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FAIR Plan

FAIR Plan glossary: insurance terms in plain English

Declination, named peril, mortgagee, deductible and more — explained simply.

6 min read

Insurance comes with its own language. Here are the terms you're most likely to see when shopping for a FAIR Plan, explained in plain English.

A–D

  • Actual cash value (ACV): what it costs to replace damaged property, minus depreciation for age and wear.
  • Declarations page: the summary page of your policy showing who's covered, what's covered, limits and premium.
  • Declination: an insurance company's refusal to offer you a policy. Some FAIR Plans require proof of declinations.
  • Deductible: the amount you pay toward a covered claim before insurance pays the rest.
  • Difference-in-conditions (DIC) or wraparound policy: a separate policy that adds coverage a FAIR Plan leaves out.
  • Dwelling coverage: coverage for the structure of your home.

E–N

  • Endorsement: a change or addition to your policy.
  • Exclusion: something a policy specifically does not cover, such as flood.
  • FAIR Plan: Fair Access to Insurance Requirements — a state insurer of last resort for property.
  • Force-placed insurance: insurance your mortgage lender buys if your coverage lapses, usually at a higher cost.
  • Insurer of last resort: a source of coverage when private insurers won't provide it.
  • Mortgagee: your mortgage lender, listed on your policy so they're protected and notified.
  • Named peril: a policy that covers only the causes of loss it lists, such as fire.
  • Non-renewal: when an insurer decides not to renew your policy at the end of its term.

Still have questions about your policy? A licensed Insurance Agent can explain it line by line.

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O–Z

  • Open peril: a policy that covers all causes of loss except those it excludes.
  • Premium: what you pay for your insurance policy.
  • Replacement cost: what it costs to repair or replace property without subtracting for depreciation.
  • Residual market: insurance programs, like FAIR Plans, for people who can't get coverage in the regular market.
  • Vacancy clause: policy language that limits coverage when a property has been empty for a set period.
  • Voluntary market: regular private insurance companies that choose which properties to insure.

By Unquoting Insurance Company. This article is general information, not advice for your specific situation. Coverage and eligibility vary by state and policy — call (888) 928-9324 to talk with a licensed Insurance Agent.

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