Insurance Glossary
 

Here are the Terms and Vocabulary You Should Know

When you're doing your auto insurance research, it will help to have a solid grasp of insurance terminology. Here are definitions of the most commonly used terms in the industry.

Accident Forgiveness - this is a program whereby drivers who have not had at-fault accidents in the past five years will not incur a surcharge on their premiums for their next at-fault accident. This varies by state, so find out the specifics when doing your auto insurance research.

Actual Cash Value - the fair market value of your vehicle or replacement cost less depreciation.

Bodily Injury Liability - covers damages for bodily injury or death resulting from an accident in which you are at fault. Also covers your legal defense. You will find in your research that most states require certain levels of this coverage to drive legally.

Deductible - the portion of your claim that you pay out-of-pocket. Higher deductibles will lower your premiums.

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Insured - the party who is insured or the policyholder.

Premium - the cost of the insurance policy in exchange for coverage.

Quote - an estimate of the premium you will be charged for protection based on information you provide when requesting the quote. On our site, you can receive information on car protection and up to five free quotes on policies.

Rental Reimbursement - optional protection that will help pay for the costs of a rental car when your car is being replaced or repaired as a result of a covered accident or loss. When looking at insuring your vehicle, make sure you find out the daily limits of this plan.

Underwriting - the process a provider conducts to determine if it will provide coverage to an applicant.

Uninsured motorist - pays for your injuries caused by an uninsured driver. Some states also allow this coverage to pay for damages caused by an uninsured driver. Visit your state's department of insurance website when looking for more information.

Still confused? Check out our auto insurance FAQs page.

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