Glossary of insurance terms & definitions

Coverage which applies to an insured and pays if death, loss of sight, or dismemberment of the foot, hand or whole finger occurs as a result of a covered loss. 

The fair market value of property: replacement cost minus depreciation.

The person(s) responsible for evaluating an insurance claim to determine the insurance company's liability under the terms of an owner's policy.

Replacement parts made by a company other than the car's original manufacturer.

A representative who sells insurance on behalf of the company.

A change to the policy which alters the contract for instance by adding or replacing types of coverages, modifying limits or changing the policy address . 

A change to the policy which alters the contract by adding or replacing coverage. 

A device that prevents the vehicle from being driven and deters vehicle theft. 

An inspection and report completed by a qualified appraiser to determine the value of property or the extent of damage.

A person who inspects and writes a repair estimate for damaged property. 

A process of having an impartial third party settle a dispute.  

A party that is legally  liable for damages in an accident.

A temporary insurance contract which provides coverage until a finalized copy of the policy declarations page and policy can be issued to the customer.

Termination of an insurance contract before the policy period ends.

Coverage for transportation expenses, such as a rental car or public transportation, while your vehicle is not drivable or at a shop being repaired.

A disaster affecting a specific geographic area such as floods, hurricanes, tornados, and large hailstorms.

A request or demand for compensation under the terms of the insurance policy. 

Individual or entity presenting a claim.

Optional coverage with a deductible for an insured vehicle that is damaged by contact with another vehicle or object.

A principle of tort law in certain states where responsibility for the accident is assessed to each party involved based on their actions which contributed to the accident.

Optional coverage with a deductible for an insured vehicle that is damaged by events which are not collisions, such as fire, theft, vandalism, and broken glass.

A type of homeowners insurance that protects condominium owners from covered losses to their condominium, personal property, and some types of damage or injury to others for which the insured is legally liable.

A principle of tort law in certain states where any amount of responsibility for an accident on the part of a party prevents them from claiming damages from another party.

The part of your policy that includes your name, address, a description of the property being insured, the policy period, the amount and type of insurance coverage elected, and the applicable premiums.

The portion of a claim paid out of pocket.  The deductible you choose is a factor in determining your insurance rates.

The decrease in property value due to wear and tear, deterioration, or lack of maintenance.

A premium reduction if you or your automobile meet conditions that may reduce the insurer's losses or expenses.

An addition to the standard policy which modifies coverage.

An appraisal of the cost to repair your damaged property

State specific coverage available under an auto policy for reasonable and necessary medical expenses incurred by an insured, passenger, or household member which covers co-payment, co-insurance, and deductible expenses not covered by your health insurance plan.

A person insured by AAA.

An endorsement that pays to rebuild your home when it is a total loss without regard to the policy's limit of liability.  Few companies offer this coverage to homeowners.

The act of misrepresenting, falsifying or exaggerating a fact or omission of fact as part of an insurance transaction including acts relating to claims, application for insurance and premium to obtain lower premiums or higher claims payments that would not otherwise be made. Common types of insurance fraud  are providing false information on applications, staged accidents, exaggerated injuries, and inflated medical bills.

A person or organization covered by an insurance policy.

Coverage which protects an insured against claims resulting from certain injuries sustained by a claimant and provides a legal defense if the insured is sued as a result of a covered loss.

The maximum amount of protection purchased by the insured for a specific coverage.

An industry standard known as reducing or eliminating your policy deductible if the at fault party can be identified and has valid liability insurance. 

The insured shown on the declarations page.

A single accidental event, or exposure to a condition, which causes injury or damage during the policy period.

Automobile parts from the original vehicle manufacturer or the supplier of the original parts.

An electric copy of your policy documents online. 

No-fault coverage which covers medical expenses, lost wages, and funeral expenses as a result of a covered loss  for an insured, passenger, household member or a pedestrian. 

Your legal obligation to compensate others for property damage or personal injury caused by an accident.

Movable property or belongings exclusive of land and buildings such as furniture, clothing, stereo equipment, televisions, sports equipment, and kitchenware.

Coverage with high limits, which provides additional liability coverage over and above another insurance policy.

A contract between an insured and an insurer.

A change made to your insurance policy during the period the policy is in force.

A person or group who is the Named Insured and in whose name an insurance policy is held.

The term of duration of the policy, encompassing the time between the exact hour and date of policy inception and the hour and date of expiration.

The state of a vehicle before an accident, including damage not related to the accident, mileage, options, and other factors.

The price an insured pays for an insurance policy.

Documentation provided to prove valid insurance with an insurance company. 

An estimated cost of the premium that will be charged for a policy based on specific information including the vehicles to be insured, the drivers, and their driving records.

The date your current insurance policy expires and the date your renewed policy would begin.

A type of Homeowners Coverage which protects Renters of apartments, condominiums, or single-family homes  from certian losses to their personal property and from some claims of damages or injury to others for which the insured is legally liable.

Damaged property where ownership is taken over by the insurance company after payment of a claim.

Equipment that does not come standard from the original manufacturer, such as a hydraulic lift, snowplow, wheelchair lift, winch, or a camper shell.

A certificate mandated by the state to verify that an individual is maintaining automobile insurance liability coverage.

A pre-determined stated dollar amount or limit on coverage of particular items regardless of the other policy limits such as  jewelry, firearms, furs, and watercraft.

In California if you don’t have collision coverage, this coverage pays for repairs to your car or the cash value of your car (whichever is less) up to $3,500 if it’s damaged by an identified uninsured motorist.

Coverage which pays for an injury caused by an uninsured or underinsured driver, for which an insured  is entitled to recover compensation.

Coverage which pays for repairs or the actual cash value of your auto, whichever is less,  if it’s damaged by an at fault uninsured motorist. UMPD coverage varies by state and may be subject to a deductible, a limit of liability and/ or identification of the uninsured motorist.