Auto Insurance
Insurance glossary
The terms insurance carriers use, translated.
$
- $25/$50/$15
A
- Accident
- Accident-Only Policies
- Actual Cash Value (ACV)
- The depreciated value of your vehicle at the time of a claim — what it would sell for, used.
- Actuarial Report
- Actuary
- Additional Interest Insured
- Adjuster
- Administrative Expense Charge
- Advance Premiums
- Agent
- Aggregate
- AM Best Rating
- A measure of an insurance company's financial strength and ability to pay claims.
- Anti-Theft Device
- Application
- Appraisal
- Assigned Risk Plan
- At-Fault Accident
- An accident the insurance company determines was caused by your negligence or actions.
- Attach
- Automobile Liability Insurance
B
- Binder
- Bodily Injury
- Bodily Injury Liability Coverage
C
- Cancellation
- Claimant
- Collision Coverage
- Pays for damage to your own vehicle from a collision, regardless of who caused it.
- Combined Single Limit
- Comprehensive Coverage
- Pays for damage to your vehicle from non-collision events — theft, vandalism, weather, fire, hitting an animal.
- Comprehensive Coverage (for physical damage other than collision)
- Continuously Insured
- Contract
- Coverage Limits
- The maximum amount your insurer will pay on a covered claim.
D
- Declarations Page
- The summary front page of your insurance policy showing coverage limits, deductibles, premium, and effective dates.
- Deductible
- The amount you pay out of pocket before your insurance coverage kicks in on a claim.
- Dollar Threshold
- Driver Education Credit
- Driver Improvement Course
- Driver Status
E
- Effective Date
- Endorsement
- A modification or add-on to your insurance policy.
- Exclusions
- Extended Coverage
F
- Fair Market Value
- Financial Responsibility Law
- Free Look Period
- Full Coverage
- An informal term for a policy that includes liability, comprehensive, and collision coverage.
G
- Gap Insurance
- Pays the difference between your vehicle's actual cash value and your loan or lease balance if the vehicle is totaled.
- Garaging Location
- Grace Period
I
- Indemnity
- Independent Agent
- Insurance Claim
- A request to your insurer to pay for damage or losses covered by your policy.
L
- Lapse
- Liability Coverage
- The portion of an auto policy that pays for damage or injuries you cause to others.
- Liability Limits
- Loan/Lease Payoff Coverage
- Loss
- Loss History
M
- McCarran-Ferguson
- Medical Payments (MedPay)
- Pays for medical expenses for you and your passengers after an accident, regardless of fault.
- Medical Payments and Personal Injury Protection (PIP)
- Medical Payments Coverage
- Minimum Coverage
- The least amount of insurance a state legally requires drivers to carry.
N
- NAIC Complaint Index
- A measure of how many complaints an insurer receives relative to its market share.
- Named Driver Exclusion
- Named Driver Policy
- Named Insured
- No-Fault Insurance
- Non-Economic Benefits
- Non-Owners Policy
- Non-Renewal
- When an insurer chooses not to renew your policy at the end of its term.
O
- Occasional Driver
P
- Payee
- Personal Injury Protection (PIP)
- Personal Injury Protection (PIP)
- Pays for medical expenses and lost wages for you and your passengers after an accident, regardless of fault.
- Policy Period
- Policy Renewal
- When your insurance policy reaches its end date and is extended for another term.
- Premium
- The amount you pay your insurance company for coverage, typically monthly, every six months, or annually.
- Primary Residence
- Primary Use
- Principal Driver
- Property Damage Liability Coverage
- Proximate Cause
R
- Rate
- Refund
- Reinstatement
- Rental Reimbursement Coverage
- Replacement Cost
- Rescission
- Rider
- Rideshare Coverage
- An endorsement that extends personal auto coverage to driving for Uber, Lyft, or other rideshare platforms.
- Roadside Assistance Coverage
- Rule of 78
- Rule of Anticipation
S
- Salvage Titles
- Second Named Insured
- Split Limit
- SR-22
- SR-22
- A certificate of financial responsibility your state may require after certain violations.
- Subrogation
- The process by which your insurer recovers money from the at-fault party after paying your claim.
- Surcharge
T
- Telematics
- Programs that use a device or app to track your driving habits in exchange for discounts.
- Third Party
- Threshold
- Tort
- Totaled (Total Loss)
- When repair costs exceed the vehicle's actual cash value (or a state-specific threshold), the insurer declares it a total loss.
- Towing and Labor Coverage
U
- Underinsured Motorist Coverage (UIM)
- Underwriter
- Underwriting
- Uninsured and Underinsured Motorist Coverage
- Uninsured Motorist Coverage
- Pays for your injuries and damage if you're hit by a driver with no insurance.
- Uninsured Motorist Coverage (UM)
- Uninsured/Underinsured Motorist Property Damage Coverage
V
- Vehicle Identification Number (VIN)
- Verbal (or Descriptive) Threshold