ACTUAL CASH VALUE:  The amount paid for property damage losses, usually equal to the cost of replacing the damaged vehicle, minus depreciation for wear and tear.

ANTI-THEFT DEVICE:  A device, either active or passive, that attempts to prevent vehicle theft.  A passive device is one that turns on automatically.  An active device is one that the driver has to activate.

BODILY INJURY LIABILITY:  Coverage that protects against financial loss and pays legal defense cost when you are legally liable for injuring other persons in an automobile accident.

CLAIM:  A policyholder’s request to recover losses covered by an insurance policy.

COLLISION INSURANCE:  Coverage that reimburses you for damage to your own car resulting from a rollover or a collision with another object.

COMPREHENSIVE INSURANCE:  Coverage that reimburses you for damages to your own car from causes other than collision or general wear and tear; such as fire, theft, hail, glass breakage, flood, damage from animals, etc.

DEDUCTIBLE:  A specified amount of money you agree to pay if you file a claim for damages before your policy will pay the claim.  The deductible amount is usually subtracted from the total amount of your claim and then you are paid the remaining amount to cover your damages.

DEPRECIATION:  The decrease in the value of your car or its parts due to age and general wear and tear.

FULL COVERAGE:  A common term that people use to describe how much auto insurance coverage they have.  Although there is NO SUCH THING as “full coverage”, it is often used to imply the policy has more than just liability and includes Comprehensive and Collision.

GAP COVERAGE:  see “Loan/Lease Payoff Coverage”.

GARAGING LOCATION:  The place you primarily park your vehicle when you are not using it, generally this is your primary residence.

INDEPENDENT AGENT (AGENCY):  An insurance agent or agency not directly employed by an insurance company.  By definition, independent agents represent multiple insurance companies and can help you find the best fit for your personal auto insurance needs.

INSURANCE SCORE:  Also called “Financial Score” – is a numerical point system based on select credit report characteristics.  There is no direct relationship to financial credit scores used in lending decisions, as insurance scores are not intended to measure creditworthiness, but rather to predict risk.  Insurance companies use insurance scores for underwriting decisions, and to partially determine charges for premiums.  Insurance scores are applied in personal lines products, such as auto and homeowners.

LIENHOLDER:  A lender, organization, or person with a financial interest in your vehicle up to the amount of money borrowed or still owed on the vehicle.

LOAN/LEASE PAYOFF COVERAGE:  (Sometimes called “Gap” coverage.)  Pays the difference between what you owe on your vehicle and what your insurance pays if your vehicle is declared a total loss or stolen and not recovered, less your Comprehensive or Collision deductible.

LOSS:  The basis for an insurance claim.

MEDICAL PAYMENTS:  Coverage that reimburses you and your passengers – regardless of legal liability – for medical or funeral expenses stemming from bodily injury or death by accident.

MOTOR VEHICLE REPORT (MVR):  A state record of licensing status, violations, suspensions, and other infractions you have had over the last several years.

NO-FAULT INSURANCE:  Each insured person’s insurance company pays for certain financial losses, such as medical expenses and lost wages, regardless of who caused the accident.  In exchange for these benefits, the right to sue may be restricted in some cases.

PERIL:  The cause of a loss; such as theft, glass breakage, flood, hail, and fire.

PERSONAL INJURY PROTECTION (PIP):  A form of medical payments coverage under the no-fault concept.  PIP offers protection for expenses actually incurred, up to a specific, per-person dollar amount.  No-fault laws require drivers to buy PIP.

POLICYHOLDER:  The person who pays a premium to an insurance company in exchange for the protection outlined in an insurance policy.

PREMIUM:  The amount of money paid for an insurance policy.

PROPERTY DAMAGE LIABILITY:  Insurance that protects you against financial loss if you are legally liable to others for auto-related damage to their property.

RENEWAL:  A policy renewal takes place when the coverage of a policy is to continue by the insurance provider in exchange for your payment for another policy period (typically six months or one year).

RENTAL REIMBURSEMENT COVERAGE:  Coverage to pay your expenses to rent an auto if you have a loss covered under Comprehensive or Collision benefits.  Coverage is sold based on a daily amount of expense subject to a maximum limit.

SUBROGATION:  The process of recovering the amount of claims damages paid out to a policyholder from the legally liable party.  When a company pursues the legally liable third party, they are required to include the policyholder’s deductible in the recovery process.

TOWING & LABOR COVERAGE:  Addition to an automobile policy to pay the costs you incur by having your car towed or having it worked on by the side of the road.  The coverage does not cover the cost of any part necessary to get your car up and running, only the labor for the installation.  The amount payable is based on a specific amount of coverage purchased.

UNINSURED MOTORIST COVERAGE (UMC):  Provides coverage for a policyholder involved in a collision with a driver who does not have liability insurance or who does not have sufficient liability limits to pay for injuries to you or any person in your car.   UMC must be offered when you purchase liability coverage for your auto.  If you decline UMC, you must sign a declination waiver.

VEHICLE IDENTIFICATION NUMBER (VIN):  Your vehicle’s serial number assigned by the manufacturer.  The VIN identifies year, make, model, options, and other information that, by definition, is unique to your specific vehicle.