Insurance Glossary

100/300/50 Insurance — Coverage referring to the amount of bodily injury liability limits in an auto insurance policy. The series of numbers indicates the amount of coverage you have. With 100/300/50 coverage, you have $100,000 bodily injury liability insurance per person, $300,000 total bodily injury liability insurance per accident, and $50,000 property damage liability per accident.

Actual Cash Value (ACV) — The fair market value of a property (vehicle or home) at the time of it being deemed a total loss, stolen or destroyed. Following a loss, the insurance company determines the ACV as the amount equal to the replacement cost minus the depreciation.

Adjuster — An adjuster, or insurance claim agent, manages claims in order to determine compensation (if any) in case of vehicle damages or loss based on policyholder coverage.

Agent — Licensed personnel who represents, writes and binds policies on behalf of different insurance companies.

Application — A form filled out by the potential insured with their personal information for the insurance company to decide whether or not they will insure the individual and at what premium rate.

Auto Insurance — A type of personal insurance that provides financial protection for you, your passengers and your vehicle(s) in the event of an accident, theft or other situation involving your vehicle.

Binder — A temporary agreement between the insurer and insured to provide proof of insurance while final verification of data is under review.

Bodily Injury Liability — A type of coverage that legally protects the insured in accidents deemed at fault causing bodily injury to another driver or pedestrian. Losses covered include medical expenses, loss of income, pain and suffering, and legal fees (if a lawsuit occurs).

Captive Agent — A type of insurance agent that represents a single insurance company. A captive agent can only sell policies through that company.

Claim — Formal inquiry to the insurer for coverage or reimbursement due to vehicle loss or damage.

Claimant — Party making a claim to the insurer for an incurred loss.

Collision Insurance — A type of coverage that pays costs toward repairs or replacement if your vehicle was damaged by another vehicle or object. A deductible payment is required to avoid paying total repairs out of pocket.

Comprehensive Insurance — A type of coverage that pays costs toward vehicle repairs or replacement caused by accidents aside from collision. For example, vehicle damage that results from fire, theft, extreme weather, flood, or contact with an animal.

Contract — The insurance policy agreement between the insurance company and the individual being insured.

Declarations Page — First page of an insurance policy specifying all legal and personal information of the insured (and additional insureds) including address, vehicle(s), location, policy period, activation date, coverage amounts, and premiums payable.

Deductible — The amount of money paid out of pocket by the policyholder after making an insurance claim in order to receive proper coverage for losses.

Depreciation — The reduction of asset value over time. In auto insurance, the vehicle value reduces due to year, make, model along with the overall condition of wear and tear.

Endorsement — An attached agreement to the current insurance policy in order to add or deduct coverage terms. The endorsement will take priority and void original terms.

Financial Responsibility Law — A state law that requires a vehicle owner to provide legal proof of financial ability to pay for any and all damages that are caused or incurred.

Gap Insurance — Optional insurance coverage that pays for the “gap” between what your insurer will pay out if the vehicle is deemed a total loss and the loan or lease balance that remains pending.

Hazard — An action, condition or situation that creates or increases the likelihood of loss. Examples of physical hazards as it relates to homeowners insurance are fire, theft and vandalism.

Hazard Insurance — Part of a homeowners insurance policy that provides coverage for the structure of your home from damage caused by fires, storms, hail or other natural events.

High-Risk Driver — A driver that is a greater liability to insurers due to factors such as their driving record, the type of car they drive, or even their credit history.

Homeowners Insurance — A type of personal insurance that provides financial protection against loss or damage to a property, its furnishings or other assets in the home. Homeowners insurance also provides liability coverage in the event of an accident in the home or on the property.

Independent Agent — A type of insurance agent that works with multiple insurance companies. An independent agent can offer policies from any of the companies they represent.

Insurance Carrier — The insurance company, also called an insurance provider, that issues your insurance policy, charges your premium and pays for losses.

Lapse — A period of time in which an insurance policy becomes invalid, whether due to expiration, unpaid premium or another reason. During a lapse, the insured has no coverage and will have to pay out of pocket for any damages incurred.

Liability Insurance — A type of coverage that protects the (at-fault) insured against paying out of pocket in the event of damaging someone else's property or being responsible for bodily injury to another party.

Loss — Insurance claim amount paid due to bodily injury or property damage.

Loss of Use — In case of a rental car accident, the rental agency will charge a fee for the revenue lost during the time that the vehicle is being repaired.

Medical Payments (MedPay) — A type of optional coverage that may help pay for medical expenses your or your passengers if injured in a car accident, regardless of who caused the accident.

Named Driver Exclusion — An endorsement on a policy stating that a specifically named driver is not insured in the event of an accident.

Personal Injury Protection (PIP) — Coverage provided by the insurer for all medical expenses, lost wages (state laws may vary) and other expenses up to your limits regardless of the party at fault.

Policy Period — The time period in which the insurance policy is active and effective.

Premium — The amount to be paid to the insurer in order to keep an insurance policy active.

Property Damage Liability — A type of coverage that protects the insured from paying for damages incurred to another person's personal property.

Reinstatement — When an insurance policy is reverted back to an active state after the policy lapsed due to an unpaid premium.

Rental Reimbursement Coverage — Coverage that pays a set amount for a rental vehicle due to insured’s vehicle being in repair for damage covered by the insurance policy.

Rider — Additional written agreement extending or restricting coverage to your existing policy for an amount otherwise stated in your current policy. Same as an "endorsement."

Roadside Assistance — An optional coverage that provides professional assistance in an event where the insured's car is no longer drivable (i.e. mechanical breakdown, battery replacement, flat tire, etc.)

SR-22 — A certificate of insurance proving that the insured has adequate coverage required by the state for "high-risk" drivers, including those involved in a DUI incident, or those who have numerous driving violations within a few years or have been in an auto accident without insurance. Also known as FR-44 in some states.

Stacked Insurance — Increases your uninsured and underinsured motorist (UM/UIM) coverage by combining all coverage limits for each vehicle insured on a policy.

Subrogation — The process in which the insured gives their insurance company legal right to recover the amount of the loss and damages from the liable party.

Surcharge — Auto insurance premium increase due to an at-fault accident or moving violation.

Telematics — A device or method used to monitor driving behavior. Insurers use telematics data to determine auto insurance rates, often described to consumers as pay-as-you-go or usage-based insurance.

Totaled Vehicle Options — Some definition...Totaled Vehicle Options: All options, except Liability only, provide the same coverage to repair vehicles that are not a total loss. However, if the vehicle is a total loss, they provide very different settlements. Actual Cash Value: Actual Cash Value is available for all vehicles qualifying for full coverage. In the event of a total loss, this coverage pays the lesser of the rating base or the actual cash value at the time of loss minus the deductible. Actual cash value is determined by the market value, age, and condition of the vehicles at the time of the loss. Agreed Value: Agreed value is the agreed value of your vehicle, including the vehicle and all accessory coverage. Owners with vehicles that have an Agreed value equal to or less than $15,000 are required to maintain the following documents: four or more color side-view photos that clearly show the accessories covered, copy of the title, and receipts (optional). These documents will be used to assist in the settlement of a claim. Owners with vehicles that have an Agreed value greater than $15,000 are required to have a vehicle inspection. If you purchase a policy with Progressive for this vehicle an inspection company appointed by Progressive will call you within 7 days to schedule an appointment. A copy of the title is required at the time of inspection. "Accessory Coverage" means equipment, devices, accessories, enhancements and changes other than those which are original manufacturer installed, which alter the appearance or performance of the vehicle. This includes, but is not limited to: any electronic equipment, antennas, and other devices used exclusively to send or receive audio, visual, or data signals, or play back recorded media; sidecars; trailers designed to be pulled behind a motorcycle or off-road vehicle; custom paint, custom chrome plating, or custom exhaust; safety riding apparel, including helmets. (Coverage is only provided in the event of a collision loss. Theft is not covered.) Total Loss Coverage: In the event of a total loss, this optional coverage pays the MSRP of a current model year vehicle of the same make and model. Qualifying vehicles can keep this coverage for 2-4 years, depending upon the model year of the vehicle and when the policy first starts. Once a vehicle no longer qualifies for Total Loss Coverage, the policy automatically converts to Actual Cash Value (ACV) at renewal. Total Loss Coverage is not available for all models or vehicle types.

Totaled vessel option — Actual Cash Value is available for all boats and PWCs qualifying for Comprehensive and Collision coverages. In the event of a total loss, this coverage pays the lesser of the actual cash value at the time of loss less deductible or the market value you provided for the watercraft. Actual cash value is determined by the market value, age, and condition of the watercraft at the time of the loss. Disappearing Deductibles are optional with Actual Cash Value. Agreed Value is available on all boats qualifying for Comprehensive and Collision coverages. In the event of a total loss, this coverage pays the agreed value shown on the declarations page regardless of the actual cash value at the time of loss. All losses, whether partial or total, are subject to the applicable deductible. Disappearing Deductibles are included with Agreed Value. Agreed Value is not available on PWCs. Total Loss Replacement/Purchase Price is available on previously untitled boats up to one (1) model year old. In the event of a total loss, this coverage replaces the insured boat with a new boat that is, to the extent possible, the same make, class, size and type, and which contains comparable equipment. (If the insured chooses not to replace the totaled boat, we will pay the purchase price.) For watercraft over five model years old, we will pay the purchase price as shown on the declarations page. All losses, whether partial or total, are subject to the applicable deductible. Disappearing Deductibles are included with Total Loss Replacement/Purchase Price. Total Loss Replacement/Purchase Price is not available on PWCs. Total Loss Coverage is available at new business or upon endorsement on previously untitled personal watercraft up to one model year old. In the event of a total loss, this optional coverage pays the MSRP of a current model year PWC of the same make and model, less any applicable deductible. Qualifying PWCs can keep this coverage for 2-3 years, depending upon the model year of the PWC and when the policy first incepts. Total Loss Coverage(TLC) coverage can remain in place until the inception year of the next renewal term is more than two years greater than the model year of the PWC. Once a PWC no longer qualifies for TLC, the policy automatically converts to Actual Cash Value (described above) at renewal. Disappearing Deductibles provide a reduction of twenty-five percent (25%) in Comprehensive and Collision deductibles at renewal for each consecutive preceding claim-free policy period you experience. Upon renewal after four consecutive claim-free policy periods, there will be no deductible. Deductibles return to their original amounts upon the next renewal after a Comprehensive or Collision claim has been paid.

Underinsured Motorist Coverage (UIM) — A type of coverage that protects the insured driver (and passenger) involved in an accident with another party that has inadequate coverage or hit-and-run from paying for their own damages.

Underwriter — A person who assesses and reviews the information of the potential insured to determine whether or not coverage will be provided and at what premium rate.

Underwriting — The process the insurance company goes through for each potential insured to determine if their application is accepted or denied.

Uninsured Motorist Coverage (UM) — A type of coverage that protects the insured driver (and passenger) involved in an accident with another party that has no liability insurance.

Uninsured/Underinsured Boater — Uninsured/Underinsured Boater coverage protects you, your resident relatives, and occupants of an insured watercraft if any of these insured sustain bodily injury, including any resulting death, in an accident caused by the owner or operator of a watercraft that does not have insurance (Uninsured) or does not have enough insurance (Underinsured) to cover your damages.

Unstacked Insurance — Each vehicle's coverage pertains to that specific driver/vehicle and cannot be transferred or combined with another insured to pay for post-accident expenses.

Vehicle Identification Number (VIN) — A unique combination of 17 numbers and letters that identify a specific car. The VIN is typically found on the dashboard on the driver's side of the vehicle.