Renters insurance has its own vocabulary. Here’s every term you’re likely to see on a quote or policy, answered in one sentence, with links to the full explanation.
Start with the big one: What is renters insurance?
Renters insurance terms, A to Z
- Actual cash value (ACV): A payout method that subtracts depreciation, so you get what a used item was worth at the time of the loss.
- Additional insured: A person or company, sometimes a landlord, given some protection under your liability coverage. Different from an interested party.
- Additional living expenses (ALE): Another name for loss of use coverage.
- Claim: Your request for the insurer to pay for a covered loss.
- Coverage limit: The most your policy will pay for a type of loss.
- Declarations page: The summary page of your policy listing limits, deductibles and premium.
- Deductible: What you pay toward a covered property claim before insurance pays.
- Endorsement: An add-on that changes your policy, such as water backup or scheduled jewelry coverage.
- Exclusion: Something your policy specifically doesn’t cover, such as flood or earthquake.
- Floater: Another name for scheduled personal property coverage.
- HO-4: The standard insurance form for renters.
- Interested party: Someone, often a landlord, who is notified if your policy changes or is canceled but gets no coverage.
- Liability coverage: Pays if you’re legally responsible for injuring someone or damaging their property.
- Loss of use: Pays extra living costs, like a hotel, when a covered event makes your rental unlivable.
- Medical payments coverage: Pays small medical bills for injured guests regardless of fault.
- Named insured: The person (or people) listed on the policy as the policyholder.
- Named perils: A policy that covers only the causes of loss it lists.
- Open perils: A policy that covers every cause of loss except those it excludes.
- Peril: A cause of loss, such as fire, theft or windstorm.
- Personal property coverage: Pays to repair or replace your belongings after a covered loss.
- Premium: What you pay for your policy, monthly or yearly.
- Replacement cost: A payout method that pays what it costs to buy a new equivalent item.
- Scheduled personal property: Extra coverage for specific valuable items at their appraised value.
- Umbrella policy: A separate policy that adds liability coverage on top of your renters and auto policies.
- Water backup endorsement: An add-on that covers damage from sewer or drain backups, usually excluded otherwise.
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This site offers general information, not insurance or legal advice. Coverage, prices and rules vary by insurer, policy and state, so always read your own policy and ask your insurer or agent about your situation.