Policy Structure | Insurance Terms Lexicon

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Policy structure is where readers learn how an insurance contract is put together. This section now covers the central contract terms readers need before jumping into more specialized coverage or claims questions.

Contract Basics

Issuance, Trigger, And Status

Payout And Valuation Mechanics

Renewal And Exit

Use This Section When You Need To Understand

how a policy defines the covered party
what grants coverage and what takes it back
how deductibles, limits, aggregates, coinsurance, and valuation change the insured result
how endorsements, binders, policy periods, triggers, cancellations, and renewals shape policy status over time

Policy Structure

Actual Cash Value

Policy Structure

Property valuation approach that typically starts with replacement cost and subtracts depreciation.

Read more about Actual Cash Value.

Policy Structure

Additional Insured

Policy Structure

Liability-policy status granted to another party for specified claims tied to the named insured's operations.

Read more about Additional Insured.

Policy Structure

Aggregate Limit

Policy Structure

Total payout cap that applies across covered claims during the relevant policy period.

Read more about Aggregate Limit.

Policy Structure

Policy Structure

Temporary contract that puts insurance in force before the final policy is issued.

Read more about Binder.

Policy Structure

Policy Structure

Midterm policy termination before the scheduled expiration date.

Read more about Cancellation.

Policy Structure

Policy Structure

Liability trigger that focuses on when the claim is first made and reported, not just when the act occurred.

Read more about Claims Made.

Policy Structure

Policy Structure

Property-policy mechanism that can penalize underinsurance when values are not carried to the required percentage.

Read more about Coinsurance.

Policy Structure

Policy Structure

Contract rule or duty that governs how coverage operates and what each party must do.

Read more about Condition.

Policy Structure

Policy Structure

Amount the insured absorbs before the insurer pays the remaining covered loss.

Read more about Deductible.

Policy Structure

Policy Structure

Amendment that adds, removes, narrows, broadens, or clarifies policy terms.

Read more about Endorsement.

Policy Structure

Policy Structure

Policy wording that carves out specified loss, property, conduct, or circumstances from coverage.

Read more about Exclusion.

Policy Structure

Policy Structure

Person or organization that qualifies for protection under the contract.

Read more about Insured.

Policy Structure

Insuring Agreement

Policy Structure

Core coverage promise describing what kind of loss the insurer agrees to pay, subject to the rest of the contract.

Read more about Insuring Agreement.

Policy Structure

Policy Structure

Maximum amount payable under the relevant coverage part, subject to the policy wording.

Read more about Policy Limit.

Policy Structure

Policy Structure

Party specifically listed on the policy and usually holding the main contract rights and duties.

Read more about Named Insured.

Policy Structure

Policy Structure

Liability trigger that centers on when covered injury or damage happened.

Read more about Occurrence.

Policy Structure

Policy Structure

Insurance contract identifying covered parties, covered loss, limits, exclusions, and duties.

Read more about Policy.

Policy Structure

Policy Structure

Span during which the policy is in force between its effective and expiration dates.

Read more about Policy Period.

Policy Structure

Policy Structure

Continuation of coverage into a new term after repricing, underwriting review, or updated terms.

Read more about Renewal.

Policy Structure

Replacement Cost

Policy Structure

Property valuation basis that pays repair or replacement expense without depreciation, subject to policy conditions.

Read more about Replacement Cost.

Policy Structure

Retroactive Date

Policy Structure

Earliest prior-act date from which claims-made coverage can respond.

Read more about Retroactive Date.