Insurance Dictionary

How much it would cost to replace the item today minus depreciation.

The individual who handles the claims investigation and determines if and how much the insurance company should pay for damages or losses.

A person who receives extensive education and earns their license to help people understand and buy insurance products. They are trusted advisors who make work on behalf of a specific company or work independently to sell insurance products from multiple companies.

Insurance companies determine who is responsible (or “at fault”) for an accident. The company will give each driver a percentage representing how much they are “at fault.” The assigned percentages help companies figure out how much each will pay.

The person, charity, trust, estate, or business who will receive the payout on a life insurance policy when the insured person dies.

A term used to describe the physical harm you (or anyone else named on the policy) caused due to a collision.

If an insurance policy is terminated at any time (besides the renewal date), it’s called a cancellation. Insurance companies typically will send you a notice and explain why the policy is being cancelled.

A report made to an insurance company following an accident or other incident covered by the policy. The report begins the claims process, where the insurance company will begin their investigation and determine what they need to pay, per the policy terms.

Optional insurance coverage that helps pay for damages that are not typically covered in auto insurance policies, such as fire, vandalism, or a falling tree. Sometimes this coverage is required by a lender.

A general term used to describe the protection outlined in an insurance contract.

Refers to the accidents, damages, and situations that an insurance policy covers, meaning the insurance company will provide some level of financial support for. Covered loss means it’s covered by the insurance contract.

The date the insurance policy was written. It is not when the policy becomes active and goes into effect.

The amount of money the insurance company will pay out upon the death of the life insurance policyholder. Death benefit is usually tax-free.

A summary page that outlines the details of your policy such as coverage amounts, deductibles, and those covered by the policy.

Your cost out-of-pocket before your insurance will begin to pay.

The day your policy goes into effect. This is often different than the date of issue.  

Changes made to an existing policy are called endorsements. It could be adding a driver, getting married, moving, or other life events that impact coverage. Adding additional options such as roadside assistance or rental coverage would also be considered an endorsement.

Situations that the insurance policy does not cover.

A type of insurance product that helps cover the difference (minus the deductible) between your car’s value and the amount you may own on the car loan or lease, in the event that your car is totaled in a covered accident.

The amount of time after your premium is due in which you have to remit payment without losing coverage.

Agents who sell insurance products from different insurance companies are considered independent. InsureOnline.com is an independent insurance agency, which means our number one goal is to find you the best policy to meet your needs, not representing a specific company.

Another term used to describe those who are covered by the insurance policy.

A term used to describe the insurance company who is providing coverage as outlined in the policy.

When you lose your coverage for a time. Lapses may occur if you fail to renew or make your premium payment. Your future rates may be impacted if you have a lapse in coverage.

The maximum amount of money the insurance company will pay in the event of a covered claim.

The amount the claim costs.

Extra coverage you can buy that helps pay for your medical bills, regardless of if you’re at fault or not in the accident. It may also cover any injuries to passengers and funeral expenses.

A report from your state with your driving record. Insurance companies often look at MVRs to determine your risk factor to calculate your premium costs.

When you buy more than one insurance product from the same company, they may offer you a discount for bundling the two (or more) products together.

The individual who is covered by the insurance policy. This may include the policyholder or anyone else listed for coverage.

Also known as personal injury protection insurance (PIP), this type of insurance will cover losses (per the terms of the policy) regardless of who was at fault for the accident.

A written contract between you and the insurance company. It will detail what is covered, not covered, and other details such as premiums. Your insurance agent should be able to answer any questions about the policy. Ask away!

The individual who the insurance policy is contracted with and who is covered under the terms of the policy.

The amount the insurance policy costs. Premiums are typically paid monthly, semi-annually, or annually. 

A document the insurance company creates that shows you have insurance coverage. Landlords, lenders, law enforcement, or others may request the document as evidence of your coverage.

A estimate of what your cost would be for the insurance coverage you are shopping around for, based on the information you entered or told the agent. A quote does not mean you have an insurance policy. It’s only what the insurance company would ask you to pay to receive coverage.

How much it will cost to replace the item with a new one. Unlike actual cash value, depreciation is not deducted when calculating replacement costs.

An insurance company maintains the legal right to bring a liability suit against a third-party who causes losses or damages. If your insurance company paid you for losses that another person caused, the company can use subrogation to recover what they paid you from the responsible party.

The time period the insurance policy is in effect. Sometimes it’s also called policy period or policy term.

How an insurance company decides how risky is would be to insure the person or property. An insurance underwriter will help set the premium amount in exchange for coverage.  

A unique serial number manufacturers put on automobiles. Your VIN helps identify your specific car.

The time the insured must wait before some (or all) of their coverage goes into effect.