Every industry has its own unique and quirky jargon. Auto insurance is no exception. Here are some good terms to know about insuring your car or truck.
Auto insurance terms and what they mean
Actual cash value (ACV)
The value of a car considering the age, mileage, make, model, and overall condition of the vehicle.
Determines the value of a vehicle or property, or the extent of damage from an accident. Usually conducted by an impartial expert.
Bodily injury liability coverage
Pays damages for injury or death resulting from a covered accident for which you are at fault. May also provide you with funds for a legal defense.
The company providing insurance coverage.
Certificate of satisfaction
A form you sign when taking delivery of an insured car from the repair shop. It indicates your satisfaction with the repairs.
A request for payment under the terms of an insurance policy. Learn more about claims.
The portion of a claim that you pay. A higher deductible amount will lower your insurance premiums but increase your costs if there’s an accident.
A change to your policy by amending specific coverage. It can add coverage, modify it, reduce or even remove coverage.
A restriction to your insurance policy that reduces or removes coverage for certain potential events, persons, property or locations.
The date when your coverage ends. A new or renewal policy typically starts on this date.
Financial responsibility law
Financial compensation for a loss with the intent to restore a person or entity to the financial position enjoyed before the loss.
Interest paid when an individual would suffer an economic loss as the result of damage to property or bodily injury.
Insurance ID card
A card issued by your insurance company with basic information about your policy.
The legal obligation or responsibility for any injury or damage suffered by another person.
The maximum amount of coverage under an insurance policy.
Medical payments coverage
Motor vehicle report (MVR)
A report from the department of motor vehicles listing accidents and violations on your driving record.
When an insurance company decides to not renew a policy at its expiration date.
Personal injury protection
Pays for medical treatment, lost wages or other medical expenses related to an accident regardless of who caused the accident. Learn more.
The cost of an insurance policy. It can be paid in monthly, quarterly, semi-annual or annual installments.
A legal document stating that all financial obligations from the past, present and future resulting from an accident or occurrence have been fulfilled.
Replacement cost (RC)
In contrast to ACV, the amount it would cost to actually replace a damaged or destroyed vehicle.
Refers to the probability of a particular loss occurring.
The condition of a vehicle or other property so heavily damaged that repair costs would surpass its value.