Glossary

Every word on your declarations page, in one sentence each.

#

25/50/25 limits: Thousands of dollars: $25k injury per person / $50k injuries per crash / $25k property damage.

Actual cash value (ACV): What your car was worth right before the crash, depreciation included.
Additional interest: A lender or lienholder listed on your policy so they get notified of changes. They don't get coverage, they just get a heads up.
Adjuster: The person who inspects damage and decides what the insurer pays.
Assigned risk pool: Where drivers who can't get coverage anywhere else end up, usually after multiple violations or a lapse. State mandated, and never cheap.
At-fault (tort) state: The driver who caused the crash, and their insurer, pays.

Binding: The moment your coverage actually starts. A quote is not coverage, a bound policy is.
Bodily injury liability: The half of liability coverage that pays for other people's injuries when you cause a crash.
Bundling: Buying more than one policy, like auto plus renters, from the same insurer for a discount on both.

Claim: The formal request you file asking the insurer to pay for a loss. Filing one is not free money, it goes on your record.
Coverage limit: The maximum your insurer will pay for a covered loss. Anything above it comes out of your pocket.
Cancellation vs non-renewal: Cancellation means your insurer ended the policy mid term. Non-renewal means they just didn't renew it when it expired. Different reasons, different rules.
CLUE report: The industry's shared 7-year record of your claims and some inquiries. You can request yours free.
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.

Declarations page: The summary page of your policy showing who's covered, what's covered, and your limits. Read this, not just the renewal email.
Deductible: Your share before the insurer pays. Higher deductible = lower premium, bigger surprise later.

Endorsement / rider: An add-on that changes your policy, like rental reimbursement or new-car replacement.
Excluded driver: The person who was removed from a policy by a named driver exclusion. They live in the house, they may even have keys, but the policy will not cover them behind the wheel.

Filing fee: The small flat charge, usually $15 to $50, your insurer bills you to file an SR-22 or FR-44. Separate from any rate increase caused by the violation itself.
FR-44: SR-22's stricter cousin. Required instead of SR-22 in Florida and Virginia after certain DUI convictions, with higher coverage minimums attached.
Full coverage: Not a real product, slang for liability + collision + comprehensive together.

Gap insurance: Covers the difference between what you owe on a loan and the car's actual cash value.
Good student discount: A rate reduction for keeping a GPA above a set threshold, usually 3.0. Real money for something you're already doing anyway.
Grace period: The window after a missed payment before your policy actually cancels. Not a reason to skip paying, just a safety net if you're late.

Hard pull vs soft pull: A hard pull is a full credit check that can ding your credit score. Insurance quotes use soft pulls, which do not.

Insurance score: A risk score built from claims history, coverage continuity, and (in most states) credit data. Read the full guide

Lapse: Any gap in coverage. Even a short one raises future quotes and can cost you your license in some states.
Liability coverage: Pays for the damage and injuries you cause to other people. Legally required almost everywhere.
Lienholder: The bank or lender that technically owns your car until the loan is paid off. They get to require full coverage.
Listed driver: Someone on your policy who's expected to drive the car sometimes. Different from being excluded, and different from being the named insured.

Medical payments (MedPay): A smaller, simpler version of PIP for medical bills only.
MVR (Motor Vehicle Record): Your official driving history. Insurers pull this to see your violations, points, and license status before they quote you.

Named driver exclusion: A signed form removing a specific person from your policy, usually to keep a high risk driver from raising the rate. If they drive and crash, you're on your own.
Named insured: The person or people actually named on the contract, not just anyone who drives the car.
No-fault state: Your own policy pays your injury bills first, and your right to sue is limited.
Non-owner policy: Liability coverage for someone without a car of their own. Keeps your insurance history unbroken between vehicles.

Policyholder: The person who owns the policy and pays the bill. Not always the same as every driver listed on it.
Property damage liability: The half of liability coverage that pays for the stuff you hit: cars, fences, mailboxes, storefronts.
PIP (Personal Injury Protection): Pays your medical bills and sometimes lost wages regardless of fault. Required in no-fault states.
Points: Marks added to your driving record after a violation. Not the same as a surcharge, that's the price tag, this is the paper trail.
Premium: What you pay to keep the policy alive, monthly, every six months, or yearly.

Quote: An insurer's estimate of your price before you buy. Not a promise, and it can change once they pull your full driving record.

Rental reimbursement: An add-on that pays for a rental car while yours is in the shop after a covered claim. Cheap to add, painful to skip.
Reinstatement: Getting a canceled policy or suspended license turned back on, usually after paying fees and proving coverage.

SR-22: Not insurance: a form your insurer files proving you carry coverage, usually after a DUI or a lapse.
Surcharge: The rate increase applied after an at-fault claim or violation, typically for about three years.

Telematics / usage-based: An app or device that scores your braking, speed, and phone use in exchange for a discount.
Total loss: When repairs cost more than the car is worth, so they pay you its value instead.

Underwriting: The behind-the-scenes process where the insurer sizes up your risk and decides your price.
Uninsured / underinsured motorist (UM/UIM): Covers you when the person who hit you has no insurance or not enough.