Insurance Terminology
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A
Actual Cash Value
Also referred to as ACV. The fair market value of property calculated using replacement cost less depreciation.
Actuary
A person who calculates insurance risks and premiums.
Adverse Carrier
A term used to refer to the other party’s insurance company.
After-market Parts
A term used to refer to parts made by a company other than by the original manufacturer.
Agent
A person who acts as a representative for a company and sells insurance.
Appraisal
A process used to determine the value of property, or the extent of damage. This process is usually performed by an impartial expert.
Arbitration
The process of settling a dispute through an impartial party.
Assigned Risk
A driver who does not qualify for insurance in the regular market and as a result must get coverage through a state assigned risk plan.
At-Fault
The party that is legally responsible or liable for damages in an automobile accident.
Auto Insurance
Insurance which provides protection from losses resulting from owning or operating an auto. Insurance covers losses to the insured’s property as well as losses for which he is liable as a result of operating or owning an auto.
B
Binder
A temporary agreement of coverage until the insurance policy is issued.
Bodily Injury
An injury sustained by an individual.
Bodily Injury Liability Coverage
Pays for damages for bodily injury or death resulting from an automobile accident for which you are at fault as well as provides legal Defense. This coverage is subject to the policy limits and conditions within your policy.
C
Cancellation
The termination of an insurance policy by the named insured or company before the policy expiration date.
Claim
Any demand or request of payment under the terms of an insurance policy.
Claims Adjuster
An individual who is responsible for the investigation and settlement of a claim.
Claimant
The individual presenting a claim.
Clue Report Comprehensive Loss Underwriting Exchange Report
This report provides claim history as reported by participating companies.
Collision Coverage
Pays for damage to an insured vehicle as a result of upset or impact with another vehicle or object.
Comprehensive Coverage
Pays for damage to an insured vehicle as a result of theft, flood, and vandalism or other covered perils as defined in your policy. This coverage is subject to the policy limits and conditions within your policy.
Customized Vehicle
Any vehicle that has been modified or has equipment or accessories that are not normally provided or installed by the original manufacturer.
D
Declaration
The part of a policy that displays the name, address, and the property being insured. Also shown are the location and description of the property, as well as the policy period and amount of coverage.
Deductible
The amount of a claim you pay out of your pocket.
Depreciation
A loss of value in property as a result of wear, tear, and age.
E
Endorsement
An addition to your policy and can also refer to a change made during the time period the policy is in force.
Estimate
A calculation of the cost to repair damages to property.
Exclusion
Limitations found within a policy that exclude or omit coverage for certain losses or perils.
Expiration Date
The date found on your declaration page that indicates when coverage ends.
F
FS-1 Form
Form obtained from an insurance company that is licensed to do business in North Carolina that shows proof of insurance.
G
Gap Insurance
A policy or coverage that comes into play when a vehicle is totaled or stolen. Gap coverage takes over when the amount that is owed to a financial institution exceeds the actual cash value of the vehicle.
I
Inception Date
The date found on your declaration page that indicates when coverage begins.
Inspection
The act of inspecting and verifying the physical condition of a vehicle or property.
Insurance
A system that transfers loss to an insurer in exchange for a payment of premium.
Insurance Fraud
The act of falsifying the facts of an accident to an insurance company to obtain payment that would not have been otherwise made.
Insured
A person or individual covered by an insurance policy.
Insurer
A company that provides insurance coverage.
L
Liability
A legal obligation or responsibility for the injury or damage suffered by another individual.
Liability Coverage
Insurance that provides coverage for claims as a result of injuries or damages to individuals or their property.
Lienholder
An organization that holds a financial interest in property.
Limit
The maximum amount as specified within your policy to which your company will provide protection.
Loss
Any measurable cost of property damage and or bodily injury that has been incurred by an individual.
Loss of Use
Compensation to a third party claimant for losses incurred as a result of the inability to use property which has been damaged in an accident.
M
Medical Payments Coverage
Pays for medical expenses incurred as the result of an auto accident. This coverage is subject to the policy limits and conditions within your policy.
Misrepresentation
To represent written or verbal statements that are false or misleading
Motor Vehicle Report
A report listing accidents and violations used by insurance companies to verify information provided by applicants.
Multi-Car Discount
A discount for individuals who insure more than one vehicle on a policy.
N
Nation Safe Drivers
One of the largest suppliers of towing and roadside assistance as well as additional insurance related products.
Negligence
The failure to exercise care as expected by a reasonable person in a similar situation.
Non-Renewal
Occurs when an insurance company chooses not to renew a policy.
P
Peril
A source of danger that can cause a loss to occur.
Physical Damage
Damage to property
Policyholder
The person listed on the declaration page of an insurance policy.
Premium
Monies paid in exchange for insurance coverage.
Property Damage Liability Coverage
Pays for damages to non-owned property as a result of an accident for which you are at fault and also provides legal defense. This coverage is subject to the policy limits and conditions within your policy.
Q
Quote
A listing of premium charges given to an individual based on information provided such as vehicles, drivers, and their driving records.
R
Renewal Date
The date your renewed policy begins.
Rental Imbursement
An optional coverage that pays a specified amount towards a rental vehicle when your covered vehicle is disabled as a result of a covered accident.
Roadside Assistance Coverage
An optional coverage that provides services such as tire change, locksmith services, and battery jump-start.
S
Salvage
Damaged property claimed by an insurance company after the payment of a claim.
Subrogation
The process of seeking payment including any deductible from the liable party after your company has settled a claim at your request.
T
Third Party
A Person not party to an agreement but holds an interest in that agreement.
Total Loss
Property that has incurred damage to an extent that repair is unreasonable or not economically practical
Towing and Labor Coverage
An optional coverage that pays a specified amount if your vehicle is towed or requires roadside assistance.
U
Umbrella
Provides higher limits of coverage above the limits provided by an individual’s auto and homeowner’s policy.
Underwriting
The process used by a company to determine if insurance coverage will be afforded.
Uninsured Motorist Coverage
Pays for property damages and or bodily injury caused by an uninsured motorist. This coverage is subject to the policy limits and conditions within your policy.
Underinsured Motorist Coverage
Pays for damages that exceed the amount of coverage carried by a driver who has insufficient coverage amounts to cover your damage. This coverage is subject to the policy limits and conditions within your policy.
V
Vandalism
The malicious destruction of property.
Vehicle Identification Number
A 17 digit number assigned to vehicles manufactured in the United States after 1980