Insurance Glossary – Bridges Insurance Agency

Insurance Glossary: Definitions for Florida Policyholders

Confused by insurance jargon? You’re not alone. This glossary explains key home, auto, flood, and specialty insurance terms — clearly and simply.

Deductible (Home & Auto Insurance): The amount you must pay out of pocket before your insurance coverage begins. For example, if your deductible is $1,000 and a covered claim is $5,000, you pay $1,000 and the insurer pays $4,000.
Premium: The amount you pay for your insurance policy. Premiums can be billed monthly, quarterly, or annually.
Claim (Filing a Claim): A formal request for payment made to your insurance company when you’ve suffered a loss (e.g., accident, storm, theft).
Policyholder: The person or entity that owns the insurance policy.
Coverage Limit: The maximum amount your insurance company will pay for a covered claim.
Endorsement: An add-on or change to your policy that provides extra coverage or modifies terms.
Exclusion: Something not covered by your policy. Always review your exclusions carefully so there are no surprises during a claim.
Peril: The specific cause of a loss or damage covered by your insurance policy. Common covered perils in Florida include fire, windstorm, theft, lightning, and vandalism.
Underwriting: The process the insurance company uses to evaluate risk and decide your coverage terms and premium.
Policy Term: The length of time your insurance policy is in effect — usually 6 or 12 months.

Personal Property Coverage: Protects your belongings like furniture, electronics, and clothing inside your home.
Hurricane Deductible: A separate, often higher deductible that applies when your home is damaged by a hurricane. Usually 2–5% of the insured value of your home.
Replacement Cost vs. Actual Cash Value: Replacement cost pays to repair or replace items at today’s prices. Actual cash value deducts for depreciation. Most homeowners prefer replacement cost for fuller protection. See Homeowners Insurance Options
Loss of Use (ALE – Additional Living Expenses): Covers temporary housing, meals, and other costs if your home is uninhabitable after a covered loss.
Scheduled Personal Property: Extra coverage for high-value items like jewelry, art, or collectibles that may exceed standard policy limits.
Liability Coverage (Home): Covers injuries or property damage that you or your family members cause to others, either on or off your property.
Ordinance or Law Coverage: Pays extra costs required to bring your home up to current building codes during repairs.

Comprehensive Coverage: Covers damage to your car from non-collision events like theft, flooding, hail, fire, or vandalism. Explore Auto Insurance Options
Collision Coverage: Covers damage to your vehicle from an accident with another vehicle or object, regardless of who’s at fault.
Uninsured/Underinsured Motorist (UM/UIM): Covers you if you’re hit by someone with no insurance or too little coverage to pay for damages.
PIP (Personal Injury Protection): Required in Florida. Covers medical expenses and lost wages, regardless of who caused the accident.
Bodily Injury Liability: Covers medical bills and legal costs if you injure someone in an accident.

Flood Insurance (NFIP & Private): A separate policy that covers damage caused by rising water from outside your home. Not included in standard homeowners insurance. Ask About Flood Insurance
Flood Zone: A FEMA-designated area (e.g., Zone AE, VE, X) that determines your level of flood risk and whether flood insurance is required by lenders.
Wind Mitigation: Home improvements (like storm shutters or roof reinforcements) that reduce wind damage. May qualify you for home insurance discounts.

Personal Property Coverage: Covers your belongings inside your rental unit against covered perils like fire, theft, or water damage (not flood).
Liability Coverage: Protects you if you’re found legally responsible for someone else’s injury or property damage while in your rental.
Loss of Use: Covers temporary housing costs if your rental becomes uninhabitable due to a covered event.

Umbrella Insurance: Extra liability protection that kicks in when your auto or home liability limits are exceeded. Ideal for landlords, families with teen drivers, or high net-worth households.
Scheduled Personal Property: Additional coverage for high-value items like jewelry, art, or collectibles. Standard policies often have limits on these items.
Boat Insurance: Protects against damage, theft, liability, and injuries related to watercraft. Often required by marinas or HOAs.

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