Home insurance terms, explained

What these terms mean when they appear on home insurance. Each definition describes the term itself, not what to do about it.

Actual cash value: Pays replacement cost minus depreciation for age and wear, so older items are paid at less than what it costs to replace them.
Claim: A request you make to your insurance company to pay for a covered loss.
Coverage: A part of your policy that pays for a specific kind of loss, up to a limit.
Coverage A: The dwelling limit: the most your policy will pay to rebuild the main structure of your home.
Deductible: The amount you pay out of your own pocket on a claim before your insurance starts paying.
Endorsement: An add-on or change to your policy that adds, removes, or adjusts coverage. Also called a rider.
Exclusion: Something your policy specifically does not cover.
Hurricane deductible: A separate, usually percentage-based deductible that applies to hurricane damage, often larger than your standard deductible.
In force: Active and providing coverage, because the policy is current and paid.
Insured: A person or thing your policy protects.
Law and ordinance: Helps pay the extra cost of rebuilding to current building codes after a covered loss, which a basic policy may exclude.
Liability: Coverage that pays for injury or damage you are responsible for causing to someone else.
Limit: The most your policy will pay for a covered loss.
Out-of-pocket: Money you pay yourself, that your insurance does not cover.
Policyholder: The person who owns the insurance policy.
Premium: The amount you pay for your insurance, usually each month or once a year.
Replacement cost: Pays to repair or replace damaged property with new materials of like kind, without subtracting for age or wear.
Sub-limit: A smaller, separate cap inside a coverage that applies to certain items or losses.
Sublimit: A smaller, separate cap inside a coverage that applies to certain items or losses.
Underwriting: How an insurer decides whether to cover you and at what price, based on the risk.
Water backup: Coverage for water that backs up through sewers or drains, or overflows from a sump pump. It is a small add-on with its own limit, separate from flood.

Other policy types

These are general definitions. Your own policy is what governs your coverage, and the same term can be defined differently from one policy to the next. Read your own policy to see what these terms say in your document, cited to the page.