Car Insurance Glossary

Actual Cash Value
This is the value of your car minus the accrued depreciation.

Adjustor
This is the person who will evaluate the damages to your car to settle the auto insurance claim.

Anti-Theft Recovery System
This is an electronic system installed in your car which allows easy traceability in the event that your car is stolen. Having this feature in your car, usually saves you some money on your auto insurance premium.

Balance Sheet
A financial statement that shows assets, liabilities, and net worth as of a specific date.

Benefit
This is the amount paid by the insurance company to you or your beneficiary against any claims.

Beneficiary
The person designated to receive the claims.

Business/Commercial Use
If you are using your car to do any business related travel, for example, delivery services, sales, etc...

Cancellation
To terminate a contract before its expiration date by either the insurance company or the policyholder.

Claim
This is the amount requested for reimbursement in the event of any involvement in auto accidents.

Collision Coverage
This pays for any repairs needed for your own car in the event of involvement in an accident. The payment is done after you have done paid your minimum deductible as per your contract policy.

Comprehensive Coverage
This is the amount paid by the insurance provider for damages occurring due to fire, certain natural disasters and vandalism.

Deductible
The minimum amount of a claim that the policyholder has agreed to pay.

Depreciation
A decrease in the value of any type of property over time.

Effective Date
The coverage begins date on an insurance contract (policy).

Effective Gross Income
Normal annual income including overtime that is guaranteed. The income may be from one/more sources.

Endorsement
These are defined as changes made to the original auto insurance policy.

Exclusion
Part of an insurance contract that excludes certain coverage conditions.

Garaging Location
This is where the insured car is parked most of the time.

Income Loss
This is an inclusion in your auto insurance policy in the event of your loss of income due to the involvement in an auto accident while you were driving the insured car.

Insurance Binder
A document that states the insurance is temporarily in effect. A permanent policy must be obtained before the expiration date.

Liability Coverage
This is the amount that the provider pays if you are responsible for the damages to the other vehicle/s involved in the accident.

Motor Vehicle Report
This provides information on your driving record.

Primary Driver
This is the person who drives the insured car most of the time.

Rental Car Reimbursement
This is an optional inclusion in the car insurance to pay for the rental car expenses in the event of your car getting stolen or damaged.

Secondary Driver
This is the other person insured on the car other than the primary driver.

Steering Restraint
This is a special provision in your car which makes it more difficult for a thief to reach out to the car’s ignition system. Having this feature reduces the premium on your car.