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INSURANCE TERMS

Insurance terms, in plain language.

This is the one place on the site where insurance vocabulary is allowed to show up by name. Definitions are written for people, not for adjusters or auditors. If a term you ran into is missing, send it to us and we will add it.

Last reviewed: May 9, 2026 · Updated regularly as new terms are added

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Non-Renewal

A non-renewal is the insurer's decision not to continue your policy at the end of its term. It is different from a mid-term cancellation and typically requires advance written notice.

General

Non-Standard Market

The non-standard market consists of carriers that write higher-risk drivers, properties with prior claims, or unusual situations the standard market declines. Premiums are higher until the underlying risk profile improves.

General

Olive Cover

Olive Cover is the consumer brand of Olive Insurance Services, LLC, an independent property and casualty agency based in Johns Creek, Georgia. The agency works for policyholders, not for any single insurance company.

General

Open Peril (All-Risk)

An open peril policy covers all causes of loss except those specifically excluded. It provides broader protection than a named peril policy because you do not need to match your loss to a listed cause.

General

Ordinance or Law

Ordinance or law coverage pays the extra cost of rebuilding a damaged home up to current building codes when those upgrades exceed what the base policy covers. It is especially important for older homes.

Home

Other Structures

Other structures coverage pays for detached buildings on your property, such as a garage, fence, shed, or gazebo. It is typically set at around ten percent of your dwelling coverage limit.

Home

Peril

A peril is a specific cause of loss, such as fire, theft, wind, hail, or water damage. Whether a loss is covered depends on whether the peril that caused it is included in your policy.

General

Personal Injury Protection (PIP)

Personal injury protection pays medical bills and sometimes lost wages for you and your passengers regardless of who caused the accident. It is required in some states and optional in others, including Georgia.

Auto

Personal Property Coverage

Personal property coverage pays for your belongings inside the home, such as furniture, electronics, and clothing. It is usually set as a percentage of your dwelling limit and has sub-limits for categories like jewelry and electronics.

Home

Policy Limit

A policy limit is the maximum amount your insurance company will pay for a covered loss. Different coverages on the same policy can carry different limits.

General

Policy Period

A policy period is the window of time during which your insurance policy is in force, usually six or twelve months. Coverage applies only to losses that occur within this window.

General

Premium

The amount you pay to keep an insurance policy in force, usually annually or monthly. Premium varies by coverage, limits, deductibles, claims history, and carrier underwriting.

General

Property Damage Liability

Property damage liability pays for damage you cause to other people's property, most commonly their vehicle. State minimum limits are often far below the cost of a newer vehicle.

Auto

Pro Rata Cancellation

Pro rata cancellation means your refund of unearned premium is calculated proportionally to the days remaining on the policy. Most carriers use pro rata for customer-initiated cancellations on personal lines.

General

Quote

An insurance quote is an estimated price for a specific policy based on the information you provide. Quotes are valid for a limited time and can change once the carrier verifies the underlying details.

General

Reinstatement

Reinstatement is the process of putting a cancelled or lapsed insurance policy back in force, typically within 10 to 30 days of the cancellation. Reinstatement avoids a coverage lapse from showing on your record.

General

Reinsurance

Reinsurance is insurance that insurance companies buy to spread their own risk across the broader market. Rising reinsurance costs are a primary driver of consumer premium increases after major catastrophe years.

General

Renewal

A renewal continues your policy for another term. The carrier may adjust the premium or coverage terms at renewal based on claims history, market conditions, or changes to the risk.

General

Replacement Cost (RCV)

Replacement cost coverage pays what it costs to replace a damaged item with a new equivalent today, with no deduction for age or wear. It pays more than actual cash value and is the better setting on most homeowners policies.

General

Retroactive Date and Tail Coverage

On a claims-made policy, the retroactive date limits how far back the coverage applies, and tail coverage extends the reporting window after the policy ends. Both matter when switching carriers or retiring.

General

Ride-Share and Livery Exclusion

Standard personal auto policies exclude coverage when your vehicle is used to transport paying passengers. Driving for a ride-share platform without a specific endorsement can leave you unprotected during an active trip.

Auto

Service Line Coverage

Service line coverage is a homeowners endorsement that pays for damage to buried utility lines you own , water, sewer, gas, electric, internet. Often excluded from standard homeowners. Costs about 25 to 50 dollars per year.

Home

SR-22

An SR-22 is a state filing from your auto insurance carrier confirming you carry at least the state-minimum liability coverage. It is required after certain serious driving violations.

Auto

Standard Market

The standard market is the group of mainstream insurance carriers writing typical risks at competitive prices. Most drivers and homeowners with clean records qualify for standard market coverage.

General

Stated Amount

A stated amount is an agreed value used for claim settlement on classic cars, custom vehicles, or specialized equipment. On a total loss, the carrier pays the stated amount rather than a depreciated book value.

Auto

Sub-limit

A sub-limit is a specific cap on a category of coverage within a broader policy limit. Common examples: jewelry sub-limit on homeowners, cash sub-limit, mold sub-limit, business property sub-limit.

General

Subrogation

Subrogation is your insurer's right to seek reimbursement from a third party who caused your loss. If they recover money from that party, your deductible may be refunded.

General

Total Loss

A total loss is a claim where the cost to repair a damaged item exceeds its current value. The carrier pays the item's value instead of funding repairs and takes the salvage.

General

Umbrella Insurance

Umbrella insurance is extra liability coverage that sits on top of your auto and home policies. It pays when a claim exceeds the underlying policy's liability limit, typically in $1 million increments.

General

Underinsured Motorist (UIM)

Underinsured motorist coverage pays the gap when an at-fault driver has insurance but their limits are not enough to cover your total damages. It works in tandem with uninsured motorist coverage.

Auto

Underwriting

Underwriting is the insurer's process of reviewing your risk to decide whether to offer coverage and at what price. Factors like claims history, property condition, and credit score all influence the decision.

General

Uninsured Motorist (UM)

Uninsured motorist coverage pays your medical bills and lost wages when an at-fault driver has no insurance. Roughly one in eight US drivers is uninsured, making this coverage important to carry.

Auto

Wind and Hail Deductible

A wind and hail deductible applies only to wind and hail claims and is often shown as a percentage of your dwelling limit rather than a flat dollar amount. It is common in storm-prone areas.

Home

Workers Compensation and Experience Mod

Workers compensation pays medical bills and lost wages for employees injured on the job. The experience mod adjusts your premium based on your actual claims history compared to industry peers.

Business