Glossary
We Value Client Education

All-risk. Property insurance that overs your loss arising from any cause or effect, except those causes specifically excluded. This is different from coverage that applies only to losses arising out of causes explicitly covered.

Catastrophic loss. When your assets are damaged, or lost, beyond expectation. These losses are usually of such magnitude due to “acts of god” and nature (think hurricanes, floods, fire) as to be difficult to predict and plan for. You can rarely “self-insure” assets in this context.

Coverage. A word in insurance writing that is equal to “insurance” or “protection.” When you buy insurance, you are “covering” yourself and your assets against potential future loss.

Excess liability. These policies protect you in excess of an underlying-liability policy. The underlying policy is often an “umbrella-liability policy.” Excess liability simply provides additional limits. (See “umbrella-liability policy” below.)

Exposure. A set of conditions that make you subject to a potential loss because of unforeseen hazards. “Exposure” is also used as a measure of “rating units,” or the “premium base” of a given risk.

Floater (or personal-articles floater). A personal-lines, inland marine policy used to further protect scheduled personal property on an all-risk basis. In other words, the policy is used for assets such as furs, jeweler, and artwork that has limited coverage under, say, a homeowner policies. See “Items of value” below.

Homeowner’s insurance. A policy that provides property and liability coverage tailored to the needs of home owners, condo owners, and apartment tenants. You can customize your policy depending on the type and size of your home, and long-term needs.

Insurance policy. A legal instrument which allows you to pay a fixed amount of money to an insurance company, and thus “transfer” an unknown potential loss to that company.

Items of value. Your personal high-net-worth assets that may include furs, jewelry, fine arts, silverware, cameras, musical instruments, stamps, coin collections, guns, and similar property.

Liability insurance. This specifically protects you, the insured, in the event you’re sued by a third party for claims that fall within the coverage of your policy. Payouts are not typically made to the insured, but rather to someone who suffered a loss, and is not a party to your policy.

On the water. Those who own homes on American coastlines, and which may be vulnerable to hurricanes due to climate change. Luxury watercraft may also be affected.

Personal-lines insurance. This includes property-and casualty insurance products that protect you from losses you couldn’t afford on your own. This insurance let’s you do common things like drive a car, travel, entertain, or own a home without risking financial ruin.

Premium credit. A discount that reduces the premium you pay based on your positive financial history. It’s awarded in advance, meaning rates are discounted at the time each premium is due, regardless of your coverage amounts.

Personal risk management. How we assess, minimize, and prevent accidental loss to your tangible assets through the use of insurance, contractual risk transfer, risk-avoidance techniques, safety measures, and more.

Total loss. This language applies when your property, or an asset, is destroyed beyond repair. Since the spirit of an insurance policy is to restore assets to original conditions, as the policyholder you’re generally reimbursed in an amount equal to your property’s value, depending on coverage limits.

Umbrella-liability policy. Umbrella insurance protects you from large, and potentially harmful, liability claims or judgments. Umbrella-liability coverage is a scaffold when liability limits (typically in your homeowner or auto-insurance policy) have been reached.