Insurance Glossary

Welcome to our free insurance glossary! You’ll find simple definitions to many insurance terms here. These terms cover basic kinds of insurance as well as a few additional definitions.

Car Insurance - Protects you against damage to your car or caused by your car. Collision coverage insures your automobile against physical damage resulting from a collision, while comprehensive auto insurance protects you against other types of damage such as natural disasters.

Earthquake Insurance – Special coverage for a building and its contents. Regular homeowners and business insurance policies do not cover earthquakes.

Flood Insurance – The U.S. government offers flood coverage under the National Flood Insurance Program. Licensed insurance agents administer the program. A comprehensive auto insurance policy may also cover against floods.

Fire Insurance – Protects against losses caused by fire. Homeowner’s all-peril policies often include fire coverage.

Health Insurance – Covers against loss due to sickness, physical injury and medical expenses.

Home Insurance - Covers one’s house, including personal possessions, against many perils such as theft and natural disasters. Home liability insurance covers the homeowner if someone suffers an accidental injury in the house. Flood and earthquake coverage usually are not part of a basic house insurance policy.

Life Insurance – Offers a substantial payment to designated beneficiaries upon the death of the policyholder. This is an income replacement protection.

No-Fault – This is auto insurance that pays for all injuries regardless of who is responsible for the accident. No-fault regulations vary from state to state. With no-fault protection, people receive insurance payments more quickly and litigation becomes less frequent.

Term Life Insurance – This form of life insurance works for a limited period of time (usually ten, twenty or thirty years). If you die during that period, the beneficiaries that you specify will receive a significant death benefit. On the other hand, if you survive until the policy expires, you get nothing. Term insurance is a great option for people who only need coverage for a limited time or who cannot afford whole life insurance. Term insurance gets more expensive as you grow older.

Title Insurance – This protects a property owner if someone else claims the right to own the property due to mistakes in the property title.

Whole Life Insurance – This type of life insurance stays in effect until you die, rather than a term policy that expires after a set time. The best part about whole life is that the policy never expires and you can build up cash value over time.