Property insurance, in plain language

4-Point Inspection

A limited inspection of roof, electrical, plumbing, and HVAC — the check many carriers require on older homes before binding a policy.

Actual Cash Value (ACV) vs. Replacement Cost Value (RCV)

ACV pays a depreciated claim amount; RCV pays what it actually costs to rebuild — the difference can be tens of thousands of dollars on an older home.

Coverage A (Dwelling Coverage)

The dollar limit a homeowners policy pays to rebuild the structure itself — properly set to rebuild cost, not market value.

Difference in Conditions (DIC) Policy

A supplemental policy that fills the coverage gap a narrower primary policy leaves — most commonly paired with the California FAIR Plan.

Insurability

Whether a property can realistically be insured at all, and how hard that placement will be — a distinct question from what it will cost.

Peril

The specific cause of loss a policy covers or excludes — fire, flood, wind, earthquake, and the rest — the unit insurance is actually priced and sold by.

FEMA Flood Zone

The letter-coded designation on a FEMA flood map (A, AE, V, X, …) that states a property's modeled flood risk band.

Special Flood Hazard Area (SFHA)

A FEMA-mapped zone with a 1%+ annual chance of flooding — the trigger for a lender's mandatory flood-insurance requirement.

California FAIR Plan

California's state-mandated insurer of last resort — a fire-only policy for homes the admitted market has declined or non-renewed.

Wildland-Urban Interface (WUI)

The zone where homes sit adjacent to or intermixed with wildland vegetation — the geography insurers watch most closely for non-renewal.

Named Storm Deductible

A separate, higher deductible that applies only once a storm is officially named by NOAA — common along hurricane-exposed coastlines.

Wind/Hail Deductible

A separate, usually percentage-based deductible for wind and hail claims — often much larger than the flat deductible on the rest of the policy.

Admitted vs. Non-Admitted (Surplus Lines) Carrier

Whether an insurer is licensed and rate-regulated by the state (admitted) or operating outside that system for hard-to-place risks (non-admitted / surplus lines).

Carrier Appetite

An insurer's current willingness to write new business for a given peril, geography, and property type — appetite shifts far faster than most people expect.

Loss Ratio

The share of premium dollars an insurer pays out in claims — the core number that decides whether a carrier keeps writing in a market.

Non-Renewal

A carrier's decision not to renew a policy at its next term — distinct from a cancellation, and the leading edge of a market pulling back from a geography.

Insurance Binder

Temporary written proof of coverage issued before the full policy is printed — what most closings actually require to fund.