Insurance Terminology



Actual Cash Value

Also referred to as ACV. The fair market value of property calculated using replacement cost less depreciation. 


A person who calculates insurance risks and premiums. 

Adverse Carrier

A term used to refer to the other party’s insurance company. 

After-market Parts

A term used to refer to parts made by a company other than by the original manufacturer.


A person who acts as a representative for a company and sells insurance. 


A process used to determine the value of property, or the extent of damage. This process is usually performed by an impartial expert.


The process of settling a dispute through an impartial party.

Assigned Risk

A driver who does not qualify for insurance in the regular market and as a result must get coverage through a state assigned risk plan.


The party that is legally responsible or liable for damages in an automobile accident.

Auto Insurance

Insurance which provides protection from losses resulting from owning or operating an auto. Insurance covers losses to the insured’s property as well as losses for which he is liable as a result of operating or owning an auto.

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A temporary agreement of coverage until the insurance policy is issued.

Bodily Injury

An injury sustained by an individual.

Bodily Injury Liability Coverage

Pays for damages for bodily injury or death resulting from an automobile accident for which you are at fault as well as provides legal Defense. This coverage is subject to the policy limits and conditions within your policy.

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The termination of an insurance policy by the named insured or company before the policy expiration date.


Any demand or request of payment under the terms of an insurance policy.

Claims Adjuster

An individual who is responsible for the investigation and settlement of a claim.


The individual presenting a claim.

Clue Report Comprehensive Loss Underwriting Exchange Report

This report provides claim history as reported by participating companies.

Collision Coverage

Pays for damage to an insured vehicle as a result of upset or impact with another vehicle or object.

Comprehensive Coverage

Pays for damage to an insured vehicle as a result of theft, flood, and vandalism or other covered perils as defined in your policy. This coverage is subject to the policy limits and conditions within your policy.

Customized Vehicle

Any vehicle that has been modified or has equipment or accessories that are not normally provided or installed by the original manufacturer.


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The part of a policy that displays the name, address, and the property being insured. Also shown are the location and description of the property, as well as the policy period and amount of coverage.


The amount of a claim you pay out of your pocket.


A loss of value in property as a result of wear, tear, and age.

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An addition to your policy and can also refer to a change made during the time period the policy is in force.


A calculation of the cost to repair damages to property.


Limitations found within a policy that exclude or omit coverage for certain losses or perils.

 Expiration Date

The date found on your declaration page that indicates when coverage ends.

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FS-1 Form

Form obtained from an insurance company that is licensed to do business in North Carolina that shows proof of insurance.

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Gap Insurance

A policy or coverage that comes into play when a vehicle is totaled or stolen. Gap coverage takes over when the amount that is owed to a financial institution exceeds the actual cash value of the vehicle.

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Inception Date

The date found on your declaration page that indicates when coverage begins.


The act of inspecting and verifying the physical condition of a vehicle or property.


A system that transfers loss to an insurer in exchange for a payment of premium.

 Insurance Fraud

The act of falsifying the facts of an accident to an insurance company to obtain payment that would not have been otherwise made.


A person or individual covered by an insurance policy.


A company that provides insurance coverage.

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A legal obligation or responsibility for the injury or damage suffered by another individual.

 Liability Coverage

Insurance that provides coverage for claims as a result of injuries or damages to individuals or their property.


An organization that holds a financial interest in property.


The maximum amount as specified within your policy to which your company will provide protection.


Any measurable cost of property damage and or bodily injury that has been incurred by an individual.

 Loss of Use

Compensation to a third party claimant for losses incurred as a result of the inability to use property which has been damaged in an accident.

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Medical Payments Coverage

Pays for medical expenses incurred as the result of an auto accident. This coverage is subject to the policy limits and conditions within your policy.


To represent written or verbal statements that are false or misleading

 Motor Vehicle Report

A report listing accidents and violations used by insurance companies to verify information provided by applicants.

 Multi-Car Discount

A discount for individuals who insure more than one vehicle on a policy.

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Nation Safe Drivers

One of the largest suppliers of towing and roadside assistance as well as additional insurance related products.


The failure to exercise care as expected by a reasonable person in a similar situation.


Occurs when an insurance company chooses not to renew a policy.

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A source of danger that can cause a loss to occur.

 Physical Damage

Damage to property


The person listed on the declaration page of an insurance policy.


Monies paid in exchange for insurance coverage.

 Property Damage Liability Coverage

Pays for damages to non-owned property as a result of an accident for which you are at fault and also provides legal defense. This coverage is subject to the policy limits and conditions within your policy.

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A listing of premium charges given to an individual based on information provided such as vehicles, drivers, and their driving records.

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Renewal Date

The date your renewed policy begins.

 Rental Imbursement

An optional coverage that pays a specified amount towards a rental vehicle when your covered vehicle is disabled as a result of a covered accident.

 Roadside Assistance Coverage

An optional coverage that provides services such as tire change, locksmith services, and battery jump-start.

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Damaged property claimed by an insurance company after the payment of a claim.


The process of seeking payment including any deductible from the liable party after your company has settled a claim at your request.

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Third Party

A Person not party to an agreement but holds an interest in that agreement.

 Total Loss

Property that has incurred damage to an extent that repair is unreasonable or not economically practical

 Towing and Labor Coverage

An optional coverage that pays a specified amount if your vehicle is towed or requires roadside assistance.

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Provides higher limits of coverage above the limits provided by an individual’s auto and homeowner’s policy.


The process used by a company to determine if insurance coverage will be afforded.

 Uninsured Motorist Coverage

Pays for property damages and or bodily injury caused by an uninsured motorist. This coverage is subject to the policy limits and conditions within your policy.

 Underinsured Motorist Coverage

Pays for damages that exceed the amount of coverage carried by a driver who has insufficient coverage amounts to cover your damage. This coverage is subject to the policy limits and conditions within your policy.

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The malicious destruction of property.

Vehicle Identification Number

A 17 digit number assigned to vehicles manufactured in the United States after 1980 

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