Actual cash value
Actual cash value is an estimate of property's value immediately before a covered loss, accounting for factors such as age, condition, mileage, and local market data.
Read the full definitionPlain-language reference
Car insurance glossary
Insurance paperwork has a vocabulary of its own. These definitions explain what 60 common terms mean, how they show up in real situations, and what to look for in your policy.
New to auto insurance? Start with the car insurance guide for the bigger picture.
60 terms found
A
Additional driver
An additional driver is someone listed on a policy who may drive an insured vehicle but is not necessarily the named insured.
Read the full definitionAftermarket parts
Aftermarket parts are replacement vehicle parts made by a company other than the original vehicle manufacturer.
Read the full definitionAnti-theft discount
An anti-theft discount is a premium reduction an insurer may offer for an eligible factory-installed or approved vehicle security device.
Read the full definitionAt-fault accident
An at-fault accident is a crash in which a driver is found fully or partly responsible under the applicable rules.
Read the full definitionB
Bodily injury liability
Bodily injury liability is coverage for covered injuries you cause to other people in an auto accident.
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Car insurance claim
A car insurance claim is a request for an insurer to review a loss and pay benefits that the policy covers.
Read the full definitionCar insurance deductible
A car insurance deductible is the amount you agree to pay toward certain covered claims before the insurer pays its share.
Read the full definitionCar insurance down payment
A car insurance down payment is the amount due when a policy begins under an installment plan.
Read the full definitionCar insurance premium
A car insurance premium is the price an insurer charges for a policy.
Read the full definitionCar insurance quote
A car insurance quote is an estimate of the premium for selected drivers, vehicles, coverages, and limits.
Read the full definitionCar insurance rate
A car insurance rate is a pricing value an insurer uses to calculate premium for a particular risk.
Read the full definitionClaims adjuster
A claims adjuster investigates an insurance claim and evaluates coverage, damage, fault, and the amount payable.
Read the full definitionCollision coverage
Collision coverage helps pay for covered damage to your car after it hits another vehicle or object, or overturns.
Read the full definitionCombined single limit
A combined single limit provides one liability maximum for covered bodily injury and property damage from an accident.
Read the full definitionComprehensive coverage
Comprehensive coverage helps pay for covered vehicle damage that is not caused by a collision.
Read the full definitionContinuous insurance coverage
Continuous insurance coverage means maintaining insurance without a break between policy periods.
Read the full definitionCoverage limit
A coverage limit is the maximum amount available under a particular coverage.
Read the full definitionD
Declarations page
A declarations page is the policy summary that lists major details such as drivers, vehicles, coverages, limits, deductibles, dates, and premium.
Read the full definitionDefensive driving discount
A defensive driving discount is a price reduction that may apply after an eligible driver completes an approved safety course.
Read the full definitionDiminished value
Diminished value is a claimed reduction in a vehicle's market value after it has been damaged and repaired.
Read the full definitionDriving record
A driving record is a state-maintained history that can include license status, traffic violations, convictions, and reportable accidents.
Read the full definitionF
Fault determination
Fault determination is the evaluation of who was legally responsible for an accident and in what proportion.
Read the full definitionFull coverage car insurance
Full coverage is an informal phrase, not a standard policy type or a promise that every loss is covered.
Read the full definitionG
Garaging address
A garaging address is the location where a vehicle is usually kept when it is not being driven.
Read the full definitionI
Insurance grace period
An insurance grace period is extra time allowed for a required action in limited situations, if the policy or law provides it.
Read the full definitionInsurance installment plan
An insurance installment plan divides a policy premium into scheduled payments.
Read the full definitionInsurance lapse
An insurance lapse is a period when required or expected coverage is not in force.
Read the full definitionInsurance risk class
An insurance risk class is a group of policyholders with similar characteristics used in underwriting or pricing.
Read the full definitionInsurance score
An insurance score is a rating tool based on selected credit information and other permitted data, where state law allows its use.
Read the full definitionInsurance subrogation
Insurance subrogation is the process by which an insurer seeks recovery from a responsible party after paying a covered claim.
Read the full definitionInsurance underwriting
Insurance underwriting is the process an insurer uses to decide whether it will offer or continue coverage and on what permitted terms.
Read the full definitionInsured
An insured is a person or organization that qualifies for protection under an insurance policy.
Read the full definitionL
Liability coverage
Liability coverage pays covered costs when you are legally responsible for injuring someone or damaging their property with a vehicle.
Read the full definitionM
Medical payments coverage
Medical payments coverage can pay eligible medical or funeral expenses for you and covered passengers after an auto accident.
Read the full definitionMulti-car discount
A multi-car discount is a price reduction an insurer may offer when more than one eligible vehicle is insured on the same policy or account.
Read the full definitionN
Named insured
The named insured is the person or organization specifically listed as an insured on the declarations page.
Read the full definitionNo-fault insurance
No-fault insurance usually means a system where your own policy pays certain injury benefits after a crash, regardless of who caused it.
Read the full definitionO
OEM parts
OEM parts are replacement vehicle parts made by the original vehicle manufacturer or supplied under its brand.
Read the full definitionP
Permissive use
Permissive use refers to someone driving an insured vehicle with the owner's permission.
Read the full definitionPersonal injury protection
Personal injury protection can pay covered medical expenses and certain other costs after an auto accident, regardless of fault.
Read the full definitionPolicy cancellation
Policy cancellation ends insurance before the scheduled expiration date.
Read the full definitionPolicy endorsement
A policy endorsement is a written change that adds to, removes from, or modifies the standard insurance contract.
Read the full definitionPolicy exclusion
A policy exclusion describes a person, property, use, event, or type of loss the policy does not cover.
Read the full definitionPolicy limit
A policy limit is the most an insurer will pay for a covered loss under the stated part of a policy.
Read the full definitionPolicy nonrenewal
Policy nonrenewal means an insurer will not offer another policy period after the current one expires.
Read the full definitionPolicy period
The policy period is the span of time during which an insurance policy is scheduled to provide coverage.
Read the full definitionProof of insurance
Proof of insurance is a document or approved electronic record showing that a vehicle or driver has an insurance policy in force.
Read the full definitionProperty damage liability
Property damage liability pays for covered damage you cause to someone else's vehicle or property.
Read the full definitionR
Rental reimbursement coverage
Rental reimbursement coverage helps pay for temporary transportation while a covered claim leaves your vehicle unusable.
Read the full definitionRoadside assistance coverage
Roadside assistance coverage pays or arranges specified help when a covered vehicle becomes disabled.
Read the full definitionS
Salvage title
A salvage title or certificate is a state designation for a vehicle that meets that state's definition of a total loss or severely damaged vehicle.
Read the full definitionSplit limits
Split limits state separate maximums for bodily injury per person, bodily injury per accident, and property damage per accident.
Read the full definitionSR-22 insurance
An SR-22 is a form an insurer files with a state to confirm that a driver has required liability coverage. It is not a separate type of insurance.
Read the full definitionStacking insurance coverage
Stacking combines eligible uninsured or underinsured motorist limits from more than one vehicle or policy when the law and contract allow it.
Read the full definitionState minimum coverage
State minimum coverage is the least auto insurance or financial responsibility protection required by a state for a particular driver or vehicle.
Read the full definitionT
Total loss
A total loss occurs when an insurer determines that a damaged or stolen vehicle meets the applicable standard for being totaled.
Read the full definitionU
Underinsured motorist coverage
Underinsured motorist coverage can help when an at-fault driver has insurance but not enough to cover a qualifying loss.
Read the full definitionUninsured motorist coverage
Uninsured motorist coverage can pay covered losses when an at-fault driver has no liability insurance.
Read the full definitionV
Vehicle identification number
A vehicle identification number is the unique 17-character code assigned to most modern vehicles.
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