Actual Cash Value: An insurance policy that pays actual cash value will only pay you what your property is worth today, not the cost to replace it or the amount you paid originally. For example, if you own a very nice stereo but it is three years old, an insurance company will only pay what a three-year-old stereo is worth rather than the cost of a new stereo. For that reason, actual cash value insurance is less expensive to buy than replacement cost insurance (but if you need to replace something you may end up paying a lot).

All-Risk: An all-risk (or "all-perils") policy means that the insurance company will pay for anything that happens that isn't specifically excluded by the policy. For example, a policy might exclude floods and earthquakes. So, if your house is damaged in an earthquake, the company won't pay. But if anything else happens, such as a tornado or a tree falling on your house, the company has to pay.

Appraisal: An evaluation of something (like jewelry) to figure out how much it's worth. Often, if you're buying special coverage for jewelry, you'll have to get an appraisal of the jewelry. Even if your insurance company doesn't require it, it's still good to get appraisals on expensive jewelry so if it gets stolen, you can prove to the company how much it will cost to replace it.

Bankruptcy: When you file bankruptcy, you are legally declaring that you can’t repay your debts. Filing for bankruptcy is very bad for your credit report and will stay on your record for 10 years. Make sure you look at all your options first.

There are 2 types of bankruptcy: Chapter 13 and Chapter 7. Both must be filed through a court.
If you file Chapter 13, you keep all of your property and work out a payment plan to pay off your debts. You need to have a steady income to pay off your debts. If you owe for federal student loans, federal taxes, or child support, Chapter 13 bankruptcy will not protect you from repaying those debts.

If you file Chapter 7, the court sells all of your assets and property to pay your debts. This includes cars, homes, furniture, and jewelry. If you want to keep your car and sell the rest, for example, you can make a special payment plan with the court. If you owe for federal student loans, federal taxes, alimony, child support, court fines, or personal injury caused by drugs or drunk driving, Chapter 7 will not protect you from repaying those debts.

Bare-Walls: If you live in a co-op or condominium, your association may have "bare-walls coverage," which means the building's insurance only covers up to the walls of your unit and nothing inside. This means it won't cover damage to any of your internal pipes, plumbing, wiring or personal property. To get this property covered, you will need to buy co-op or condominium insurance.

Bodily Injury Liability: If someone is injured while in your home or you accidentally hurt them in some way (maybe because your dog bites them), the cost of their medical care and other damages can be covered under bodily injury liability. Most home insurance policies offer bodily injury liability coverage.

Cancellation: An insurance company can cancel your insurance if you do not pay your premiums, if you make too many claims, if you lie to them, or if they believe you are now a high risk for some other reason. If your insurance gets canceled you won't have any home insurance and it may be more difficult to get insurance from other companies as well. Insurance companies are required to give you a certain number of days notice before they cancel your insurance; how many days depends on what state you live in.

Claim: When you have a loss that you think the insurance company needs to know about, you make a "claim." (A "claims adjuster" from the insurance company will then decide the amount of your loss.)

Claims Adjuster: The person from the insurance company who decides the amount of your loss after you make a claim.

Collection Agency: If you’re really late paying your bills or don’t pay them at all, the company or bank you owe often uses a collection agency to get the money. A "collection account" is a bill that has been turned over to a collection agency.

Coverage: The amount of insurance you buy to cover a specific loss. For example, if you have homeowner's insurance, you might have coverage up to $10,000 for the contents of your home.

Credit Bureaus or Credit Agencies: Credit bureaus, also called credit agencies, are companies that put together credit reports and credit scores. Potential creditors, employers, and others use the reports to get a sense of your financial habits. The three major credit reporting agencies are Equifax, Experian, and TransUnion.

Credit History or Credit Record: This is another term for a credit report. See Credit Report.

Credit Limit: This is the maximum amount of money you can spend on a credit card or line of store credit. Once you reach that limit, you’re "maxed out." The credit card company won't let you use the card anymore until you pay back some of what you owe.

Credit Rating or Credit Score: Your credit rating, also called your credit score, is the number that companies use to compare your credit report to other people’s credit. It’s like a grade — the higher your score, the better your credit report. The 3 major credit bureaus have different scoring methods.

Credit Report: This is a record of your financial history. It includes information about whether you pay your bills on time, if you’ve filed for bankruptcy, and how many credit cards you have. Credit reports are put together by credit bureaus. With your written agreement, credit bureaus let potential lenders see your report. You also have the right to look at your credit report any time you want. Learn more about credit reports.

Deductible: The amount of money you agree to pay for a loss before the insurance company pays. (For example, if you have a $100 deductible and your home has $400 worth of damages because of a fire, then you have to pay $100 and the insurance company will pay the remaining $300.)

Depreciation: Property's loss of value because of wear and tear. For example, a three-year-old TV is not worth as much as a new TV. The difference between what the TV was worth new and what it's worth now is the depreciation. Depreciation is important for "actual cash value" policies, because these will only pay you the depreciated value of your property, not how much you originally paid for it.

Endorsements: An endorsement (or "rider") is an addition to an insurance policy that changes your coverage. For example, adding an earthquake endorsement provides you with insurance against earthquakes, while standard home insurance doesn't.

Exclusions: Things that are not covered by your insurance. For example, most standard home insurance policies exclude floods. So if your home is damaged in a flood, and you only have standard insurance, you won't get any money from your insurance company. Different insurance companies have different exclusions in their policies, so it's important to ask what's excluded when choosing an insurance company or policy.

Exclusive Agent: An insurance agent who sells insurance for only one company.

FAIR Plan:Many states have FAIR (Fair Access to Insurance Requirements) Plans, which help people get insurance if they can't find an insurance company that will sell them insurance. Find out if your state has a FAIR Plan and how to contact them.

Finance Charges: When you’re late paying a bill or don’t pay the full amount you owe, you have to pay finance charges. These charges are interest payments that are added to your bill in addition to what you still owe. Get more information about finance charges.

High-Risk Insurance: Insurance that is available to people who live in very unsafe areas (like flood zones or far away from a fire department) or who insurance companies consider a high risk because of their credit record or insurance history. Also known as "non-standard insurance," it is more expensive than standard home insurance.

Home Warranty:Extra insurance that will pay the costs of repairing major appliances in your home like refrigerators or an air conditioning system. Home warranties are most useful if you're buying or selling a house. Get more information.

Independent Agent: An insurance agent who sells insurance for more than one company.

Inquiry: This is when you or a company asks to see your credit report. When you submit an inquiry, you’re asking for your own personal copy or you’re giving a potential lender permission to look at your credit report. Potential lenders include insurance companies, car dealers, banks, and credit card companies. These inquiries appear on public copies of your credit report. A high number of inquiries can make your credit score go down.

When a company submits an inquiry, they want to see if you pre-qualify for an offer. This has nothing to do with you asking for credit. These inquiries only appear on private copies of your credit report. They are not shown to other companies and will not affect your credit score.

Insurance Agent: The person who sells you insurance.

Insurance Score: Your insurance score is based on your credit report. This score is different from your credit score. Insurance companies look at credit reports and give their own scores. Each insurance company has a different system. They use their scores to decide whether or not to offer you insurance and how much to charge.

Liability: Damage to someone's property or person (in other words, their medical expenses) you are considered legally responsible for.

Limit, or Coverage Limit: The maximum amount an insurance company will pay to replace a specific item is your limit. For example, you might have a limit of $2,000 on your personal computer. This means the most the insurance company will give you to replace the computer is $2,000, even if that won't cover the cost of a new computer.

Loss: When something happens like a fire, burglary, or accident that damages your property it is called a loss. You then report your loss to the insurance company and ask them for money to replace your property (a process known as "making a claim").

Loss-of-Use Coverage: If your home is so damaged because of a fire or other accident that you have to stay somewhere else for a while, loss-of-use coverage will cover these expenses.

Named (or Named-Perils): Named-perils policies only cover damages that are caused by events specifically mentioned in your policy. If you have this kind of insurance and something happens that is not mentioned in your policy, your insurance won't cover it. The opposite of this kind of policy is "all-risk coverage," which covers anything that is not specifically excluded in your policy.

Non-renewal: If an insurance company decides that you are too much of a risk or that you aren't financially responsible enough to be covered, they can choose not to renew your policy when it expires. You will have to find new insurance and it may make it difficult for you to get insurance from other companies as well.

Past Due: When you’re late paying a bill, it’s “past due.” Bills usually need to be past due 30 days or more before they show up on your credit report.

Peril: The cause of a loss, such as fire, theft, floods, and hurricanes

Personal Statement: If you think a credit bureau has made a mistake on your credit report and the credit bureau disagrees, you can add a personal statement. This statement becomes a part of your credit report and explains your side of the story.

Policy: Your contract with the insurance company, which describes how much you owe them in premiums and what insurance you get in return

Policy Limit: The overall amount of money an insurance company will pay for a specific insurance coverage is called your policy limit. Your premium will be based on what limits you choose. You will have to pay for any damages over your policy limit so it's important to set your limits high enough to protect your finances.

Premium: The amount of money you pay the insurance company each year (or every six months) to cover your home and property.

Public Adjuster: The professional you hire to help you get the most from your insurance company after an accident is called a public adjuster. Learn more about public adjusters.

Quote: The price an insurance company estimates it will charge to provide you with insurance.

Replacement Cost (or Value) Insurance: This type of insurance coverage will pay you the exact amount of money needed to replace what was lost or damaged in an accident. It is more expensive than "actual cash value insurance," but it provides much better protection, so it's how most home insurance policies work.

Schedule: The comprehensive list in a policy of what items are covered, where, for how much and under what conditions.

Statement of Dispute: If you think a credit bureau has made a mistake on your credit report and the credit bureau disagrees, you and the credit bureau can add statements. These statements become a part of your credit report and explain both sides of the story. Your statement is also called a personal statement.

Tax Lien: A tax lien, or lien, is when the government makes a claim against your home or property because you didn't pay your taxes. If you’re in debt and owe money to creditors, the government can get a court order to take your property and sell it to pay off your debts. Tax liens are very bad for your credit report and credit rating and stay on your credit report for 15 years.

Umbrella Policy: An umbrella policy is a special policy that provides extra liability coverage. Usually, people with a lot of money buy an umbrella policy to protect their finances if they get sued.