Auto Insurance Glossary of Terms
Offered by SchoolsFirst Insurance Services, LLC
Actual Cash Value This amount is determined by your insurer based on the market value cost of replacing or returning your vehicle to the same level of quality before the claim. The actual cash value may differ by geographical region and can be based on local private-party sales and dealer quotations on similar vehicles.
Admitted Company An insurance company authorized to conduct business in California.
Aftermarket Parts Vehicle parts made by a company other than the vehicle’s manufacturer.
Agent A licensed person or organization authorized to sell insurance by or on behalf of a particular insurance company.
Binder Before your policy is written, your agent may give you a binder, a temporary agreement that provides coverage until your policy is ready to sign.
Bodily Injury Physical pain, illness, or any impairment of your physical condition, including death. Communicable diseases like HIV/AIDS are not considered bodily injuries.
Broker A broker is a licensed person or organization who considers multiple insurance companies when looking for insurance coverage on your behalf.
Cancellation A cancellation occurs when your in-force insurance contract is terminated before the policy period ends. Cancellation can be initiated by either party, and may be voluntary, involuntary, or mutually agreed upon. Penalties may apply, depending upon the contract provisions. Flat cancellation is the cancellation of a policy on its effective date without any premium charge, as if it had never been issued.
Claim When the insuring company receives notification that a loss covered under their policy has occurred. This term can also be used to represent the actual or estimated amount of the loss.
Claimant One who claims a loss and/or demands payment of compensation or benefits.
Collision Coverage This coverage insures against physical damage to your vehicle caused by hitting another vehicle or object, or by overturning the vehicle.
Comprehensive Coverage This coverage insures against physical damage to your vehicle from causes other than collision or overturn, such as theft, fire, vandalism, or falling objects. This is sometimes called “Other-than-Collision” coverage.
Coverage The protection provided in your insurance agreement. It can mean either the amount of the coverage provided, the risks insured against, or both.
Declaration The section of your insurance policy containing basic information such as your name and address, the description and location of the insured property, the policy’s term, amount of coverage, and premium amounts.
Declination The insurance company rejects the application for coverage.
Deductible The amount you are financially responsible for before the insurance company provides coverage. In most cases, a higher deductible will give you lower premiums.
Depreciation A decline in the economic value of an insured object due to age and use.
Endorsement A written amendment made to a policy that is part of the insurance agreement
Exclusion A provision to your insurance policy that designates what the insurer will not cover under the contract, such as coverage for specific hazards, perils, persons, property, or locations.
Expiration Date The date on which the policy terminates or ceases to provide coverage.
Grace Period A specified period of time after the premium payment is due in which the insured may still keep the policy in force without penalty by making the payment .
Insured The person or organization covered by an insurance policy; the one who is reimbursed for losses or receives benefits. Also called the policyholder.
Insurer A company that has been authorized to transact the business of insurance.
Liability Coverage This insurance provides compensation to others for damages for which you are legally responsible, like their bodily injury or damage to another’s property. Liability covers these claims whether or not the damage was caused through your negligence.
Limits of Liability The maximum amount which the insured person or organization may collect from the insurance company as outlined in the policy.
Loss experience A summary of the kinds and amounts of claims you have had in the past
Material Misrepresentation The intentional concealment, distortion, or fabrication of an important (material) fact on an application by an applicant or policyholder.
Medical Payments Coverage Medical coverage for bodily injuries received while occupying an insured vehicle. It covers the insured and passengers regardless of negligence and is usually limited to $5,000.
No-fault Insurance A system of insurance coverage where your insurance company pays for your injuries in an auto accident, regardless of who is at fault.
Policy The written contract between you and the insurance company that includes the conditions of the coverage.
Premium The price for coverage as described in an insurance policy.
Premium Financing The payment of insurance premiums by a lender on behalf of the policyholder. The lender then bills the policyholder for the cost of the premium, plus interest and fees.
Property Damage Destruction, damage, or loss of use of a third party’s physical property.
Quote The estimated cost of insurance coverage based on specific information. Also called a bid.
Rate The cost of the insurance policy, which you pay to the insurer as a premium.
Replacement Cost The cost to repair or replace the insured item. Some insurers pay only the market value of the item at the time of loss, not what it would cost to fix or replace it. If you have personal-property replacement-cost coverage, the insurer will pay the full cost to repair an item or buy a new one.
Replacement Value The cost to repair or replace insured property at its current price with no deduction for depreciation.
Rider An attachment to an insurance policy that outlines modifications made to the original document, such as added or deleted coverage. Also known as an endorsement.
Risk The possibility of loss or injury.
Subrogation After an insurer settles with you for damage to your car, it may seek to recover the cost of repairs or the replacement amount, as well as your deductible cost, from the third party responsible for the accident.
Surcharge An additional cost applied by the insurance company above the cost of the insurance, usually incurred for accidents or moving violations.
Underwriting The process of reviewing insurance coverage applications and determining risk, and on what terms the insurance company will accept the risk.
Uninsured/Underinsured Motorist Coverage When an insurer adds this coverage to an auto insurance policy, it must cover damages to you and your passengers for any bodily injury that an uninsured motorist would be legally liable for but unable to pay. It may also cover hit-and-run accidents.
Contact an Insurance Specialist
- Obtain a free online quote
- Discuss your needs over the phone, or schedule an appointment by calling 714/258-4000 or 800/462-8328 ext. 4309, Monday-Thursday 9am-5pm Friday 9am-6pm and Saturdays 9am-2pm.
- Email insurance@SchoolsFirstfcu.org
CA Insurance License 0I19344
Get Your Online Auto Insurance Quote Now!