Insurance Term Glossary

When you're doing your auto insurance research, it will help to have a solid grasp of insurance terminology. Here are definitions of the most commonly used terms in auto insurance.

Accident Forgiveness - this is a program whereby drivers who have not had at-fault accidents in the past five years will not incur a surcharge on their premiums for their next at-fault accident. This varies by state, so find out the specifics when doing your auto insurance research.

Actual Cash Value - the fair market value of your vehicle or replacement cost less depreciation.

Bodily Injury Liability Coverage - covers damages for bodily injury or death resulting from an accident in which you are at fault. Also covers your legal defense. You will find in your auto insurance research that most states require certain levels of this coverage to drive legally.

Deductible - the portion of your claim that you pay out-of-pocket. Higher deductibles will lower your premiums.

Insured - the party who is insured or the policyholder.

Premium - the cost of the insurance policy in exchange for auto insurance coverage.

Quote - an estimate of the premium you will be charged for insurance coverage based on information you provide when requesting the quote. On our site, you can receive auto insurance research and up to five free quotes on policies.

Rental Reimbursement - optional coverage that will help pay for the costs of a rental car when your car is being replaced or repaired as a result of a covered accident or loss. When conducting your auto insurance research, make sure you find out the daily limits of this coverage.

Underwriting - the process an insurance company conducts to determine if it will provide coverage to an applicant.

Uninsured motorist coverage - pays for your injuries caused by an uninsured driver. Some states also allow this coverage to pay for damages caused by an uninsured driver. Visit your state's department of insurance website when doing your auto insurance research to learn more.

Still confused? Check out our auto insurance FAQs page.