Glossary
Every word on your declarations page, in one sentence each.
- Premium
- What you pay to keep the policy alive — monthly, every six months, or yearly.
- Deductible
- Your share before the insurer pays. Higher deductible = lower premium, bigger surprise later.
- Liability coverage
- Pays for the damage and injuries you cause to other people. Legally required almost everywhere.
- 25/50/25 limits
- Thousands of dollars: $25k injury per person / $50k injuries per crash / $25k property damage.
- Collision
- Pays to fix your car after you hit something, regardless of fault.
- Comprehensive
- Pays for the non-crash stuff: theft, hail, fire, flood, a deer, a falling tree.
- Full coverage
- Not a real product — slang for liability + collision + comprehensive together.
- Uninsured / underinsured motorist (UM/UIM)
- Covers you when the person who hit you has no insurance or not enough.
- PIP (Personal Injury Protection)
- Pays your medical bills and sometimes lost wages regardless of fault. Required in no-fault states.
- Medical payments (MedPay)
- A smaller, simpler version of PIP for medical bills only.
- No-fault state
- Your own policy pays your injury bills first, and your right to sue is limited.
- At-fault (tort) state
- The driver who caused the crash — and their insurer — pays.
- SR-22
- Not insurance: a form your insurer files proving you carry coverage, usually after a DUI or a lapse.
- Lapse
- Any gap in coverage. Even a short one raises future quotes and can cost you your license in some states.
- Surcharge
- The rate increase applied after an at-fault claim or violation, typically for about three years.
- CLUE report
- The industry's shared 7-year record of your claims and some inquiries. You can request yours free.
- Insurance score
- A risk score built from claims history, coverage continuity and (in most states) credit data.
- Endorsement / rider
- An add-on that changes your policy, like rental reimbursement or new-car replacement.
- Adjuster
- The person who inspects damage and decides what the insurer pays.
- Total loss
- When repairs cost more than the car is worth, so they pay you its value instead.
- Actual cash value (ACV)
- What your car was worth right before the crash — depreciation included.
- Gap insurance
- Covers the difference between what you owe on a loan and the car's actual cash value.
- Telematics / usage-based
- An app or device that scores your braking, speed and phone use in exchange for a discount.
- Named driver exclusion
- A signed form removing someone from your policy. If they drive and crash, you're on your own.