Glossary | Shelter Insurance®


Accidental Death Benefit

This optional benefit could increase the amount payable to your beneficiary if your death is the result of an accident.

Additional Living Expenses Coverage

A coverage that will reimburse you for the reasonable increase in cost of living away from home, if your home becomes uninhabitable because of a covered loss.


An employee or independent contractor of the insurance company who investigates and settles claims on behalf of the insurance company.


The person who receives the benefits of an annuity payment.


A contract that provides you with income for your lifetime, or for a specific period of time.


The potential recipient of life insurance or annuity proceeds.


A report of a loss to an insurance company.


The person or group filing or reporting an insurance claim.

Collision Coverage

Helps fix or replace your vehicle due to an accident, whether you were at fault or not.

Comparable Value

The worth of the vehicle or part immediately before the accident. We base that determination on our knowledge of reasonable prices in the geographic area where you reside.

Comprehensive Coverage

Comprehensive coverage will help you pay to repair or replace your vehicle for most causes not covered by collision coverage. Examples include fire, flood, theft, hail damage, and falling objects.


The part of the covered loss that the insured is obligated to pay. For example, let's say you have a $100 deductible in your policy, and you suffer a covered loss that costs $500 to repair. You are obligated to pay $100 and we will cover the remaining $400. If you have a higher deductible, you will usually have a lower premium, and vice versa.


A decrease in value of property over time. Property's value decreases over time from wear and tear or it can become obsolete. For example, if you paid $500 for a new television five years ago, its current market value may only be $125.

Direct Loss

A loss that is a direct consequence of a given peril. For instance, a refrigerator damaged by a power surge during a lightning storm is a direct loss, while food that spoils in the refrigerator because it is without power is an indirect loss.


A refund of a portion of the premium paid on a participating insurance contract. Dividends are not guaranteed.

Dwelling Coverage

Dwelling coverage applies to your private residence and any building structures that are attached to it. It also covers outdoor equipment permanently attached to your home and used to service your residence and its premises.

Effective Date

The date an insurance policy or annuity goes into effect.


A form that alters the terms of a pre-printed policy and becomes part of the insurance contract.

Evidence of Insurability

Information about a person that is used to approve or reinstate a life insurance policy or rider.


A provision of an insurance policy that refers to hazards, circumstances, or property not covered by the policy.

Garaging Location

The place where you usually park your car. This is most often where you park your car when it is not in use, generally your primary residence.

Guaranteed Death Benefit

The amount of insurance coverage provided to your beneficiary when you die as long as premiums are paid when due. The amount may be reduced by outstanding loans or liens.

Guaranteed Insurability Rider

This optional rider allows you to purchase additional life insurance at certain times without providing evidence of insurability.


Party covered by an insurance policy.


Termination of a policy if you don't pay the required premium.

Liability — Bodily Injury Coverage

Pays for the injuries or the death of people involved in an accident for which the insured is legally liable. It does not cover bodily injury to the insured. Bodily injury liability coverage may also pay for legal costs in the event that you are sued.

Liability Coverage

Covers events where you are held legally responsible for bodily injury or property damage to others.

Liability — Property Damage Coverage

Pays for the cost of repairs or replacement to another person's property caused by an accident for which the insured is legally liable. It does not cover property not owned by you or a member of your household.


The highest amount that will be paid for a particular coverage for each covered loss, minus any applicable deductible. The limit is selected by you depending on your needs.

Loss Payee

A person or group that holds a financial interest in the insured auto or property and will be included in a loss payment or settlement.

Medical Payments Coverage

Helps pay reasonable medical and dental bills incurred in a covered loss, including funeral expenses.

Named Perils

Specific causes of loss named in and covered by a policy. If a loss occurs that is not listed on the policy, it is not covered.


The person who has certain rights to an insurance policy or annuity. Only the owner has the right to policy information or the ability to exercise policy rights.

Partial Loss

A loss that does not completely destroy or render the insured property useless or exhaust the applied insurance.


Person who receives premium notices and pays the premiums. The Payor may or may not be the Owner of the policy.

Permanent Life Insurance

Policy that remains active for the life of the Insured as long as premiums are paid when due.


A legal agreement between you and an insurance company dictating terms of the coverage.


Premises are land and buildings, which together are considered as a property.


The amount you pay for an insurance policy.

Renewable Term Insurance

Life insurance that is renewable without a medical exam for a limited number of consecutive terms.


Continuance of coverage beyond the original term of the policy.

Restoration Cost

The amount of money it costs to restore the form and function of the damaged part of covered property. There are limitations and restrictions so you will have to consult your policy for details.


An attachment to the policy that provides additional benefits or coverage.

Surrender Value

The amount you will receive if you decide to cancel a permanent life insurance policy before it matures.

Term Life Insurance

Life insurance payable to your beneficiary only if you die within the time frame specified by the policy or by a certain age.

Total Loss

The complete destruction of the insured property, or damage so extensive that repair costs exceed the value of the property.


The process an insurance company uses to evaluate insurance risks and determine the rates and terms under which they will accept the risks.

Universal Life Insurance

This type of permanent life insurance allows you to change your premium and coverage amounts, as well as accumulate cash value.

Vehicle Identification Number (VIN)

A series of 17 numbers and letters that is used to identify the year, make, and model of a vehicle. It can usually be found on your vehicle registration, your title, or on the driver's side of the dashboard of your car.

Waiver of Premium

This optional rider may be attached to a policy and allows the premium to be waived due to total disability.

Whole Life Insurance

Life insurance that may be kept in force for your entire life and is paid to your beneficiary upon your death.

These definitions are generally used in the insurance industry. However, all coverage is subject to the specific definitions and terms of the policy purchased and the facts of each claim. This educational help-guide may list defined terms that vary from those found in your policy. The definitions and terms of your policy control coverage.

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