Common Insurance Terminology

Common terms and definitions

• Accident: An unexpected event that causes damage, injury, or loss.
• Adjuster: A person who investigates an insurance claim and helps determine what the insurer should pay.
• Application: A form used to apply for insurance coverage.
• Appraiser: A person who evaluates damage or property value, often after a claim.
• Automobile Insurance: Insurance coverage for cars and other vehicles.
• Beneficiary: The person named to receive benefits from a policy.
• Benefit amount: The amount of money paid under a policy.
• Benefits: The services or payments a policy provides.
• Bodily Injury: Physical injury to a person.
• Body shop: A repair shop that fixes vehicle damage.
• Burglary: Illegal entry into a building to steal property.
• Business days: Weekdays when businesses are open, usually excluding weekends and holidays.
• Case Manager: A person who helps coordinate services, claims, or care.
• Claim: A request for payment or coverage under an insurance policy.
• Class Action Lawsuit: A legal case filed by a group of people with the same complaint.
• Collision: An accident where a vehicle hits another vehicle or object.
• Collision Coverage: Insurance that helps pay for damage to your vehicle after a collision.
• Comprehensive Coverage: Insurance that helps cover damage not caused by a collision, such as theft, fire, or weather.
• Coverage: The protection or benefits provided by an insurance policy.
• Deadline: The date by which something must be completed or submitted.
• Death Benefits: Money paid to a beneficiary when the insured person dies.
• Deductible: The amount the policyholder must pay before insurance starts paying.
• Department of Motor Vehicles (DMV): The government office that manages driver licenses and vehicle registration.
• Disability: A condition that limits a person’s ability to work or perform daily activities.
• Drive-in facilities: Service locations where customers can be helped without leaving their vehicle.
• Driving Under the Influence (DUI): Operating a vehicle while impaired by alcohol or drugs.
• Effective date: The date a policy or coverage begins.
• Enroll: To sign up for coverage or a service.
• Financial Responsibility: Proof that a driver can pay for damages or liability, often through insurance.
• Flood Insurance: Insurance that covers damage caused by flooding.
• Forms: Documents used to apply, request, report, or confirm information.
• Four wheel drive: A vehicle system that powers all four wheels for added traction.
• Full Coverage: A common phrase for a combination of coverages, often including liability, collision, and comprehensive coverage.
• Garaging Zip Code: The ZIP code where a vehicle is usually kept, which may affect insurance rates.
• Hit and run: An accident where a driver leaves the scene without stopping.
• Homeowners Insurance: Insurance that helps cover a home and belongings against certain losses.
• In force: Currently active and valid.
• Insurance Policy: The contract between the insurer and the policyholder.
• Insured: The person or property covered by the policy.
• Insurer: The insurance company providing coverage.
• Issued: Officially created or provided, such as a policy or document.
• Lapse: A break in coverage caused by nonpayment or failure to renew.
• Liability: Legal responsibility for damages or injury.
• Light duty: Work that is less physically demanding, often assigned after an injury.
• Loss: Damage, injury, or property destruction covered by insurance.
• Loss of Use: Coverage that helps pay for temporary transportation or living costs when property cannot be used.
• Lost wages: Income a person could not earn because of injury or disability.
• Mandatory Liability Insurance: The minimum liability coverage required by law.
• Medicaid (Medi-Cal): A government health insurance program for eligible low-income individuals and families.
• Medicare: A federal health insurance program primarily for people age 65 and older and some younger people with disabilities.
• Medical Payments: Coverage that helps pay medical expenses after an accident.
• No-fault Laws: Laws under which a person’s own insurance may pay certain costs after an accident, regardless of who caused it.
• Occupation: A person’s job or type of work.
• Overpass: A bridge or roadway that crosses above another road.
• P.I.P. (Personal Injury Protection): Coverage that helps pay medical and related expenses after an accident.
• Policy: Another word for an insurance contract.
• Policy loan: Money borrowed against the value of certain life insurance policies.
• Premises: The property or location covered or referenced by the policy.
• Premium: The amount paid for insurance coverage.
• Prior damage: Damage that existed before a current incident or claim.
• Quote: An estimate of the cost of insurance.
• Rate: The price or cost used to calculate insurance premiums.
• Reckless driving: Driving in a dangerous manner that disregards safety.
• Records: Documents or files that contain information about a person, policy, claim, or transaction.
• Registered owner: The person legally listed as the owner of a vehicle.
• Reinstatement: Restoration of a policy after it has lapsed or been canceled.
• Renew: To continue a policy for another term.
• Rental / Rental Reimbursement: Coverage that helps pay for a rental vehicle while your vehicle is being repaired.
• Right of way: The legal right to go first in traffic.
• Roadside Assistance Coverage: Coverage for services such as towing, battery help, or lockout assistance.
• Robbery: Taking property by force or threat.
• Salvage value: The remaining value of damaged property.
• Scene of an accident: The location where an accident happened.
• Skid marks: Tire marks left on the road when a vehicle slides while braking.
• Sobriety test: A test used to determine whether a person is impaired by alcohol or drugs.
• Statement: A written or recorded explanation of facts or events.
• Theft: Stealing property.
• Settle: To resolve a claim by agreement, often with payment.
• Toll road: A road that requires payment to use.
• Total loss: Damage so severe that repair is not practical or costs more than the property is worth.
• Tow truck: A vehicle used to move disabled or damaged vehicles.
• Tow yard: A storage location for towed vehicles.
• Towing and Labor: Coverage for towing and certain roadside labor costs.
• Transported by ambulance: Taken to a medical facility in an ambulance.
• Under the influence: Impaired by alcohol or drugs.
• Underwriter: A person or company that evaluates risk and decides policy terms or pricing.
• Uninsured / Underinsured Motorist (UM/UIM): Coverage that helps if the at-fault driver has no insurance or not enough insurance.
• Whiplash: A neck injury often caused by a sudden back-and-forth movement.
• Worker’s Compensation Insurance: Insurance that provides benefits for work-related injuries or illness.
• Work-related injury: An injury that happens while performing job duties.
• Yield: To let another vehicle or person go first.