The actual cash value, or ACV, is the actual value of your vehicle in dollars. This is independent of what you purchased the car for or what you may still owe on it. A vehicle loses value over time as miles are added to it and it experiences wear and tear or damage. The actual cash value is determined by subtracting that depreciation from the vehicle’s original cost.
A person, party, or entity that has a vested ‘interest’ in your vehicle, aside from the driver. Most often, this refers to a bank or lender who gave you a loan to purchase the car. Additional interested parties want to know that your vehicle is insured to make sure the asset is being protected. They’ll receive a payout in the event of a total loss from your insurer.
An additional insured party is someone other than the primary policyholder who has partial ownership over the insured vehicle. This is often the case with leased vehicles, in which the leasing company is the vehicle’s owner. In the event of a total covered loss, they’re the ones who will receive a payout from your insurer.
The form or forms filled out by an individual who is looking to purchase an insurance policy. The application is designed to not only help the insurance company accurately price the policy for the applicant, but also to determine if they’re viable candidates for receiving insurance coverage at all.
An at-fault accident refers to an accident in which the driver in question is considered at fault—either in whole or in part— for the incident in question. It’s important to note that not all accidents that are considered at-fault are chargeable accidents. Chargeability (whether or not your insurance policy premium increases due to an accident) depends on the rules of your policy and state regulations.
In the event of an incident, the covered party files an auto insurance claim with their insurer. This claim is a request from the insured person for the insurer to make a payout based on their policy’s terms. The insurance company then processes this claim to determine if coverage will apply and how much money they will pay out to each involved party under the terms of the policy.
A temporary contract designed to show proof of auto insurance coverage until your permanent policy is finalized and put into effect.
A portion of your auto insurance coverage designed to protect you from financial liability for bodily injuries experienced by other drivers or pedestrians in incidents in which you are found to be legally at fault. In covered incidents, your insurer will cover losses to other parties (up to the policy limit) that can include medical expenses, pain and suffering, lost income, and other costs associated with injuries sustained in an accident.
The act of carrying multiple insurance policies with one insurance company. Companies often offer bundling discounts to encourage increased brand loyalty. For example, you might bundle your home, automobile, and motorcycle insurance with a single company to earn a multi-policy discount from the insurer.
Suspension of coverage as a result of non-payment of premiums, missing documents, or other legally valid reasons. Cancellations can typically be reinstated if the reason for cancellation is cured within a reasonable time frame.
The insurance company that issues your policy and underwrites it, delivering payouts in the event of covered incidents.
Any liability or loss that occurs as a result of an accident or incident
This category of insurance protects against liability resulting from negligence. Liability auto insurance coverage is a type of casualty insurance.
A chargeable incident is an incident that’s reported to your insurance and involves you being found at fault, summoned to court, or assessed a ticket. In most cases, if you’re found to be 51% or more at fault and the claim involves a dollar amount higher than a certain threshold, the accident or incident is considered chargeable by your insurance provider and your premiums will likely increase at your next renewal.
The person who makes an insurance claim to an insurance carrier. In auto insurance, companies commonly refer to all involved parties other than their own insured as claimants.
This type of auto insurance coverage pays to repair your vehicle (up to its Actual Cash Value) in the event of an accident resulting from a collision with a vehicle or other object.
An auto insurance policy has a combined single limit if it features a single dollar amount that covers both property damage and bodily injury to all parties in the event of an incident. The other form of policy is a split limit policy, which has separate individual limits for bodily injury per accident, bodily injury per person, and property damage per accident rather than one overall limit.
This type of auto insurance coverage is designed to cover your vehicle against damage that occurs for reasons other than a collision. This might include weather damage, vandalism, natural disasters, fires, or theft.
A database of claims that insurance companies can use to see your claims history, often accessed when underwriting or assessing your policy rating. The database includes information such as incident type, date, and amounts paid, as well as information on the driver and vehicle involved.
Any loss that is considered to fall under the coverage of your insurance policy, whether damage to your vehicle, bodily injury, or other covered costs.
An insurance score that uses your credit history to assess you as an insurance risk. It differs from other insurance risk assessments that might take into account other information, including driving history. All states except for California, Hawaii, and Massachusettes allow the use of credit-based insurance scoring.
A document incorporated into your auto policy that displays basic summary information about the policy, including insurer, period of coverage, description of the covered vehicle(s) and driver(s), premium amount, and coverage amounts.
The amount the insured (you) must pay before your insurer must pay in the event of a covered loss. For example, if your deductible is $500, you’ll have to pay that much in the event of a covered loss before your insurer covers the rest. The most common coverage types that feature deductibles are comprehensive, collision, and occasionally UMBI and UMPD depending on the state. Liability insurance does not have a deductible.
An up-front down payment that’s due with the application for an insurance policy. Generally, this deposit is equal to or more than a single month’s premium (sometimes less, but rarely)— and is applied to the total cost of your policy.
Describes a vehicle’s loss of value due to time, use, and wear & tear. Insurance carriers use this to determine the actual cash value of your vehicle at a given time. This assessment is impacted by total miles driven, vehicle condition, model year, and other factors.
A reduction in premium due to qualifying affiliations, circumstances, or driver characteristics. For example, you might receive a discount thanks to your driving record, or for being a good student, etc.
The date that your insurance policy begins coverage. Each subsequent renewal term will have a new effective date, and you'll receive new ID cards that reflect that date.
A service that helps cover unexpected emergencies and support needs. The most common covered uses include battery jumps, keys locked in the car, towing in the event of a breakdown, emergency tire service, and emergency gas delivery. This is an option that you can opt to include in your coverage policy, though it will likely increase your premium.
Also known as a rider, this is an agreement that’s attached as an addition to your policy and either limits or expands on the benefits contained in that policy.
A person that you explicitly exclude from coverage in your policy. If an excluded driver uses your vehicle, whether you allow them to or not, any accident or incident that occurs will not be covered. Some states don’t allow for excluded drivers in policies because they result in the potential for uninsured drivers on the road.
Any incident or circumstance that your policy will not cover. Excluded drivers are the most obvious ones, but there are also many other circumstances that will not be covered, so be sure to read the policy language carefully and ask any questions you may have before you purchase a policy or get into an accident.
The date at which your policy expires. The insured must accept and pay a renewal offer to continue coverage past this date.
Either a clause or endorsement added to a policy that provides additional coverage outside of the basic coverage already included in the policy.
A minor traffic incident that occurs at low speed and usually involves either minimal or no damage to the bumper or fender of involved cars. While this is not an official insurance term, it might be useful for describing the damage to your insurance company post-accident.
Law requiring any owner of a vehicle to carry and show proof of their financial ability to pay for any auto-related losses. In most states, this translates to proof of insurance coverage with a minimum liability amount. However, some states allow drivers to be self-insured or carry what’s known as a financial responsibility bond—proof of their ability to self-pay for auto-related losses.
A general term that refers to car insurance that includes comprehensive coverage and collision coverage (covering you and your vehicle in the event of an accident) as well as liability coverage (covering damage or injury to others and their vehicles). It’s important to note that full coverage doesn’t mean you’ll be covered against absolutely anything—such coverage doesn’t exist.
Insurance coverage that pays for the difference between what your car is worth (Actual Cash Value, or ACV) and the amount you still owe a lender on the car loan. Some gap insurance coverage policies will also cover your deductible amount.
The place where an insured vehicle is most often parked. This is usually the zip code of your home, and affects your car insurance rates. If your car is most often parked somewhere other than your home, you must notify your insurance provider so they can rate your policy accordingly.
A discount awarded to full-time students who maintain a "B” grade average or higher. This discount and associated rules may vary from provider to provider.
A period during which the insured may still make a premium payment after the due date without losing coverage. Outside of this grace period, insurance carriers will issue a cancellation and your coverage will not be in force. Many will still take payments after the date shown on the cancellation notice to reinstate your policy, but this will still result in a lapse in coverage. The best way to avoid this is to set up automatic direct payments.
A driver who is assessed by an insurance provider to be at higher-than-normal risk of submitting claims. This assessment will usually result in higher insurance premiums. Events or circumstances that could lead to an insured being considered high-risk include:
Vehicles with a reputation for being easily damaged
Highly valuable vehicles likely to be targeted by thieves
Cars insured in areas where vehicle-related crime or traffic accidents are more common than average
The general, overarching principle that informs auto insurance policies. Indemnity describes the idea that an insurance policy should bring the insured who submits a claim to the same financial standing they were in before the loss occurred.
A person who doesn’t represent any single insurance company but rather is focused on finding the best possible policies for clients, regardless of carrier.
Guarantee of payment for a loss in return for a specified premium. Typically involves the spreading of risk throughout the population; insurance carriers exist on the idea that the total of all of the premium payments they receive from their insured policyholders will exceed the dollar amount of payouts they make for all of their claims.
A person employed by an insurance company whose job is to conduct investigations into claims and determine if they qualify for coverage based on the specific policy involved. This is known as the adjustment process.
An insured or claimant who willfully and knowingly misrepresents facts or presents false claims in an effort to receive money from an insurance company that is not rightfully owed to them has committed insurance fraud. The penalties for this crime vary by state, but generally it is punishable by fines and/or jail time, depending on the severity.
The person or persons covered by a specific auto insurance policy.
The insurance company providing you with an auto insurance policy, protecting you against paying for covered accidents or incidents out of pocket.
Suspension or termination of your policy as a result of failure to pay your premiums or other valid reasons for cancellation.
The most an insurance company agrees to pay out for a particular cost or loss in an incident, or total losses during a set period.
The amount of coverage purchased by you, the insured, that determines the maximum amount your insurer will pay out for a covered loss.
The name for payments made by your insurance company in response to a claim.
An additional interested party besides the driver that receives payment from a claim. If you have a loan on your vehicle through a bank or other lender, loss payments will go to you as well as the lender—a loss payee on your policy.
Insurance that’s required by state law. This can vary from state to state.
When an applicant willfully withholds or misrepresents facts on an application for insurance. It can lead to denied claims, rescission, or referral for prosecution for insurance fraud.
Medical payments coverage, also known as MedPay, is designed to cover the costs of treatment you or your passengers need in the event of an accident that results in injuries.
State laws require a minimum amount of coverage for specific aspects of your insurance policy. (EX— at least $25,000 in bodily injury liability coverage). These limits can vary from state to state.
An official report provided by the government agency that issues your license. This report documents accidents, violations, and auto-related incidents and serves as your driving record. Insurers use this to verify information provided by individuals applying for insurance.
An insurance company whose policyholders are owners in the company itself, as opposed to companies owned privately or by stockholders.
A driver explicitly excluded from coverage on your policy.
A type of insurance coverage that can pay for lost earnings, medical treatment and surgery, and other expenses that arise from an accident—regardless of who was at fault. This type of coverage isn’t available in all states and is subject to the limitations of your specific policy.
States that are considered ‘no-fault’ states have laws that are designed to protect drivers from legal action and encourage lower car insurance costs. Generally, these laws prohibit drivers from suing one another in an accident unless certain conditions are met. Regardless of fault, each driver’s respective insurance company compensates them for medical costs resulting from the accident.
A policy that offers conditional coverage, usually for liability and medical payments, to someone who does not personally own a car or vehicle but either drives one occasionally or has to maintain an SR22 filing.
A policy that ends as a result of the insurer choosing not to renew it.
A driver who is not the primary driver of a covered vehicle, but who uses the vehicle occasionally.
The individual or organization who is paid by the insurance company in the result of a covered incident. If your vehicle is financed through a lender, they will often be the first payee in the event of a total loss.
Coverage that requires your insurance company to pay you in the event of a car accident that causes medical costs, hospital expenses, or funeral costs—regardless of whether you’re at fault. In some cases, PIP coverage will also cover other passengers in the vehicle or additional expenses on a case by case basis.
The actual contract between you and the insurance company. The declarations page, application, and endorsements typically attach to and become part of the policy.
The period that a specific auto policy covers. 6 and 12 month policy periods are the most common, but some insurance companies also offer monthly and quarterly plans.
The payment required of the insured by the insurance company to keep a policy active. These policies are usually quoted for a total term length between 6-12 months, but policyholders often pay them monthly.
A term used to describe fault or cause in an incident. It generally refers to an act or absence of action that ultimately results in an incident, injury, or damage.
While the term ‘rate’ is often used as another word for ‘premium,’ it describes individual units that add up to determine the total premium cost of a policy.
Continue coverage after a cancellation; the reason for the cancellation must be cleared first.
The offer of a new term of coverage for an agreed-upon price.
If your vehicle needs to be repaired after a covered incident, rental reimbursement coverage will pay for you to rent a temporary vehicle in the meantime.
Replacement cost coverage can cover the total cost of repairing or replacing a damaged vehicle or other property. Replacement cost coverage is notable in that it doesn’t take into account depreciation or market value. In some cases, insurers will guarantee replacement cost coverage on new vehicles that experience a loss within one year of ownership (or a set mileage limit).
Voiding of a policy all the way back to inception due to misrepresentation by the insured. Declines coverage for all claims during the coverage period.
An estimated value that a vehicle will have after a set period when taking into account depreciation and standard usage—for example, projected value at the end of a lease term.
An offer to start a new policy with the same coverage for a newly-recalculated rate. Rewrites are offered when the policy is canceled and it is too late to reinstate.
An addendum or addition included with a policy that either expands or reduces the benefits outlined in the policy. This is a synonym for ‘endorsement’ and can be used interchangeably.
An SR-22 form is required by some states and acts as official documentation of adequate car insurance according to that state’s laws. These forms are filed by your insurance company, and are often required to reinstate driving privileges after a driver commits multiple driving offenses or a single, serious offense like a DUI.
The minimum level of coverage required by a specific state. Different states have different required limits and coverages.
In the case of an incident in which another party is found liable but doesn’t have insurance to cover your costs, subrogation is the process that gives your insurer legal power to pursue action against that driver in order to recoup their payments. Subrogation can also occur when your insurance company pays for all or part of a loss but later determines that another party or their insurance company should actually be paying for it.
A surcharge generally applies to a range of conditions or events that can cause your insurance rates or total premium to increase. These can include at-fault accidents, moving violations, salvaged titles, coverage for high-performance vehicles, and more.
The time period covered by your auto policy. At the end of a term, the insurer can then either renew their policy or terminate it.
Anyone aside from the person(s) covered by an auto insurance policy and the insurance company.
An action that results in damage to personal property or injury and which serves as grounds for civil legal action. Breaches of contract are not included under this definition.
This often refers to a certain level of cost or personal injury beneath which parties are not permitted to sue one another for damages. For example, a threshold of $10,000 would mean that another driver couldn’t sue you after accumulating $9,000 in damages in an accident—even if you are at fault.
This is the process during which an insurance company collects information about an applicant to decide whether they will extend a policy or reject that applicant
If you experience injuries or property damage resulting from the actions of a driver without insurance or adequate coverage, or a driver who flees the scene without being identified, uninsured/underinsured motorist coverage can pay for your medical bills or car repair costs. Availability and terms of UM/UIM coverage vary from state to state
This 17-digit number is assigned to every vehicle in the United States since 1980. It’s used to associate vehicles with incidents and official records, and provides key information including make, model, and more.
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Contact:
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PO Box 7820
Newport Beach, CA 92658
Phone: Customer Service:
888.542.4222