Insurance Terms Glossary: Farragut & Knoxville, TN

By Colin Karich, Licensed Insurance Agent • Farragut, TN • Updated September 2026 • Reference guide

Insurance contracts are full of words that sound familiar but mean something very specific. Knowing the difference between actual cash value and replacement cost, or a DP-1 and a DP-3 policy, changes what you actually get paid after a claim. Use this page as a quick reference, or jump to the category you need.

Auto Insurance Terms

Liability Coverage

Pays for injuries or property damage you cause to others in an accident. Tennessee requires minimum liability limits of 25/50/25.

Collision Coverage

Pays to repair or replace your vehicle after a crash, regardless of who was at fault.

Comprehensive Coverage

Pays for non-collision damage to your vehicle, including theft, vandalism, hail, fire, or hitting an animal.

Uninsured / Underinsured Motorist Coverage

Protects you if you are hit by a driver who carries no insurance, or not enough insurance, to cover your damages. Roughly 1 in 5 Tennessee drivers is uninsured, which makes this coverage worth carrying. See best car insurance in Farragut and Knoxville.

Gap Insurance

Covers the difference between what you still owe on a financed or leased vehicle and its actual cash value if the car is totaled.

Telematics / Usage-Based Insurance

A program that tracks driving habits through an app or device and can lower your premium for safe, low-mileage driving. See how to save money on car insurance in Farragut.

SR-22

A certificate your insurer files with the state proving you carry the minimum required liability coverage, usually required after a serious driving violation.

Home Insurance Terms

Dwelling Coverage

Pays to rebuild or repair the physical structure of your home after a covered loss.

Replacement Cost vs. Actual Cash Value

Replacement cost pays what it takes to rebuild or replace at today's prices. Actual cash value subtracts depreciation, which usually means a lower payout for older items. See how much home insurance costs in Farragut and Knoxville.

Personal Property Coverage

Pays to repair or replace your belongings, such as furniture, clothing, and electronics, after a covered loss.

Loss of Use / Additional Living Expenses

Covers hotel stays, meals, and other extra costs if your home is temporarily uninhabitable after a covered claim.

Wind and Hail Deductible

A separate, often higher, deductible that applies specifically to wind and hail claims rather than your standard deductible. Common in East Tennessee due to spring storm activity.

Scheduled Personal Property

An add-on that provides higher coverage limits for specific high-value items like jewelry, art, or musical instruments that exceed your standard policy limits.

Endorsement (Rider)

An add-on to a base policy that changes or expands its coverage, such as adding sewer backup or scheduled jewelry coverage.

Life Insurance Terms

Term Life Insurance

Provides a death benefit for a set number of years, such as 20 or 30, and is typically far less expensive than permanent coverage. See life insurance in Farragut and Knoxville.

Whole Life Insurance

Permanent coverage that lasts your entire life and builds cash value, at a significantly higher premium than term life.

Beneficiary

The person or entity you name to receive the death benefit from a life insurance policy.

Death Benefit

The amount paid to your beneficiaries when you pass away, which is generally tax-free.

Landlord & Rental Property Terms

DP-1 Policy

A basic, named-perils landlord policy that only covers a limited, specifically listed set of causes of loss. See landlord insurance in Knoxville and Farragut.

DP-3 Policy

A broader, open-perils landlord policy that covers all causes of loss except those specifically excluded, offering stronger protection than a DP-1.

Loss of Rents Coverage

Reimburses a landlord for lost rental income if a covered loss makes the property temporarily uninhabitable.

Boat & Watercraft Terms

Agreed Value vs. Actual Cash Value (Boat)

Agreed value pays a pre-set amount if the boat is a total loss. Actual cash value pays current market value after depreciation, which is usually lower. See boat insurance on Fort Loudoun and Tellico Lake.

Liability Coverage (Boat)

Pays for injuries or property damage you cause to others while operating your boat, often required by marinas on Fort Loudoun and Tellico Lake before they will let you dock.

Business Insurance Terms

BOP (Business Owner's Policy)

A bundled policy combining general liability and commercial property coverage, typically at a lower cost than buying each separately. See business insurance in Knoxville and Farragut.

General Liability

Covers claims of bodily injury, property damage, or advertising injury caused by your business operations.

Workers' Compensation

Covers medical costs and lost wages for employees injured on the job. Tennessee requires it once a business has five or more employees, or from the first employee in construction.

Certificate of Insurance

A document proving your business carries active coverage, often required before a client or general contractor will hire you.

General Policy Terms

Umbrella Insurance

Extra liability protection that extends beyond the limits of your home, auto, or boat policy, typically in increments of $1 million. See umbrella insurance in Farragut and Knoxville.

Deductible

The amount you pay out of pocket before your insurance coverage kicks in on a claim.

Premium

The amount you pay, usually monthly or annually, to keep an insurance policy active.

Underwriting

The process an insurer uses to evaluate risk and determine your eligibility and rate for coverage.

Declarations Page

The summary page of your policy listing your coverages, limits, deductibles, and premium at a glance.

Exclusion

A specific situation or type of loss that a policy does not cover.

Named Insured

The person or people specifically listed on a policy as covered.

Multi-Policy Discount (Bundling)

A discount for carrying more than one policy type, such as home and auto, with the same carrier, typically saving 10 to 25 percent. See bundling home and auto in Farragut.

Claims History (CLUE Report)

A record of past insurance claims tied to you or a property, which carriers review when pricing a new policy.

Definitions on this page are general educational summaries written in plain language and are not the full legal terms of any specific insurance policy. Actual coverage, terms, and exclusions are governed by your policy documents and declarations page. This page is general information, not legal, tax, or financial advice. Colin Karich is a licensed insurance agent in the State of Tennessee.