Glossary of Insurance Terms
Insurance terms can be confusing.
What does it all mean? We've provided you with a glossary of terms to help you understand your coverage. Click on the word to see the definition.
The amount equal to the replacement value of damaged property minus an allowance for depreciation (See also Replacement Cost Coverage).
Insurance that covers you should you injure or kill someone in an auto accident.
Coverage that pays for damage to your vehicle caused by collision with another auto or object.
Coverage that pays for damage to an insured’s vehicle caused by incidents other than collision, including fire, severe weather, vandalism and theft. Also called Other-Than-Collision coverage.
The portion of a claim paid by the insured prior to payment by an insurance company. The deductible is set forth and agreed upon in the policy.
A deduction or credit in premium given to an insured for actions or items that lower risk.
A form attached to an insurance policy that changes the policy’s coverage, terms or conditions. An endorsement could expand or reduce the amount of coverage you have.
A policy that provides property insurance coverage for your valuables and protects your valuables against perils not covered by your homeowners policy.
A deliberate act committed by or against insurance companies for financial gain. Examples of fraud include intentional actions to create an accident, injury or incident that would be covered under an insurance policy or when a policyholder exaggerates a claim or provides false, incomplete or missing information to the insurance company.
Coverage that pays the difference between what you owe on a car and what your insurer pays if your car is totaled in an accident.
The insurance that protects your home and possessions in case of damage or destruction.
Compensation to a victim for a loss.
A device by which a company assumes the risk of potential loss in exchange for a premium paid by an individual or entity.
Insurance that covers damages for which you are responsible.
(See Bodily Injury Liability and Property Damage Liability)
The maximum amount of damages that the insurer is responsible for as specified in your policy.
Claims made by individuals in a particular underwriting class.
The amount of money a buyer on the open market would pay to purchase your home.
Coverage that pays medical bills for injuries to you or your passengers if in an auto accident.
Coverage that allows a claimant to collect from his own insurance company in the case of an accident, regardless of who was responsible for damages. No-fault insurance is not offered in all states. Maryland, New Jersey and Pennsylvania are no-fault states. North Carolina, Tennessee and Virginia are not.
Endorsement to an auto insurance policy describing the no-fault benefits that are provided.
The price paid by an insured for insurance coverage for a set period of time.
Insurance that protects you should you damage another person’s property in an accident.
The cost of a unit of insurance.
The process of assigning specific costs for specific coverages for an underwriting group.
A homeowner’s policy adapted to the needs of individuals who rent. Also called Tenant's Insurance.
Coverage where the insured receives an amount equal to the replacement value of damaged property. Replacement Cost Coverage is usually purchased for an additional premium.
An additional premium charge for increased level of risk, such as a violation, license suspension or accident.
See Renter’s Insurance.
A policy that provides coverage for losses above the liability coverage offered under other policies.
Coverage that protects you if you are in an accident in which damages exceed the coverage held by an at-fault motorist.
The process by which a company identifies risks and classifies them so that appropriate rates can be set.
An employee of the insurance company who has training and experience in identifying classes of risk and determining appropriate rates.
Coverage that protects you should you be in an accident in which an uninsured driver is at fault.