Home, Auto & Umbrella Insurance Glossary
Neill Insurance Brokers | Roanoke, TX
Insurance is full of terms that sound simple but mean something very specific when it comes to a claim. This glossary covers every term you're likely to encounter on a home, auto, or umbrella policy in North Texas — written the way we'd explain it across a desk.
If a term isn't here or something still isn't clear, give us a call. That's what we're here for.
Actual Cash Value (ACV)
What a damaged item was worth at the time of loss — after depreciation is applied. If your 10-year-old roof costs $15,000 to replace but has depreciated 40%, an ACV settlement pays $9,000. You cover the other $6,000 yourself, plus your deductible. Compare to Replacement Cost Value.
Additional Living Expenses (ALE)
Coverage that pays for temporary housing, meals, and other costs if your home becomes uninhabitable after a covered loss. If a fire forces you out for three months, ALE covers your hotel and reasonable living costs during repairs.
All Other Perils (AOP) Deductible
The deductible that applies to every covered loss except wind and hail — fire, water damage, theft, vandalism, and most other events. On a Texas homeowners policy, this is often a flat dollar amount ($1,500–$2,500) rather than a percentage. See also: Wind and Hail Deductible.
Agreed Value
A coverage method where the insured and carrier agree on the value of the property upfront — typically used for RVs, classic cars, and high-value items. If a total loss occurs, the agreed amount is paid without a depreciation calculation.
Assignee
A third party (such as a contractor) to whom a policyholder assigns their insurance claim benefits. Assignment of benefits has been a source of insurance fraud in Texas — know what you're signing before you hand a contractor your claim rights.
Bodily Injury Liability (BI)
The portion of your auto insurance that pays for injuries you cause to other people in an accident. Texas minimum is $30,000 per person / $60,000 per accident. In a serious DFW accident, those limits can be exhausted quickly. Most financial advisors recommend $100,000/$300,000 or higher.
Broad Form
A coverage form that insures against a named list of perils — broader than basic form, narrower than open perils. Used on some older or specialty policies.
Builder's Risk
Insurance that covers a structure under construction. If you're building a home in North Texas, standard homeowners insurance doesn't apply until the home is complete and occupied. Builder's risk fills the gap.
Captive Agent
An insurance agent who represents only one company — State Farm agents sell only State Farm, Farmers agents sell only Farmers. A captive agent cannot shop the market or offer alternatives if their carrier isn't competitive for your profile. Compare to: Independent Broker.
Carrier
The insurance company that underwrites and issues your policy. Neill Insurance Brokers works with more than 40 carriers including Travelers, TWICO, Safeco, Progressive, and Mercury Insurance.
Certificate of Insurance (COI)
A document that provides proof of insurance coverage — commonly required by lenders, contractors, landlords, and HOAs. We issue COIs for our clients as needed.
Claim
A formal request to your insurance company for payment after a covered loss.
CLUE Report
Comprehensive Loss Underwriting Exchange — a claims history database used by carriers when underwriting a new policy. Your CLUE report shows prior claims on your home or vehicle. A clean CLUE report can mean lower premiums; multiple claims can affect your ability to get coverage.
Collision Coverage
The portion of auto insurance that pays to repair or replace your vehicle after an accident, regardless of fault. Required if you have a car loan or lease.
Comprehensive Coverage
Auto coverage that pays for damage to your vehicle from non-collision events — theft, hail, fire, flooding, animal strikes, falling objects. Hail is one of the most common comprehensive claims in North Texas.
Coverage Form
The structure of your policy — specifically what is and isn't covered. HO-3 and HO-5 are examples of coverage forms for homeowners. The form matters as much as the premium.
Declarations Page (Dec Page)
The summary page at the front of your insurance policy. It shows your name, property address, coverage types, coverage limits, deductibles, premium, and policy period. This is the most important page in your policy — know what's on it.
Deductible
The amount you pay out of pocket before your insurance coverage kicks in on a claim. Home insurance deductibles in Texas are often percentage-based for wind and hail — not flat dollar amounts. On a $350,000 home, a 2% deductible means $7,000 out of pocket before insurance pays anything.
Depreciation
The reduction in value of property over time due to age, wear, and use. Carriers apply depreciation when calculating Actual Cash Value (ACV) settlements. A 10-year-old roof depreciates differently than a 2-year-old roof — and the difference shows up in what you receive on a claim.
Dwelling Coverage
The portion of your homeowners policy that covers the physical structure of your home — walls, roof, foundation, built-in appliances. The coverage amount should reflect current rebuild cost, not market value. DFW construction costs have increased more than 30% since 2020 — if your dwelling coverage hasn't been updated, you may be underinsured.
Effective Date
The date your insurance coverage begins. Coverage before the effective date is not covered — this is why gaps in coverage matter.
Endorsement
An add-on to a standard insurance policy that extends or modifies coverage. Common endorsements on Texas homeowners policies include: water damage, sewer and drain backup, service line coverage, scheduled personal property, and roof replacement cost. Most base policies do not include these automatically.
Excess Liability
Coverage that provides additional liability protection beyond the limits of a standard homeowners or auto policy. A personal umbrella policy is a form of excess liability insurance.
Exclusion
A specific event, condition, or type of damage that your policy does not cover. Flood is excluded from every standard homeowners policy in Texas. Sewer backup is excluded from most base policies unless an endorsement is added. Reading exclusions is as important as reading what's covered.
First Party
You — the policyholder making a claim against your own insurance policy.
Flood Insurance
Coverage for damage caused by rising water from outside your home — storms, overflowing rivers, heavy rainfall. Flood is explicitly excluded from all standard homeowners policies and requires a separate policy through FEMA's National Flood Insurance Program (NFIP) or a private flood carrier.
Force-Placed Insurance
Insurance placed by a lender on a property when the homeowner's coverage lapses or is deemed insufficient. Force-placed policies are typically more expensive and provide less coverage than a standard policy — and are designed to protect the lender, not the homeowner.
Gap Coverage
Auto insurance that pays the difference between what your vehicle is worth (ACV) and what you still owe on your loan if your car is totaled. Critical for new vehicles where you owe more than the depreciated value.
General Liability (GL)
Coverage for bodily injury or property damage claims made against you or your business. On personal lines, the homeowners policy includes personal liability. An umbrella policy extends that limit.
HO-3
The standard homeowners policy form. Covers your dwelling on an open perils basis (everything except what's excluded) and your personal property on a named perils basis (only what's listed). The most common homeowners policy form in North Texas.
HO-5
A broader homeowners policy form that extends open perils coverage to both the dwelling AND personal property. Typically costs $200–$400/year more than HO-3. Most useful for high-value homes and households with significant personal property.
HO-6
A condo unit owner's policy. Covers your personal property, interior improvements, and personal liability. The condo association's master policy covers the building itself — HO-6 fills the gap for what the master policy doesn't cover.
Homeowners Insurance
A package policy that combines property coverage (dwelling, other structures, personal property, loss of use) with liability coverage (personal liability, medical payments to others). Required by most mortgage lenders.
Independent Broker / Independent Agent
An insurance agent who represents multiple carriers — not just one. An independent broker can shop your policy across dozens of companies and recommend the carrier that best fits your profile and price. Neill Insurance Brokers works with more than 40 carriers. Compare to: Captive Agent.
Inflation Guard
An endorsement or policy feature that automatically increases dwelling coverage limits each year to keep pace with construction cost inflation. Given that DFW construction costs rose more than 30% since 2020, this matters.
Insurable Interest
A financial stake in the property being insured. You must have an insurable interest in something to insure it — you can't insure property you don't own or have no financial exposure to.
Lapse in Coverage
A period during which you had no active insurance policy. A lapse — even a short one — can be used by carriers to increase your premium or decline coverage. Continuous coverage history is a factor in many underwriting decisions.
Liability Coverage
The portion of your insurance policy that pays for injuries or property damage you cause to others. On a homeowners policy, standard limits are $100,000–$300,000. On auto, Texas minimum is 30/60/25. An umbrella policy adds $1 million or more above those limits.
Medical Payments to Others (MedPay)
A homeowners coverage that pays for medical expenses of guests injured on your property — regardless of fault. Different from personal liability, which responds to lawsuits. MedPay limits are typically $1,000–$5,000 and cover minor incidents without requiring a liability claim.
Mortgagee
Your lender — the bank or mortgage company that has a financial interest in your home. Your homeowners policy lists your mortgagee and pays them if a covered loss affects the property they have a lien on.
Named Perils
A coverage structure in which only the specific events listed in the policy are covered. If it's not on the list, it's not covered. Personal property (contents) on an HO-3 policy is typically covered on a named perils basis.
Non-Admitted Carrier
An insurance company not licensed by the Texas Department of Insurance but legally permitted to write certain specialty or surplus lines risks. Non-admitted carriers are used for hard-to-place risks — older homes, unique construction, unusual risk profiles. They're not covered by the Texas guaranty fund if the carrier becomes insolvent.
Open Perils
A coverage structure in which everything is covered except what's specifically excluded. The dwelling on an HO-3 policy is covered on an open perils basis. More comprehensive than named perils.
Other Structures
The portion of your homeowners policy that covers structures on your property that are not attached to the main dwelling — detached garages, fences, sheds, gazebos. Typically 10% of dwelling coverage.
Personal Articles Floater
An endorsement or separate policy that covers high-value personal items — jewelry, watches, cameras, art, musical instruments, collectibles — for their full appraised value, often without a deductible. Standard homeowners policies cap jewelry coverage at $1,500–$2,500.
Personal Liability
The portion of your homeowners policy that pays for legal defense and damages if someone sues you for bodily injury or property damage caused by you or members of your household. Standard limits are $100,000–$300,000.
Personal Property
Your belongings — furniture, clothing, electronics, appliances, and everything else inside your home. Covered under homeowners insurance up to your policy's contents limit, subject to sub-limits on certain categories (jewelry, electronics, firearms).
Personal Umbrella Policy
An excess liability policy that provides $1 million or more in additional liability coverage above your homeowners and auto policy limits. Typically costs $400–$600/year for $1 million in coverage. The most cost-effective way to protect significant assets against a lawsuit.
Policy Period
The time period during which your insurance coverage is active — typically 12 months for personal lines policies.
Premium
The amount you pay for your insurance coverage — monthly, quarterly, or annually. In Neill's North Texas homeowner book, the average annual premium is $3,271. Premiums vary based on your home, location, coverage choices, deductibles, and carrier.
Replacement Cost Value (RCV)
What it actually costs to repair or replace damaged property with a new equivalent — without depreciation applied. The difference between RCV and ACV is significant at claims time. On a 15-year-old roof, RCV pays full replacement. ACV pays approximately 40% of that.
Renters Insurance
A policy that covers a renter's personal property, personal liability, and additional living expenses. Does not cover the building (that's the landlord's policy). Neill's renters clients pay an average of $19.83/month.
Scheduled Personal Property
See: Personal Articles Floater.
Service Line Coverage
An endorsement that covers the underground utility lines running between your home and the street — water, sewer, electrical, cable. These are excluded from standard homeowners policies. North Texas clay soil puts consistent stress on underground lines, making this one of the most relevant endorsements for local homeowners.
Sewer and Drain Backup Coverage
An endorsement that covers water damage caused by a backed-up municipal sewer line, failed sump pump, or reversed drain. Explicitly excluded from most standard homeowners policies. One of the most commonly missing endorsements Neill finds during policy reviews — and one of the cheapest to add ($40–$100/year).
Split Limits
How auto liability coverage is expressed — three numbers representing per-person bodily injury / per-accident bodily injury / property damage. Texas minimum is 30/60/25. Most advisors recommend 100/300/100 or higher for North Texas drivers.
Subrogation
The process by which your insurance company recovers money from the party responsible for your loss after paying your claim. When your carrier subrogates against the at-fault party, it doesn't affect your claim — but it may affect your deductible recovery.
Third Party
Someone other than you or your insurance company — typically the person making a claim against you.
Total Loss
When the cost to repair damaged property exceeds its value (or a set percentage of value). On a vehicle, a total loss triggers the ACV settlement process. On a home, it triggers the dwelling coverage settlement — ideally at replacement cost.
Umbrella Insurance
See: Personal Umbrella Policy.
Underinsured
Having coverage limits that are insufficient to cover the full cost of a loss. The most common forms of underinsurance in North Texas: dwelling coverage that hasn't kept pace with construction cost increases, ACV roof coverage on a home in a hail-prone market, and liability limits that don't reflect the family's actual asset exposure.
Underwriting
The process by which an insurance carrier evaluates risk and determines whether — and at what price — to offer coverage. Underwriting factors for homeowners insurance include roof age, construction type, prior claims, credit score, and location.
Uninsured Motorist (UM) / Underinsured Motorist (UIM) Coverage
Auto coverage that pays for your injuries and vehicle damage when the at-fault driver has no insurance (UM) or not enough insurance (UIM) to cover your losses. Texas has one of the highest rates of uninsured drivers in the country — estimated at more than 20% of all drivers. UM/UIM is one of the most important coverages on a Texas auto policy.
Wind and Hail Deductible
A separate deductible that applies specifically to wind and hail claims on Texas homeowners policies. Almost always expressed as a percentage of dwelling coverage — not a flat dollar amount. On a $350,000 home, a 2% wind/hail deductible means $7,000 out of pocket before your insurance pays anything. This is the most misunderstood number on most Texas homeowners policies.
Zone (Flood Zone)
A FEMA designation indicating the flood risk level for a specific property. Properties in high-risk flood zones (A or V zones) may be required by lenders to carry flood insurance. Even properties outside high-risk zones can experience flood events — and standard homeowners policies exclude flood regardless of zone.
How to Use This Glossary
Every term above is something you may encounter on your declarations page, in a coverage discussion, or at claims time. Understanding these terms before you need them is the difference between knowing what to expect and being surprised when it matters most.
If something here raises a question about your current policy — a free 15-minute review will give you a straight answer.
