- Actual cash value
- What an item is worth today, after depreciation. Some policies pay this instead of replacement cost.
- Annual limit
- The most a policy will pay in a year.
- Bodily injury liability
- Pays for injuries you cause to other people in an accident.
- Bundling
- Buying more than one policy, such as home and auto, from the same insurer, usually for a discount.
- Claim
- A request to your insurer to pay for a covered loss.
- Collision coverage
- Pays to repair or replace your car after a crash, whoever is at fault.
- Comprehensive coverage
- Covers damage to your car from things other than a crash, such as theft, fire, hail or hitting an animal.
- Declarations page
- The summary page of your policy that lists your coverage, limits, deductibles and premium.
- Deductible
- The amount you pay toward a claim before the insurer pays.
- Dwelling coverage
- Pays to repair or rebuild the structure of your home.
- Endorsement
- A change or addition to a policy, sometimes called a rider.
- Exclusion
- Something a policy does not cover.
- Gap insurance
- Covers the difference between what you owe on a car loan and what the car is worth if it is totaled.
- Liability
- Your legal responsibility for injury or damage to others.
- Loss of use
- Pays extra living costs if your home can’t be lived in during repairs.
- No-fault state
- A state where each driver’s own insurance pays their medical costs, regardless of who caused the accident.
- Personal injury protection (PIP)
- Covers medical bills and lost wages for you and your passengers.
- Pre-existing condition
- In pet insurance, an illness or injury that started before coverage began. Usually not covered.
- Premium
- What you pay for your insurance, monthly or for the full term.
- Property damage liability
- Pays for damage you cause to someone else’s property.
- Reimbursement rate
- In pet insurance, the share of the vet bill the plan pays back after the deductible.
- Replacement cost
- What it would cost to replace an item new today, without depreciation.
- SR-22
- A form some states require to prove a high-risk driver carries minimum insurance.
- Underwriting
- How an insurer decides whether to cover you and at what price.
- Uninsured motorist coverage
- Protects you if you’re hit by a driver with no insurance or not enough.
- Waiting period
- The time after buying a policy before coverage starts.