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GLOSSARY OF INSURANCE TERMS:
 
 
Last updated: August 2021
 
 

Here are some of the more frequently used insurance terms. If you can't find a term you would like defined, feel free to call us at 1-340-773-6412, Monday through Friday, from 8:30 a.m. to 12:00 p.m. and 1:00 p.m. to 4:30 p.m. ET, or email us any time. We would be happy to help you with any insurance questions you may have.

 
 

All definitions provided are examples. Consult your policy for the terms that apply to your coverage.

 

 

A

 

 
Accident or Accidental
 
 
A sudden, unforeseeable event that causes bodily injury or property damage.
 

 
Actual cash value (ACV)
 
 
The value of any property that is lost or damaged at the time of the loss.
 

 
Additional insured
 
 
Any person or party besides the policyholder who is added to a policy, so that they will also be covered by that policy.
 

 
Anniversary Year
 
 
The 12 consecutive months following the Effective Date of the Policy and each 12-month period thereafter.
 

 
Appraisal
 
 
An estimate of property value, or of the extent of property damage, provided by an authorized person. Appraisals are performed to determine the value of property at the time of a loss.
 

 

B

 

 
Benefits
 
 
The amounts paid to a claimant or beneficiary under the coverage of a policy.
 

 
Benefit Year
 
 
The 12-month period following the date a claim for a specific benefit is first incurred, and each 12-month period thereafter.
 

 
Bodily Injury Coverage
 
 
The type of coverage that pays for medical expenses and/or funeral costs of other individuals injured, or killed, in an accident for which you are liable.
 

 

C

 

 
Calendar Year
 
 
The 12-consecutive-month period that begins on January 1 and ends on December 31. (Calendar-year resets every January 1st. A plan year resets on the renewal date of your policy.)
 

 
Cancellation
 
 
Terminating an insurance contract before the specified end-date listed in the policy.
 

 
Claim
 
 
A request for benefit payment under the terms of an insurance policy.
 

 
Claimant
 
 
The person(s) making a request for payment of benefits under the terms of an insurance policy.
 

 
Collision Coverage
 
 
The type of coverage that pays for the damages to your vehicle sustained as a result of a collision with another vehicle or object.
 

 
Comprehensive Coverage aka "other than collision"
 
 
Comprehensive is sometimes called "other than collision" coverage. The type of coverage that pays for damage to your vehicle sustained as a result of fire, theft, vandalism, or various other stated causes. Help's pay to replace or repair your vehicle in an incident that's not a collision. If you're financing or leasing your car, your lender likely requires comprehensive coverage. If you own your vehicle outright, it's up to you the owner if you want to add this type of coverage on your auto insurance policy.

For more information or to help you deside whether you should purchase this coverage go to the following link autoknowledgebase.php?comprehensivecoverageview#comprehensivecoveragetop

 

 
Compulsory Automobile Insurance (a/k/a “Liability Insurance - Automobile”)
 
 
See Liability Insurance - Automobile below by Clicking Here

 

 
Construction Type
 
 
Refers to the construction of a building, such as your residence. For example, frame or masonry.
 

 
Coverage
 
 
Another term for the protection offered under an insurance policy. Coverage is used interchangeably with the terms insurance or protection.
 

 

D

 

 
Declaration
 
 
A statement, signed by the insured, warranting that the information given by him/her is true.
 

 
Declarations page
 
 
A page in your policy – usually the front page – with basic information that identifies the policyholder, the property or vehicles covered, the coverages and the premium amounts. In informal conversation, you may hear it referred to as the “dec[k]” page.
 

 
Deductible
 
 
The portion of a loss that you are required to pay before your insurance coverage will respond.
 

 
Depreciation
 
 
A decrease in the value of property due to wear, age or other cause.
 

 

E

 

 
Effective Date
 
 
The effective date is the time, day, month, and year when your insurance coverage becomes active. Generally, the effective time begins at 12:01 am. You can typically find your effective date on the declarations page in your policy documents. Knowing the effective date is very important as you will want to make sure you are covered.

Say you buy a car from someone on May 31st but your insurance policy effective date is June 1st. You get in an accident on the way home from the purchase on May 31st, you would be personally responsible for all monies owed as your insurance policy was not active at that time.
 

 
Endorsement
 
 
A statement added to an insurance policy that alters, deletes or adds coverage, terms or provisions of the policy.
 

 
Exclusion
 
 
A provision in an insurance policy that excludes and/or limits certain coverages.
 

 

G

 

 
Garage location
 
 
The address where a vehicle is usually parked or garaged, which could differ from the policyholder's primary residence or policy mailing address. Living in town you might park your vehicle in a lot or garage not attached to your home, you should use the lot or garage address as that is where your vechicle is kept.
 

 

I

 

 
Insured
 
 
The person (or persons) whose risk of financial loss from an insured peril is protected by the policy. Sometimes called the "policyholder".
 

 

L

 

 
Liability Insurance - Automobile (a/k/a “Compulsory Automobile Insurance”)
 
 
Automobile liability insurance is financial protection for a driver who, while operating a vehicle, harms someone else or their property. Automobile liability insurance only covers injuries or damages to third parties and their property, not to the driver or the driver’s property.

For more information about this coverage go to the following link autoknowledgebase.php?liabilityinsuranceautomobileview#liabilityinsuranceautomobiletop

 

 
Lifetime Maximum
 
 
The maximum amount of benefits that will be paid for all covered services during the entire time you are insured.
 


 
Loss of Use Coverage - Homeowners
 
 
Loss of Use Coverage is an optional part of a homeowners insurance policy. In your policy, you may also see it listed as Coverage D in the policy documents. This coverage can help pay for the additional costs you might incur for reasonable housing and living expenses if a covered event makes your house temporarily uninhabitable while it’s being repaired or rebuilt.

For more information about this coverage go to the following link homeknowledgebase.php?lossofusecoverageview#lossofusecoveragetop

 

 

M

 

 
Medical Payments Coverage
 
 
Medical payments coverage is a optional part of an auto insurance policy. It may help pay your or your passengers' medical expenses if you're injured in a car accident, regardless of who caused the accident.

For more information or to help you deside whether you should purchase this coverage go to the following link autoknowledgebase.php?medicalpaymentscoverageview#medicalpaymentscoveragetop

 

 

P

 

 
Plan Year
 
 
The 12-consecutive-month period that begins on the renewal date of the policy. (Calendar-year resets every January 1st. A plan year resets on the renewal date of your policy.)
 

 
Policy
 
 
The legal document issued by an insurance company to a policyholder, which outlines the conditions and terms of the insurance. Also called the contract.
 

 
Premium
 
 
The cost of insurance coverage. A premium can be paid monthly, semi-annually or annually.
 

 

R

 

 
Renters Insurance
 
 
Property Insurance providing coverage to an individual living in an apartment, condominium or single family home owned by someone else.
 

 

U

 

 
Underwriting
 
 
The process by which an insurer determines whether or not, and on what basis, it will accept an application for insurance.
 

 
Uninsured Motorist (Bodily Injury Only) Coverage
 
 
Uninsured motorist bodily injury insurance is an optional part of an auto insurance policy. Uninsured motorist bodily injury insurance covers you, any family member and your passengers for bodily injuries, or death caused by an at-fault driver who does not have insurance (uninsured).

For more information or to help you deside whether you should purchase this coverage go to the following link autoknowledgebase.php?uninsuredmotoristscoverageview#uninsuredmotoristscoveragetop

 



 

Contact Us

 
 
If you don't see the Term defined here that you need. Please use our Contact Us form and send us the Term name you need help with.
 








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