Additional Insurance – Extra coverage used in conjunction with existing coverage. Check your current policy for terms that address additional insurance – not all policies allow it.

Additional Insured – Describes the person or groups of persons other than the named carrier of a single insurance policy. Example: the passengers of a car can be additional insured persons.

Applicant – The individual who applies for insurance coverage.

Application – A form used to collect prospective insurance holder information and determine eligibility.

Appraisal – The value of a vehicle’s damage, cost to repair, or complete loss.

Auto Loan/Lease Coverage (Gap Coverage) – In a total loss, this covers the value between what’s owed on a vehicle and what the vehicle was worth at the time the loss occurred. Not all vehicles are eligible for coverage and not all states honor this coverage.

Basic Limits – The least expensive and least protective insurance allowed by law. Normally restricted to liability.

Bodily Injury – Injury inflicted onto a person’s body brought on by an accident.

Cancellation – A policy’s termination prior to its expiration date. Can be initiated by the policy’s holder or the policy’s insurance company.

Claim – A request for funds to cover loss(es); payable through an insurance policy.

Collision Insurance – Covers losses incurred from a collision with another vehicle or object.

Comprehensive Coverage – Covers all vehicular losses or damages except that which was caused by collision or loss of composure.

Compulsory Auto Injury Laws – Prevents drivers from operating a vehicle without demonstrating an ability to pay for costs associated with vehicular accidents.

Conditions – Describes what a policy will and will not cover. Also describes what a policyholder must and must not do in order to remain covered.

Covered Persons – Individuals covered by an insurance policy.

Covered Autos – Vehicles used in place of a damaged vehicle. These vehicles must be identified in a holder’s policy.

Damages – The value legally owed to another individual suffering from an injury or loss.

Declarations – Detailed sections of an insurance policy describing the policy holder and his or her exact coverages.

Deductible – An amount that a policy holder must pay on an existing or pending claim before the insurance pays the rest. Large deductibles generally lower premiums.

Depreciation – The decrease of a vehicle’s value due to obsolescence or use.

Drive-In Claims Services – Analyzes vehicular damages and adjusts claims according to losses incurred.

Effective Date – The date in which an insurance policy becomes active.

Electronic Equipment Endorsement – Covers all electronic equipment inside a car except radar detectors. Types of electronic equipment can be permanently installed or permanently installed with an anti-theft design. Also covers losses to items used in conjunction with the electronic equipment.

Endorsement – Covers items that are not normally covered and that are specific to a vehicle’s operator. Also known as an amendment that modifies the terms of a policy.

Exclusion – Endangerments, individuals, properties, and places that an insurance policy does not cover. Should be fully described in the policy’s contract.

Expiration Date – The date in which coverage from an insurance policy ends.

Financial Responsibility Clause – Makes sure that an insurance policy follows the financial responsibility laws enforceable in the state in which a driver operates an insured vehicle. Includes Canadian provinces.

Glass Insurance – Covers the cost of repairing broken glass incurred from an accident or malevolent event.

Insurance Department – Enforces a state’s insurance code and laws. Also supervises and licenses insurance companies and their agents.

Insured – An individual covered by an insurance policy.

Insurer – The company from which an insurance policy comes from.

Insuring Agreements – Describes what’s covered in an insurance policy.

Liability Insurance – Insurance that covers losses and injuries caused by the policy holder.

Limit of Liability – Caps the coverage value an insurance company will pay for a loss.

Loss – The devaluation of an insured vehicle. Also the dollar amount pursued in a claim or the dollar amount of a paid coverage.

Loss Payable Clause – Allows an insured individual to pass financial responsibility onto the insurance company for a loss incurred from a 3rd party.

Loss of Use Insurance – Compensates an insured driver for the loss of his or her vehicle.

Medical Payments Insurance – Covers medical, surgical, hospital, and/or funeral costs up to a limit and irrespective of liability.

Mutual Insurance Company – An insurance company that lacks capital stock, but is policy holder owned and controlled.

Named Insured – The person or group of persons in which an insurance policy protects.

No-Fault Insurance – Pays accident victims for medical costs and income losses irrespective of fault.

Non-Renewal – Insurance coverage that is not available after expiration.

Occurrence – Exposure to an event that results in injury, financial loss, or damage to property.

Partial Loss – Type of loss that affects only a part of an insured vehicle and not the entire car.

Payroll Deduction – Amount withheld from an employee’s earnings and applied toward an insurance policy’s premium.

Peril – The source of a financial loss or injury.

Personal Injury Protection (PIP)- N – Pays non-insured accident victims for medical costs, income losses, and living costs.

Policy – An insurance contract.

Policy Anniversary – The date in which an insurance policy requires reinstatement to remain effective.

Policyholder – The individual named as an insurance policy’s owner. Also the individual responsible for paying the policy’s premiums.

Premium – An annual or semiannual cost of insurance.

Property Damage – Palpable damage to a vehicle.

Protection – Intended to compensate losses incurred from damage or injury.

Provisions – Explains what an insurance policy covers and the conditions of that coverage.

Rate – The cost of insurance used to determine premiums.

Rating Bureau – An organization that calculates and rates insurance risk, and estimates future losses and adjustment costs.

Recovery – Dollar amounts or items retrieved via subrogation- salvage- or reinsurance.

Reinstatement – Puts a lapsed insurance policy back into full effect as though it never ended.

Renewal – Insurance that’s used in place of an expired policy.

Rental Reimbursement – Reimburses insured drivers for having to rent and operate a car when a loss makes the insured’s vehicle inoperable. This reimbursement is limited to a specified amount and/or duration.

Safe Driver Plan – Adjusts rates according to a policy holder’s driving record. Good driving records lower rates while bad driving records raise rates.

Subrogation – When an insurance company collects the cost of a loss from another individual or the insurance company of the individual who caused the loss.

Towing/Labor – Type of coverage the pays for towing expenses and on-site road repair expenses. It does not however, cover parts expenses.

Underwriting – The act of analyzing, accepting, or declining insurance risks (and then assigning premiums to accepted risks).