When you are shopping for home insurance, the last thing you want to worry about is insurance terminology; however, it could be the most important thing.

Within homeowners insurance quotes there are many insurance terms that many consumers have a difficult time understanding.    You could lower your premiums by knowing the basic insurance terms.

It really is in your best interest to know some insurance terms because the simplest terms can seem fuzzy at the time of a claim.   To avoid this confusion be sure to understand the policy language at the time you get the homeowners insurance quotes.

Your Guide To Insurance

Terms Used In Your Insurance Policy

Credit Scores

  • More and more insurance companies are using credit and credit scores when determining home insurance premiums.
  • If your credit is below 750, look into getting some credit repair help.
  • Credit scores above 750 are considered by insurance companies to be a good credit score.
  • Improving your credit rating will help you get lower insurance premiums.
  • A homeowners insurance quote may or may not explain whether the insurance company will use credit; you may have to ask.

Actual Cash Value

  • The amount of money you will get after depreciation.
  • On a claim using Actual Cash Value, depreciation is factored in when determining the claim settlement.

Replacement Cost

  • When you have Replacement Cost, if you file a claim, depreciation is not factored in when determining your claim settlement.

Declaration Page

  • The statement that will show your policy limits.
  • When you shop for quotes, the insurance agent will ask to see your Declaration Page.
  • If you ever need to know your coverages, look at your Declaration Page.


  • The amount of a loss that is paid by the insured.
  • The insurance company pays the remainder of the claim after the deductible.
  • A higher deductible will lower your premiums.

Dwelling Value

  • The building on the residence premises used as insured’s private residence.


  • When you add additional coverages not originally included within the policy.
  • For example, if you have jewelry or fine arts that you want extra coverage for, you would add an endorsement to the policy.


  • When certain events are not covered within the policy coverages.
  • For example, some home insurance policies do not cover the damage that squirrels may cause to your roof, so that would be an exclusion.

Of course there are many, many more insurance terms used in the insurance industry; we’d have to publish the entire insurance policy to cover them all.   We tried to just highlight those insurance terms that are most often used.

Call your insurance agent for a more detailed listing of terms.