Glossary

Car insurance glossary

The terms on your policy and in quotes, explained in a sentence or two. Definitions are general; your policy's own definitions control.

Actual cash value (ACV): What your car was worth just before the loss, which accounts for age, mileage and condition. Most policies pay ACV for a totaled car.
At-fault: The driver found responsible for causing a crash. Fault rules affect whose insurance pays and can affect future premiums.
Bodily injury liability: Pays for injuries you cause to other people, up to your policy limits.
Claim: Your request to the insurer to pay for a covered loss.
Collision coverage: Pays to repair your car after it hits another vehicle or object, regardless of fault, minus your deductible.
Comprehensive coverage: Pays for non-collision damage to your car, such as theft, vandalism, hail, flood, fire or hitting an animal, minus your deductible.
Declarations page: The summary page of your policy listing drivers, vehicles, coverages, limits, deductibles and premium.
Deductible: The amount you pay toward a collision or comprehensive claim before the insurer pays the rest.
Endorsement: A change or addition to your policy that adds, removes or alters coverage.
Exclusion: Something the policy specifically doesn't cover.
Gap coverage: Pays the difference between what you owe on a loan or lease and the car's actual cash value if it's totaled.
Lapse: A period when you have no insurance in force, often because a payment was missed. It can raise future premiums.
Lienholder: The lender with a financial interest in a financed car. Lenders usually require collision and comprehensive coverage.
Medical payments (MedPay): Pays medical costs for you and your passengers after a crash, regardless of fault, up to a limit.
Named insured: The person or people named on the policy as the policyholder.
No-fault state: A state where each driver's own personal injury protection pays their medical costs first, regardless of who caused the crash.
Non-renewal: When an insurer chooses not to renew a policy at the end of its term. States set notice requirements.
Personal injury protection (PIP): Pays medical costs, and sometimes lost wages, for you and your passengers regardless of fault. Required in some states.
Premium: The price you pay for the policy for a set period, usually six months or a year.
Property damage liability: Pays for damage you cause to other people's vehicles and property, up to your limit.
Rental reimbursement: Pays for a rental car, up to daily and total limits, while your car is repaired after a covered claim.
SR-22: A certificate of financial responsibility that some states require an insurer to file after certain violations. It isn't a type of insurance.
Subrogation: When your insurer pays your claim and then seeks repayment from the at-fault party or their insurer. You may get your deductible back.
Telematics: A program that tracks driving habits through an app or device and may change your premium based on how you drive.
Total loss: When repairing a car would cost more than it's worth, or more than a state-set threshold, so the insurer pays its value instead.
Underinsured motorist coverage (UIM): Covers you when the at-fault driver's liability limits aren't enough to pay for your injuries or damage.
Uninsured motorist coverage (UM): Covers you when the at-fault driver has no insurance, or in some hit-and-run cases.