UPDATED: Mar 13, 2020
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At CarInsurance.org, we believe in educating consumers to help them make smart decisions when searching for car insurance quotes online. So, we’ve provide you with this comprehensive auto insurance glossary of to help you with any questions you may have while comparing car insurance quotes online.
– A –
Accident Forgiveness: In the case of accident forgiveness, an auto insurance company will not add a surcharge or increase a customer’s premium for an at-fault accident if that customer has gone five years at-fault accident-free.
Accidental Death Benefit (ADB): This is a supplementary life insurance policy added to some car insurance policies to be paid in the case of accidental death during a car accident.
Act of God: An act of nature that is beyond control of a human, such as floods, earthquakes, tornadoes, storms, etc.
Actuary: A trained and educated statistician who calculates risks and premiums. They determine how to keep an insurance company profitable while still being able to pay out claims. In essence, they compare the incoming premiums with estimated claims.
Additional Interest: A separate entity, such as a person or company that has financial interest in insuring your vehicle and being added to your auto insurance policy. That is, a co-signer or financial institution which is financing your car. These individuals would be added to the list of additionally insured.
Adverse Carrier: This is a term used in contracts and dialogue to refer to another party’s insurance carrier.
Appraisal: Performed by a third-party expert, this is the act of determining the extent of damage, cost of damage, and value of a vehicle or property.
Arbitration: When two parties are involved in an accident, they can go to arbitration to settle their dispute instead of court. The decision is legally binding, though not judged by a court.
Assured: A synonym for an insured driver or auto insurance policy holder.
– B –
Blue Book: This is a book published by Kelley, which sets the generally accepted value for a vehicle based on year and condition.
Bodily Injury: Any physical injury incurred by someone during an auto accident.
– C –
Carrier: Another name for an auto insurance company or auto insurance carrier.
Catastrophe: A natural disaster such as hurricane, tornado, earthquake, etc.
Claim: An official request for payment for damages as the result of an accident, vandalism or other insured event.
Claim Adjuster: The person or agent that will investigate an auto insurance claim.
Claimant: The person making an auto insurance claim.
Comprehensive Coverage: This type of auto insurance will cover any damage to a vehicle or person that is not the result of a collision, such as vandalism.
– D –
Deductible: A set amount listed in an auto insurance policy that is to be paid by the customer during a claim. That is the amount a customer will pay toward damages. For example, if the damages to your car are $1500 and you have a $500 deductible, the customer must pay the first $500, and the insurance company covers the remaining $1000.
Depreciation: The general decrease in the value of a vehicle due to normal wear and tear.
– E –
Endorsement: A document or addendum which alters or amends an auto insurance policy.
Estimate: The cost to repair damage to a vehicle, typically in the form of a written estimate provided by an independent party.
Exclusion: Any event, person or other damage that is not covered by the auto insurance policy.
– F –
Field Adjuster: This is a mobile insurance adjuster that typically does not work in an office, but rather in-person, in-the-field. They perform personal meetings, negotiations, inspections and investigating claims.
Fraud: An untrue statement or claim meant to cheat the insurance company.
– I –
Inception Date: The date specified in an insurance policy in which it goes into effect.
Indemnity: A principle of insurance which provides that when a loss occurs, the insured should be restored to the approximate financial condition occupied before the loss occurred, no better, no worse.
Independent Adjuster: A third-party individual who estimates the extent of financial damages on behalf of an insurance company.
– L –
Liability Insurance Coverage: Coverage in an insurance policy that will pay for the property and medical costs of the victimized party during a car accident in which the policy holder is at-fault.
Limits of Liability: The maximum limit that an insurance company will pay out for property or medical damages covered by a policy.
– M –
Medical Adjuster: Employed by the insurance company or a third-party, this person reviews all medical claims to an insurance policy.
Multi-car discount: A discount provided by some auto insurance companies when a customer has more than one vehicle insured with the company.
– N –
No-Fault Insurance: A policy offered by some auto insurance companies that will cover property and medical damages despite who was at fault during an accident.
– P –
Per Occurrence Limit: The maximum amount of money an auto insurance company will pay out for a single occurrence or single event.
Per Person Limit: The maximum amount of money an auto insurance company will pay out for medical coverage for a person for each single occurrence.
Policy: The formal contract or document which outlines a person’s coverage with an auto insurance company.
Premium: The set price of an insurance policy paid at a specific interval of time.
– R –
Rental Reimbursement: Offered by some insurance companies, this will reimburse a policy holder for the cost of renting a vehicle while their own vehicle is being repaired.
– S –
Staff Adjuster: A person employed by a customer’s auto insurance company that investigates claims.
Subrogation: The act of recouping costs from the someone other than the insured.
– T –
Term: The set period of time which an insurance policy is in effect.
– V –
Vehicle Identification Number (VIN number): A 17-digit number on all vehicles used to identify that specific vehicle it to authorities, insurance companies and others. This number is on all vehicles manufactured after 1980.