section of a standard home insurance policy that will cover medical costs in the event that someone is injured on your property and does not want to sue you. When someone is injured on your property and does not want to sue you for the damages, you can use MedPay to help cover medical costs MedPay limits vary depending on your policy but usually coverage injuries of up to $1,000 per person, per covered incident.

Net Cash Value – The cash value amount available to a policy owner after adjustments have been made to the cash surrender value to account for policy loans and dividends.

Non-Renewal – The decision made by an insurance company not to renew a policy.

Other Structure Coverage – Other Structure Coverage, sometimes referred to as “Coverage”, protects structures on your property such as detached garages and sheds. The typical coverage limits for other structures is 10% of your dwelling coverage-although higher amounts may be purchased if necessary.

Paid-Up – This event occurs when a policy will not require any further premiums to keep the coverage in force.

Personal Liability Protection Coverage – Personal liability protection coverage, sometimes referred to as “Coverage”, protects you and/or covered family members against lawsuits. Coverage limits vary depending on your policy but most standard homeowners policies include a minimum of $100,000 worth of coverage.

Personal Property Coverage – Personal Property Coverage, sometimes referred to as “Coverage” or “Contents Coverage”, is included in a standard home insurance policy and protects your personal items and household contents in the event they are stolen or destroyed by fire, hurricane or other peril covered in your policy. These items may include, but are not limited to, furniture, clothing, and sports equipment. Contents coverage limits are usually 50%-70% of your dwelling coverage.

Policy Owner – The person or party who owns an individual insurance policy.

Policy Period – The period a policy is in force, from the beginning or effective date to the expiration date.

Premium – The amount paid by an insured to an insurance company to obtain or maintain an insurance policy.

Premium Expense Charges – An amount deducted from each premium payment, which reduces the amount credited to the policy.

Property Damage (PD) – destruction or loss of use of tangible property.

Property Insurance – Home Insurance coverage for your personal or real property.

Public Adjuster – A person who acts as an advocate for the policy holder in the insurance claim process.

Rated Policy – An insurance policy that is issued at a higher than standard premium to cover a person classified as a higher than average risk.

Renewal Policy – A policy issued as a renewal of an expired policy in the same company or agency, not new business.

Replacement Cost – The cost associated with replacing property at current market prices.

Return Premium – The premium returned to an insured for canceling or amending a policy.

Rider – Also known as an endorsement, a rider is an amendment to a policy used to add or delete coverage.

Staff Adjuster – Employee of the insurance company’s claim department.

Subrogation – The right of the insurance company after payment of a loss to recover from the responsible party.

Surcharge – An extra charge added to your premium by an insurance company. For home insurance, a surcharge is usually added if you have a claims history.


Third Party Loss – A situation involving a person other than the insurer and insured, i.e., a person making a liability claim against the insured.

Underwriter – A person who reviews and evaluates an application for a loan or insurance policy.

Condominium – multi-family housing where units are owned individually by private owners but common areas are the shared responsibility of all tenants.

Conditional Receipt – A premium receipt which makes the insurance effective only if or when a specified condition is met.

Company Profile – A synopsis of a company’s performance including licensing data, an A.M. Best rating, financial information and complaint history.


Common Areas – Those portions of a building, land, and amenities owned (or managed) by a planned unit development (PUD) or condominium projects homeowners’ association (or a cooperative projects cooperative corporation) that are used by all of the unit owners, who share in the common expenses of their operation and maintenance. Common areas include swimming pools, tennis courts, and other recreational facilities, as well as common corridors of buildings, parking areas, means of ingress and egress, etc.

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 — for the insured to collect the full amount of a loss.

Coinsurance – The sharing of risk between the insurer and the insured.

Claimant – A person who makes an insurance claim.

Chattel – articles of personal property.

Casualty Insurance – the type of insurance covering the legal liability for losses caused by injuries to others or property damage caused by you or other residents of your home.

Peril– refers to a specific risk or cause of loss covered by an insurance policy, such as a fire, windstorm, lightening, hail, smoke damage or theft.

Dwelling Coverage– Dwelling Coverage, sometimes referred to as “Coverage A”, protects against the damage and possible loss of your home in the event of a covered claim such as a hurricane, hailstorm, lightening strike or fire.

Adjusted basis– The cost of a property plus the value of any improvements and minus depreciation.

Adjuster – A person who investigates and settles insurance claims on the behalf of the insurer.

Agent – A licensed person who sells insurance policies.

Appreciation – An increase in the value of a property or asset caused by economic factors such as inflation or other causes. The opposite of Depreciation.


Assessed Value – The value placed on property for purposes of taxation.

Betterment – An improvement that increases the value of a property or facility.

Binder – A preliminary, temporary agreement that provides proof of insurance until the policy is official.

Blanket Insurance Policy – A single policy that covers more than one person or piece of property.

Breach – The failure to perform a promised act or obligation.

Cancellation – Voluntary termination of an insurance policy by the insurer or the insured prior to the renewal date.

Cash Value – The amount of money which the policy owner will receive as a refund if the coverage is cancelled and the policy is returned to the company. Also known as cash surrender value.

Flood Insurance– Insurance that compensates for physical property damage resulting from flooding. It is required by lenders for properties located in federally designated flood areas.