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Glossary
Plain-language definitions of insurance terms.
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Bodily Injury Liability
The portion of an auto liability policy that pays for injuries you cause to other people in an accident, up to the policy limits.
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Collision Coverage
Auto coverage that pays for damage to your own vehicle from a collision with another vehicle or object.
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Comprehensive Coverage
Auto coverage for non-collision damage to your vehicle: theft, vandalism, hail, fire, hitting an animal, etc.
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Diminished Value
The loss in resale value a vehicle may suffer after being repaired from an accident. Whether you can recover it from an insurer depends on the claim and your st...
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Full Coverage
An informal term, not an actual policy type, that usually means liability plus collision and comprehensive coverage. Exactly what it includes varies, so confirm...
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Gap Insurance
Optional auto coverage that pays the difference between what you owe on a loan or lease and the vehicle's actual cash value if the car is totaled or stolen.
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Medical Payments Coverage (MedPay)
Optional auto coverage that pays medical bills for you and your passengers after an accident regardless of fault, usually in smaller limits than PIP.
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No-Fault Insurance
A system used in some states where your own insurer pays your injury costs after an accident regardless of who caused it, which can limit when you may sue the o...
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Non-Owner Car Insurance
A liability policy for people who drive but do not own a car, providing coverage when they borrow or rent vehicles.
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Personal Injury Protection (PIP)
Coverage that pays medical expenses, and sometimes lost wages, for you and your passengers after a crash regardless of who was at fault. Required in some states...
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Property Damage Liability
The portion of an auto liability policy that pays for damage you cause to other people's property — usually their vehicle.
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SR-22
A certificate an insurer files with the state to prove you carry the required minimum liability coverage. Often required after serious violations, it is a filin...
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Total Loss
When the cost to repair a damaged vehicle exceeds a set percentage of its value, the insurer declares it a total loss and pays its actual cash value instead of...
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Uninsured Motorist Coverage
Auto coverage that pays for your injuries (and sometimes property damage) when the at-fault driver has no insurance. Required in some states, optional in others...
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Usage-Based Insurance
Auto coverage priced partly on your actual driving, measured through a mobile app or plug-in device that tracks factors like mileage, braking, and time of day.
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