Insurance 101

Below is a common list of insurance terminology to help guide you with your insurance needs.



The abdication of insured property into the hands of another, or into the possession of no one in particular.


An unplanned, unforeseen event which occurs suddenly and at a specific place.

Actual cash value (ACV)

The value of any property that is lost or damaged at the time of the loss, in contrast to Replacement Cost (RC). See depreciation.

Additional coverage

a provision in an insurance policy that allows for more coverage for specific loss expenses without an increase in premium.

Additional insured

Any person or party besides the policyholder who is added to a policy, so that they will also be covered by that policy.

Additional living expense (property)

Coverage that provides a specified amount per day for additional expenses in the event that you cannot live in your insured residence.

After-market parts

Parts made by a company other than the manufacturer of the auto. See original equipment manufacturer.


An individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of an insurer.

Agreed value policy

Coverage that will pay the full insured amount of the vehicle or other property in case of a covered total loss, in contrast to stated amount.

Antique automobile

A private passenger automobile that is 25 years old or older and has been restored, maintained or preserved by antique automobile hobbyists. Antique, vintage and classic automobiles can be covered with classic car insurance.


An estimate of property value, or of the extent of property damage, provided by an authorized person. Appraisals are performed to determine the value of property at the time of a loss.


Intentional and malicious burning of property.


a land motor vehicle, trailer, or semi-trailed designed for use on public roads, including attached machinery or equipment.



The person who receives the proceeds from the insurance policy.

Bodily injury liability coverage

Coverage for damages resulting in bodily injury or death sustained by others, including covered medical costs, that you become legally responsible for because of a covered auto accident.

Brand New Belongings (also called extended replacement cost)

Homeowners’ coverage that helps replace or repair personal property without depreciation being taken from the value of the property.

Building / additions / alterations coverage (tenant/condo only)

Pays for damages to additions, alterations, fixtures, improvements or installations that you make to your rented residence or condo.


The forced entry into another’s premises with felonious intent.



Terminating an insurance contract before the specified end-date listed in the policy.

Casualty Insurance

A type of insurance that covers losses caused by injury of persons or damage to the property of others.


Request by a policyholder or third party from an insurance company for compensation of losses covered by insurance.


A person requesting an amount for covered losses from the insurer.

Classic automobile

A rare or historic private passenger automobile that is 10 years old or older (age may vary by state) and has been restored, maintained or preserved by classic automobile hobbyists. These types of cars are covered by classic car insurance.

Classic car insurance

A type of automobile insurance designed to provide specialized coverage for classic and antique vehicles that meet certain qualifications.

Coastal area

A location near a body of water, including (but not limited to) an ocean, gulf, bay, harbor, inlet, sound, bayou or water that surrounds a barrier island.

Collision coverage

Coverage for damage to your vehicle resulting from collision with another vehicle or object (subject to deductible).

Comprehensive coverage (also known as Other than Collision Coverage)

Coverage for damage to your vehicle not caused by collision or upset (subject to deductible).
– Examples may include theft, vandalism, weather events and contact with animals.


Portion(s) of an insurance policy that explains duties and responsibilities of the insured and the insurer.

Condominium owners policy

Insurance that protects the condominium and personal property of the policyholder and covers the condo owner’s personal liability for covered injuries or damage to others.

Construction type

Refers to the construction of a building, such as your residence. For example, frame or masonry.

Continuous insurance

When a policyholder has been insured by one or more insurance companies, without any lapse in coverage, for a specified period of time.

Credit based insurance score

A number representing the likelihood of loss, assigned to insurance applicants, based on credit history. Like most insurers, Valley Ag Insurance Inc. uses a credit-based insurance score to predict insurance losses. Studies show that considering a person’s credit behavior can help in predicting potential losses more accurately. By taking this into account, Valley Ag Insurance Inc. can provide a more appropriate rate for each customer. About half of our existing customers receive a rate decrease based on their good credit scores.

Credit card, forgery and counterfeit money coverage

Coverage that pays for the legal obligation of an insured to pay because of theft or unauthorized use of credit cards (including Electronic Funds Transfer cards) issued to or registered in an insured’s name. This coverage also applies to forged checks and counterfeit money, but does not provide identity theft coverage.


Any after-market add-ons or accessories installed on a vehicle, such as chrome rims, ground effects body kits and off-road lights. (Customization does not include engine performance accessories or modifications.)


Declarations page

A page in your policy – usually the front page – with basic information that identifies the policyholder, the property or vehicles covered, the coverages and the premium amounts. In informal conversation, you may hear it referred to as the “dec[k]” page.


The amount a policyholder agrees to pay before the insurance company covers a loss. In addition to the standard deductible, there can be different deductibles for different types of losses such as wind, hail, hurricane, earthquake, all-peril, collision and comprehensive.


A decrease in the value of property due to wear, age or other cause. Compare actual cash value.

Dwelling fire policy

Coverage offered for property that is, at least partially, rented out to others.

Dwelling replacement cost plus/guarantee

An optional coverage that can provide additional protection above the amount a home is insured for. It is designed to protect against unforeseen increases in the cost of repairs.\



A statement added to an insurance policy that alters, deletes or adds coverage, terms or provisions of the policy.


A provision in an insurance policy that excludes and/or limits certain coverages.



A legal document filed if you are convicted of certain traffic violations or driving under the influence of alcohol or drugs. The state may require you to file an FR-44/SR-22 to verify that you maintain auto liability coverage. Both forms are official documents showing proof of financial responsibility, but use different titles based on your state of residence. If an FR-44/SR-22 should expire or be canceled, an insurance company will issue an FR-46/SR-26 form, which certifies the cancellation of the policy.


Garaging location

The address where a vehicle is usually parked or garaged, which could differ from the policyholder’s primary residence or policy mailing address.  Students attending school 100+ miles from home with a vehicle should use their school address as their garaging address.

Gated community

A housing community with controlled entry access.



Industry leader in classic car insurance that Valley Ag Insurance Inc. has partnered with to provide premier coverage for classic, vintage and antique vehicles.


A condition that creates or increases the chance that a loss will occur. For example, a wood-burning stove may increase the chance of a loss from a fire.

Homeowners insurance policy

Insurance that protects the dwelling and personal property of the policyholder and covers the homeowner’s personal liability for covered injuries or damage to others.

Hurricane/named storm deductible

Depending on the state of residence, if a policy includes coverage for wind and hail, a separate deductible for insuring damages caused by a hurricane or named storm may be required. Special terms, conditions and deductibles may apply in certain states.


Identity theft coverage

Identity theft coverage pays for expenses as a direct result of any identity theft or fraud discovered during the policy period.


The act of compensating for a loss.

Insurable interest

A consideration of value that is insured under a policy. A person with insurable interest will suffer a genuine hardship if a loss should occur to the person or property they’ve insured. For instance, people have an insurable interest in their own lives and property, but generally do not have insurable interest in their neighbor’s life or property. Insurable interest must be present in order for an insurance contract to be legal and valid.


The person(s) or parties who are insured or protected by an insurance policy.


The company that provides insurance coverage and services on a policy.


Kit Car

A type of automobile that is typically sold and made up of separate components that are assembled by the buyer. Kit cars usually require specialized car insurance.



A period of time when someone goes without insurance coverage.


A contract granting use or occupation of property during a specified period, in exchange for a specified rent.


An individual who possesses or has use of property through a lease.


An individual to whom a lease is granted.

Liability coverage

Coverage for bodily injury or property damage to others for which you are held liable (as provided by your policy and state law).


A creditor’s claim against an owner’s assets to secure an unpaid debt.

Lien holder

Any party who has a claim on property until the satisfaction of some debt or duty. For example, a bank is the lien holder of a car until the car loan is paid off by the owner.

Limits of insurance

The amount an insurance company will pay for a covered loss, as stated in the policy.


Direct and accidental damage to an insured property or automobile, which is the basis for filing a claim.

Loss assessment coverage

Coverage providing reimbursement for extra fees assessed by a condominium or homeowners association. It is subject to a deductible and the limit stated in the policy.

Loss history

A history of a person’s automobile or property losses.

Loss of use (property)

Coverage that pays additional expenses when a policyholder has to move out of their residence while repairs are made, as a result of damage caused by a covered loss.


Malicious mischief

Deliberate damage or destruction of another person’s property. For insurance purposes, it is typically covered under vandalism.

Market value

The value of property in terms of what it can be sold for in the open market.

Medical payments (auto)

Coverage for reasonable medical expenses to you and others in the event of an accident, regardless of who is at fault. In your policy, this may be referred to as medical expenses or medical benefits.

Medical payments to others (property)

This coverage may provide payment for medical expenses resulting from an accident on your property. “Med pay” is intended for the immediate medical treatment of guests on your premises, without determining fault. This coverage is subject to specific dollar limits per incident, and availability may vary.


False or misleading statements.


Steps taken to prevent or reduce the amount or likelihood of loss.

Motor vehicle report (MVR)

The record of a person’s driving history, including details of any accidents or violations, as reported to a state’s department of motor vehicles.

Multi-Peril Crop Insurance (MPCI)

Multiple-peril crop insurance (MPCI) protects farmers against losses caused by weather and other unavoidable perils for more than 100 crops across the country.


Named insured

The person or entity specifically identified as the named insured in an insurance policy. This person is also referred to as the policyholder.

Named non-owner coverage/policy (NNO)

Written for someone who does not own a private passenger or commercial automobile, but would otherwise meet the qualifications for an auto policy with Nationwide. Situations may include employer-furnished vehicles, borrowing cars from friends or relatives, or frequent use of rental cars.

Named perils

Covered hazards that are listed in an insurance policy. Also known as specified or named perils.

Non-standard carrier

An auto insurance provider with underwriting standards that accept high-risk drivers.


Occasional driver

A driver who is not the usual or most frequent driver of the vehicle listed on an auto policy.


Number of people living in the property.

Ordinance or law coverage

Coverage providing increased cost to a covered loss resulting from an ordinance or law.

Original equipment manufacturer (OEM)

Auto parts that come from the manufacturer, as opposed to aftermarket or salvage companies. An OEM endorsement ensures that aftermarket replacement parts won’t be used to repair your vehicle. Policyholders must have comprehensive and/or collision coverage to add this option. See after-market parts.

Other structure

A structure located on the residence premises that is not directly attached to the dwelling structure, such as a detached garage or gazebo. It may be insured under a homeowners policy.


Personal effects (RV insurance)

Optional coverage to fix or replace personal property inside your RV that has been lost or damaged.

Personal injury (Homeowners insurance)

Provides coverage for the personal injury to others, such as false arrest, libel (written), slander (verbal), or invasion of privacy.

Personal injury protection (auto)

Coverage for medical expenses to or for an insured in the event of an accident, regardless of who is at fault. May also pay for funeral costs, lost wages and costs for household services. Also known as no-fault. Coverage varies from state to state.

Personal property

All other property not classified as real property, and which is easily moved. This includes furniture, clothing and household goods.

Personal Umbrella Policy

An extra layer of liability protection for your assets if there’s a serious auto accident or accident on your property and damages exceed the limits of your auto or homeowners coverage limits.

Physical damage

Visual damage to a policyholder’s residential property or vehicle.


A written contract of insurance.


The person or entity specifically identified as the named insured in an insurance policy. This person is also referred to as the named insured.


The amount of money an insurance company charges in return for providing coverage.

Primary driver

The person who drives the vehicle most often. Also referred to as the principal driver.

Primary use (auto)

This is the vehicle’s typical use. “Work” refers to a vehicle that is primarily used for commuting to and from work or school. “Pleasure” refers to a vehicle primarily used for personal errands, trips or vacations.


Anything that has value. There are two types: real property and personal property.

Property damage liability coverage (auto)

Coverage for damage to someone else’s property as the result of a covered accident for which you are responsible. It may help cover the expense of repairing or replacing a car, fence or other property damaged during the covered incident.

Property fire wall

A physical wall with qualities of fire resistance and structural stability. It controls the spread of a fire.

Protective devices

Safety equipment designed to prevent, protect or notify you in the event of an emergency, such as fire extinguishers, dead-bolt locks, fire alarms, smoke alarms and burglar alarms.


Real property

Land and the permanent things on it, such as buildings, outdoor fixtures, machinery and equipment.

Rental reimbursement (auto)

Coverage that helps pay for alternative transportation (such as bus, subway or another car) if your car cannot be driven due to a covered loss. In your policy, this also may be referred to as Loss of Use, transportation expense or rental car expense.

Renters Policy (also known as Tenants Policy)

An insurance policy that covers a tenant and some of their personal possessions.

Replacement cost (RC)

The actual cost of replacing damaged or destroyed property with new property, in contrast to Actual Cash Value (ACV).

Residence premises

The physical location of the property for which insurance protection is provided. This is also known as the insured location.

Roadside Assistance

Optional coverage for when you need a tow, run out of gas or have a flat tire. Learn more.


Theft during which force is used or threatened.


Scheduled Personal Property

Additional optional insurance coverage for high-value appraised personal property that can be added to a homeowners, renters or condo policy.  This can include jewelry, furs, or cameras.

Specialty Auto Insurance (also known as Powersports)

Coverage available for other vehicles you own that are not automobiles, such as motorcycles, recreational vehicles, boats, snowmobiles, and all-terrain vehicles.


A legal document filed if you are convicted of certain traffic violations or driving under the influence of alcohol or drugs. The state may require you to file an SR-22/FR-44 to verify that you maintain auto liability coverage. Both forms are official documents showing proof of financial responsibility, but use different titles based on your state of residence. If an SR-22/FR-44 should expire or be canceled, an insurance company will issue an SR-26/FR-46 form, which certifies the cancellation of the policy.

Supplemental heating device

A fuel-burning appliance used as secondary heating source. Includes wood, coal and pellet stoves, cook stoves, freestanding stoves, freestanding fireplaces and fireplaces with inserts. To be insured, all units must have a separate flue, instead of sharing the flue of the primary heat source. A small, portable space heating unit is not considered a supplemental heating device.



A legal document or certificate showing ownership of a vehicle.


Uninsured and/or underinsured bodily injury coverage

Coverage which may protect against drivers without insurance, and/or drivers with insufficient policy limits to reimburse you for damages they caused. This coverage typically pays the difference between the amount recovered from the other driver and the amount of the damages, up to the limit of the policy.

Uninsured or underinsured motorists property damage

Coverage for damage to your vehicle resulting from a covered accident that you are legally entitled to receive from a driver who is not insured, or whose insurance limits are not enough to reimburse you for damages they caused. This type of coverage varies from state to state.


Vehicle identification number (VIN)

Your vehicle’s unique 17-character VIN can be found on the dashboard and driver’s side door jamb. This unique serial number is also included on your vehicle’s registration form and insurance card.

Valuables Plus®

Coverage available from Valley Ag Insurance Inc. for property that is mobile in nature and may be of high value, such as jewelry, sports equipment, fine arts, antiques, or coin or stamp collections.

Valley Ag Insurance Inc.

Full service insurance agency based out of Fresno, CA.


Water backup of sewers or drains coverage

Optional coverage for loss due to water backup through sewers or drains.

Wind/hurricane deductible

A separate deductible that applies only to covered wind or hurricane losses.

Windstorm or hail coverage

Coverage for losses as a result of windstorm or hail. This coverage may be subject to special terms, conditions and deductibles. On some policies, these perils may be excluded entirely.