The home-insurance glossary
The terms that turn up in a non-renewal letter, a lender's checklist, or a hard-market quote, explained plainly, with sources, and dated. Each entry answers "what is this" in the first sentence; the full page goes into why it matters, how it works, and who it affects, by state where it varies.
verified 2026-05-118 terms.
- FAIR Plan
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A FAIR Plan (Fair Access to Insurance Requirements) is a state-chartered insurance pool that sells basic property coverage to homeowners who cannot buy a policy in the regular ('admitted') market. Every admitted property insurer in the state is required to share its losses; no taxpayer money backs it.
- Difference in conditions policy (DIC)
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A difference in conditions (DIC) policy is a companion policy bought alongside a bare-bones FAIR Plan policy to add back what the FAIR Plan excludes: personal liability, theft, water damage, food spoilage, and the like. Together the two roughly match a normal homeowners policy. A meaningful share of FAIR Plan buyers pair theirs with a DIC.
- Named-peril vs open-peril coverage
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A named-peril policy covers a loss only if its cause is on the policy's list (fire, lightning, windstorm, and so on); an open-peril (also called 'all-risk') policy covers any cause of loss except the ones it specifically excludes. The burden of proof flips: under named-peril you must show the cause is covered. Most FAIR Plan base policies are named-peril.
- Insurance non-renewal notice
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A non-renewal notice tells you your insurer will not renew your homeowners policy when the current term ends. It is not a mid-term cancellation: your coverage runs to the expiration date. Most states require 30 to 60 days' written notice, and a few (California after a declared wildfire, for example) bar non-renewals in disaster areas for a year.
- Force-placed (lender-placed) insurance
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Force-placed insurance (also called lender-placed or creditor-placed insurance) is a policy your mortgage servicer buys on your home, at your expense, when it has no proof you carry your own. It protects the lender's interest, not yours: it is far more expensive than a normal policy, often covers only the structure, and includes no personal-property or liability coverage.
- Admitted vs surplus-lines insurance
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An admitted carrier is licensed by the state insurance department and pays into the state guaranty fund, which steps in if the carrier becomes insolvent. A surplus-lines or excess-and-surplus (E&S) carrier is not state-licensed there: it writes risks the admitted market refuses, with rates and policy forms that the state does not pre-approve, and is not backed by the guaranty fund.
- Replacement cost vs actual cash value
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A homeowners policy pays a loss on one of two bases. Replacement cost pays what it would cost today to rebuild or replace the damaged property, with no depreciation deducted. Actual cash value (ACV) pays the replacement cost minus depreciation for age and wear. The same fire claim can settle for very different dollars depending on which basis the contract uses.
- Insurance binder
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An insurance binder is a short, temporary contract a carrier issues as proof of coverage while the underwriter prepares the full policy. It runs for a defined window (typically 30 to 90 days), names the same insured, dwelling, and coverages as the pending policy, and gives lenders what they need to close on a home. Once the full policy issues, the binder is replaced.
Every definition here is written for a homeowner, not an underwriter: plain words first, the formal term named once. Where a figure appears (a notice period, a coverage cap, a count of policies in force), it carries a named source and the date we last checked it; we don't quote premiums and we don't predict. Spotted something out of date or wrong? Tell us. For the facts on a specific state, start at the state directory; if you've just had a policy non-renewed, the non-renewal walkthrough is the place to begin.