Plain-English definitions
Car insurance terms, translated.
The vocabulary you will see on quotes, policies, and state requirement pages — defined in everyday language. Where a deeper guide exists, the definition links to it.
A
- Actual cash value
- A common way insurers value a vehicle: roughly what the vehicle was worth just before the loss, considering depreciation. The policy controls how it is calculated.
- Collision and totaled vehicles →
- Adjuster
- The person an insurer assigns to investigate a claim, review the facts, and help determine what the policy may pay.
- At-fault
- The driver a determination or agreement identifies as legally responsible for an accident. Fault rules vary by state.
B
- Bodily injury liability
- The part of liability coverage that helps pay for injuries to other people when you are found legally responsible for a covered accident.
- How liability coverage works →
C
- Claim
- A request to an insurer for payment or a covered service after a loss that may be covered by the policy.
- Collision coverage
- Helps pay to repair or replace your own vehicle after a crash with another vehicle or object, subject to your deductible and policy terms.
- How collision coverage works →
- Comprehensive coverage
- Helps pay to repair or replace your own vehicle after many losses that are not crashes, such as theft, fire, hail, or animal damage.
- How comprehensive coverage works →
- Coverage limit
- The most a policy will pay for a covered loss under a given coverage. Amounts above the limit are generally your responsibility.
- What to compare besides price →
D
- Declarations page
- The policy summary page that lists your coverages, limits, deductibles, vehicles, drivers, and premium. A useful page to keep handy when comparing quotes.
- Quote preparation checklist →
- Deductible
- The amount you may pay toward a covered loss before the insurer pays the remaining covered amount, most commonly on collision and comprehensive coverage.
- How deductibles work →
E
- Endorsement
- A change added to a policy — sometimes called a rider — that adds, removes, or modifies coverage.
- Exclusion
- Something the policy does not cover. Exclusions are listed in the policy, so reading them is one of the most useful things you can do before a loss.
F
- Full coverage (informal term)
- A casual phrase, usually meaning liability plus collision and comprehensive. It is not a standardized insurance product, so ask exactly which coverages, limits, and deductibles it refers to.
- Why the phrase is informal →
G
- Gap insurance
- An optional coverage that may help with the difference between a vehicle's value and what is owed on it after a total loss. Availability and terms vary.
- Grace period
- A short window after a payment due date during which a policy may continue without lapsing, if the insurer offers one. Late payments can still carry consequences, so confirm your policy's rules.
L
- Liability coverage
- Helps pay for injuries and property damage you are found legally responsible for causing to others, up to the policy limits.
- How liability coverage works →
M
- Medical payments coverage
- An optional or required (depending on the state) coverage that may help pay medical costs for you and your passengers after an accident, regardless of fault.
P
- Personal injury protection (PIP)
- Coverage, required in some states, that may help pay medical costs and some other accident-related expenses for you and your passengers. Availability and scope vary by state.
- Policyholder
- The person or entity the policy is issued to. Named drivers and covered vehicles are listed separately in the policy.
- Premium
- The amount you pay — monthly, quarterly, or annually — for the policy. Premium is only one part of comparing policies; limits, deductibles, and exclusions matter too.
- Property damage liability
- The part of liability coverage that helps pay for damage you cause to other people's property, such as their vehicle, in a covered accident.
- How liability coverage works →
Q
- Quote
- An insurer's offer to provide coverage at specific limits, deductibles, and price, based on the information you give. Quotes can change if the information changes.
- Get ready to request quotes →
R
- Rental reimbursement coverage
- An optional coverage that may help pay for a rental car while your vehicle is being repaired after a covered loss. Daily limits and day counts vary by policy.
- Roadside assistance coverage
- An optional add-on that may help with services such as towing, a jump start, a flat tire, or a lockout. Service limits vary by policy.
S
- SR-22
- A certificate some states require an insurer to file to confirm that certain coverage is in place, usually after a serious violation or other event. Filing rules vary by state.
U
- Uninsured motorist coverage
- Can help cover your injuries when an at-fault driver has no liability insurance, up to your limits.
- How UM/UIM coverage works →
- Underinsured motorist coverage
- Can help cover your injuries when an at-fault driver has liability insurance, but not enough to cover the harm they caused, up to your limits.
- How UM/UIM coverage works →
These definitions are educational summaries written for this site. They are not policy text, and they are not legal definitions — your policy and your state's rules control the specifics.
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