Insurance Glossary

Published: 11/04/2016

 

Click the word to read its definition

A B C D E F G H I L M N O P R S T U V W

 

A
Accident
A loss that occurs at a specific time and place.
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Accident Threshold
A specific dollar amount that must be paid out on a particular claim type, before it can be considered chargeable, which is defined by each state and program filing.
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Accidental Death (AD)
Provides payment, up to the limits of coverage selected, in the event that an individual insured on the policy is fatally injured in a motor vehicle accident.
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Active Driver's License
Also known as a valid driver's license and indicates a driver's license is in good standing with the DMV from which it is issued.
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Actual Cash Value
The cost to replace an item of property at the time of loss, less an allowance for depreciation. Often used to determine the amount of reimbursement for a loss.
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Actuary
A person whose principal function is to make the technical calculations required for the pricing of insurance policies.
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Additional Driver
One who is protected by an insurance policy other than the named insured.
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Additional Insured
A company or person who is protected under your insurance policy if they are named in a judicial process due to an accident that is deemed the policy holders fault.
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Additional Interest Insured
A company or person who is protected under your insurance policy if they are named in a judicial process due to an accident that is deemed the policyholder's fault.
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Age Group A method of grouping cars according to the year of manufacture.
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Agent
A person who represents the company and sells insurance on a commission basis.
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Agent Licensing
Agent Licensing is a department that handles business transactions and agreements between a company and its independent agents or brokers.
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Anti-Theft Device
Is any device used to prevent or deter the unauthorized appropriation of a vehicle. Active anti-theft systems are designed to track a vehicle and automatically contact a response center to begin the recovery process. Passive anti-theft devices prevent or deter the unauthorized appropriation of a vehicle with electronic car alarms, simple wheel locks, and such.

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Anti-lock Braking System (ABS)
It is a computerized safety system on motor vehicles which prevents the wheels from locking while braking.

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Applicant
A person who provides information and signs a written application for insurance.
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Application
A form received from an agent for the writing of a policy.
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Artisan Risk
The risk from a vehicle that is used to carry tools and supplies between the insured's home and job site.
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Assigned Risk
Risk that is so high that it cannot be accepted in the insurance market and required liability must be obtained through the state.
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At-Fault
The person or persons held legally responsible for accident-related damages.

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Auto Insurance
A vehicle insurance policy that provides financial protection for the insured car owner and/or operator in the case of an accident. It can cover vehicle damage or loss, physical damages, and other liabilities related to the accident.

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Auto Theft
Comprehensive insurance normally covers the loss of a vehicle due to theft.
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Automated Binding
Temporary insurance contract providing coverage until a permanent policy is issued. Coverage is bound as of the date/time the agent calls, emails or faxes a copy of the application and is given a binder number which will become the policy number when the application is processed.
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B
Binder
A temporary contract between the insurance company and the insured.
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Binding Authority
The ability to provide immediate coverage on behalf of the insurer.
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Bobtail Coverage
Insurance that protects a tractor when it’s operated without a trailer, regardless of whether it is dispatched for a job. Also called Deadhead coverage.
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Bodily Injury (BI)
Bodily injuries or death caused by an accident.
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Bodily Injury Liability
Pays damages for bodily injury or death resulting from an accident for which you are at fault and provides you with a legal defense. Coverage is subject to your policy terms, limits and conditions.
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Broker
Representative of the insured rather than the insurance company with which they transact business.
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Business Days
A business term used to refer to normal days of operation, typically Monday-Friday.
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C
Cancellation
The termination of the insuring agreement before the end of the term, which can be requested by the insured, insurance company or premium finance company.
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Cancellation Notices Before Renewal
If the insured received a Cancellation Notice Before renewal, chances are that the notice received is a form the state requires insurance companies to send. The notice generally states that if one chooses not to pay his or her renewal, the policy will expire, which is essentially the same as a cancellation with regards to insurance coverage. The purpose of the notice is to make one aware that one needs to pay his or her renewal on time to maintain his or her insurance coverage as required by the state.
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Carrier
The company responsible for the insurance policy.
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Claim
A request for payment of the insurance benefits provided by a policy.
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Claimant
A person who makes a claim for payment due to a loss, other than the insured
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Claims Adjuster
Person employed by or acting on behalf of an insurance company to evaluate and settle insurance claims. The adjuster must determine the cause of loss, whether the loss is covered by the policy, the value of the loss and the amount of loss payable by the policy.
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Collision Coverage (Coll)
Provides protection for your vehicle when damage occurs as a result of a collision with another object, without regard to who caused an accident. This coverage is optional, and may extend to vehicles rented and/or borrowed by the policy holder. Please refer to your policy for exclusions or limitations.
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Collision Damage Waiver (COLDW)
Enhances the financial protection provided through collision coverage. This amendment to the policy contract waives the deductible on collision coverage in the event that an insured vehicle is damaged by an uninsured vehicle in a collision. The Collision Deductible Waiver is only available if the insured has both Collision coverage and Uninsured Motorist Bodily Injury coverage on his or her policy.
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Commercial Driver’s License (CDL)
A special license that is needed by those who will be operating a tractor, a vehicle over 26,000 GVW or a vehicle with eight or more passengers.
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Commercial Vehicle
Any vehicle that is used for business purposes.
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Commission
A percentage of the premium paid to an agent or broker in return for business procured by the agent or broker.
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Compensatory Damages
Damages that reimburse an injured party for losses that were actually sustained.
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Comprehensive (COMP) or Other Than Collision Coverage (OTC)
The purpose of COMP coverage is to pay for repairs or the replacement of an insured vehicle when it is damaged by something other than a collision. This may include damage from vandalism, fire, hail, wind, theft or some other peril. This coverage usually pays for the repair or the replacement, less the amount of the listed deductible.
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Comprehensive Loss Underwriting Exchange (CLUE)
A consumer reporting agency that provides specific information regarding claims that were actually reported by or that possibly relate to an individual.
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Conditions
Portion of an insurance policy that describes the rights and duties of the insured and the insurance company under the policy.
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Contract
A legal agreement between two competent parties that promises a certain performance in exchange for a certain consideration.
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 Coverage
The amount of protection and benefits included in an insurance policy contract.

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Continuously Insured
Refers to the length of time you have maintained insurance on your vehicle without a lapse in coverage.

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Coverage Limits
The maximum amount of protection purchased by the insured for a specific coverage. Minimum Limits are often mandated and required by state law.

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D

Damage
Physical harm that impairs value, usefulness or function.

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DBA Name
A name that a company is known by to the public, but is not the company’s legal name.
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Declaration Page
It is your auto insurance coverage summary, and lists the insurance company, its address, name of the policyholder, starting and ending dates of coverage, and the actual coverages given in the contract, including the covered locations and amounts.
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Deductible
The amount the insured is required to pay in a loss before any payment is due from the insurance coverage. The insurance company pays the remainder of each covered loss up to the policy limits.
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Definitions
Section of the insurance policy that clarifies the meaning of certain terms used in the policy.
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Department of Insurance
A government agency located in each state that regulates the insurance industry within the state. This agency approves the rates and programs an insurance carrier can put in place. However, it does not set the rates for the carrier. The agency also sets insurance laws and statutes for the state.
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Depreciation
A decrease in the value of property over a period of time due to wear and tear or obsolescence. Depreciation is used to help determine the actual cash value of property at the time of loss.
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Discount
A deduction from the usual costs of your premium, offered under certain criteria.
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Do Not Insure
A driver status reserved for listed drivers who are either unknown to the policyholder, deceased, or not in household. These drivers are not protected by the policy.
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Draft
Similar to a check, but requires approval from the insurance company before the draft will be honored at the bank.
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Driver Assignment
Any driver listed on the policy is covered to drive any vehicle on the policy. That being said, the system automatically assigns drivers to vehicles just for the purpose of rating the policy. Generally, the driver who poses the greatest risk to the company is the highest rated driver and is assigned to the highest rated vehicle. This is done to ensure that the premiums charged are in line with the risk being covered on the policy.
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Driver Improvement Course
Voluntary classes either offered through or approved by Departments of Motor Vehicles to refresh and/or enhance driving skills. These courses may make drivers eligible for discounts on their premiums if they meet eligibility requirements.

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Driver Status
Refers to how a driver has been rated (covered drivers), excluded (not covered) or listed (residents in the household who are not active drivers) in a policy.
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Driver Not Rated
A driver status which indicates the driver is not rated and not insured. This status is usually present when a driver relationship status is duplicate or unknown.
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Duplicate Driver
Duplicate drivers are possible additional drivers or household members discovered using consumer reports at new business. These possible drivers can be in addition to the drivers entered by the agent during the quoting process. If the driver is in fact the same as a driver/householder member already listed, the agent can indicate they are a "Duplicate" and should not be considered in the policy rating.
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E
Earned Premium
Coverage is provided throughout the policy period; therefore, the premium is earned by the company as the policy matures. The portion of written premium applicable to the expired or used part of the period for which the premium has been charged is the earned premium. The full premium for a policy is considered “written premium” as of the date the policy is issued.
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Effective Date
The starting date of a policy when the insurance protection begins.
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Electronic Funds Transfer (EFT)
Is the transfer of funds from your credit card, checking, or savings account to your monthly bill.
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Employer’s Non-Owned Coverage

A type of liability coverage for when a vehicle owned by an employee has to be used for business. This cannot be a vehicle that is used regularly.

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Endorsement
An amendment added to and made a part of the insurance contract for the purpose of changing the original terms.
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Errors/Omissions Insurance (E & O)
Professional liability coverage that protects the agent against liability for committing an error or omission in the performance of professional duties.
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Excluded Driver
This is an individual that is not protected by the policy and specifically so stated on the proper exclusion form. This person lives in the insured's household but will not be regularly driving one of the vehicles insured on the policy because her or she does not have regular access to or is not permitted to drive any of the vehicles on the policy. Excluding a person means that the insurance company, unless required to do so by law, will not cover claims for accidents that result from the excluded person driving a vehicle insured under the policy. Reasons for excluding a person may include: but are not limited to the following example situations: There is a The person in the household who is not licensed and therefore is not permitted to drive, There is a person in the household who has other insurance on their a vehicle not included in the policy, and will not drive any of the vehicles on this policy,. There is a person in the household who, for some other reason, does not, and or is not permitted to drive any of the vehicles on this policy.
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Exclusion
Something not covered by the policy and specifically so stated in the policy contract.
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Expiration Date
The date when your current insurance policy expires or ceases to be in effect. This date can be found on your current Declaration (or "DEC") page, insurance identification card or recent cancellation notice.
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Exposure
A condition or situation that presents a possibility of loss.
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F
Federal Highway Administration (FHWA)
Part of the government that regulates transportation of people and goods on the interstate.
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Field Representative
An employee of an insurance company who travels a given territory and calls on insurance agents or brokers in the interest of the company.
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File and Use
Method of rate and form ratification used by some state insurance departments that allows a company to begin using forms or rates as soon as they are filed with the department. The department eventually reviews the filing and officially accepts or rejects it.
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Financial Responsibility Law
A statute which requires a motorist to provide evidence at the time of licensing of his/her ability to pay damages in the event of an accident. The evidence can be supplied either in the form of a policy or a bond.
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Flat Cancellation
The cancellation of an insurance policy as of its effective date, before the insurer has assumed liability. This requires the return of paid premium in full since the insured has never been covered under the policy.
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FR-44
The state of Florida has approved a new statute that requires operators convicted of DUI on or after October 1, 2007, to maintain minimum liability limits of 100/300 for BI (Bodily Injury) and 50 for PD (Property Damage). A form FR-44 will be required to verify the higher limits, and the higher limits must be maintained for three years. When a policy cancels, an insurance company will be required to submit an FR-46. This will notify the state that the policy has canceled.
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Fraud
A deliberate misrepresentation that causes harm
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Fraud Fee (CA)
The fraud fee is charged by the state of California to assist in researching and identifying cases of insurance fraud. This is a per vehicle fee assessed by the state per year. This money is not kept by the company
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Full Tort
The insured and members of his or her household have an unlimited right to recover financial compensation for injuries caused by other drivers. You may seek recovery for all medical and out of pocket expenses including pain and suffering and other non-monetary damages as a result of injuries caused by other drivers.
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Full Coverage
Full coverage refers to a policy with most coverages purchased. Usually this includes liability coverages, comprehensive coverage, collision coverage, towing, rental reimbursement, uninsured motorist coverage (which is when an uninsured driver damages the insured car), and medical payment coverage. All of these are subject to your specific policy.  Please refer to your policy for exclusions and limitations.

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Funeral Expense
Funeral Expense coverage will pay out up to the limit on the declarations page for the cost of a funeral for an insured person who died as a result of a covered auto accident.
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G

Garaging Location
Is the zip code where your vehicle is parked when not in use and usually corresponds to your primary residence.
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Garagekeepers Legal Liability Insurance

Coverage designed for towing businesses to protect a customer’s vehicle from vandalism, theft, fire, explosion or collision while the vehicle is parked in your garage for servicing or storing.

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Gap Insurance
An optional insurance coverage for newer cars that can be added to your collision insurance policy. It may pay the difference between the balance of a lease or loan due on a vehicle and what your insurance company pays if the car is considered a covered total loss.
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Glass Waiver
Is an additional option in your coverage that pays to repair or replace a broken glass in your vehicle without a deductible.
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Grey Market Vehicle
A vehicle that has been imported to the U.S. through channels other than the manufacturers' official distribution/import system. While this does not mean the vehicle was imported illegally, the vehicle may not conform to U.S. safety regulations.
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Gross Vehicle Weight (GVW)

A fully loaded vehicle’s total weight capacity. Calculate it by adding the weight of the vehicle plus the weight of the biggest load it can carry. The manufacturer of the vehicle will also have the information.   

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H
Hazard
Something that increases the chance of a loss.
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Hired Auto Coverage
Provides liability coverage for a vehicle that you do not own and is not listed on your policy, but it is leased, rented, borrowed or hired.
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Hurricane Catastrophe (HurCat) Fee
The Hurricane Catastrophe (HurCat) Fee is required by the state of Florida. The insurance company collects this fee on behalf of the State of Florida in order to remain in compliance with Florida law. The insurance company does not keep the fee. This money is placed in a fund to help offset the cost of losses resulting from hurricanes and other natural catastrophes in the state. The charge is 1.3% of the total policy premium. This is collected at new business, and if you process endorsements that increase the premium, 1% of that increase will be assessed as well.
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I
Incomplete Chassis
A vehicle built with most of its necessary running parts (engine, transmission, axel, etc.) but not defined passenger areas. These vehicles (mainly trucks and vans for PPA purposes) are then sold to other companies who will complete the vehicle for a defined purpose. Example - truck built with only a cab, but no bed.
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Indemnify
To restore a party who has had a loss to the same financial position that would have existed had no loss occurred.
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Independent Agent
Agent who represents many insurance companies, rather than a single company. Also referred to as a non-exclusive agent.
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Index MVR
A state assigned license number given to drivers without a U.S. license. The number is assigned for violation and accident and tracking purposes. These driver's license numbers typically begin with X and are not considered valid license numbers.
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Installment Fee
The installment Fee is charged each month with your monthly bill. This fee is charged for the service of allowing monthly billing as opposed to requiring the full term premium be paid up front. To avoid the installment fee, the policy can be paid in full at renewal.
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Installment Premium
One or more payments made by an insured until the entire policy premium is paid in full.
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Insurable Interest
Any actual, lawful and substantial economic interest in the safety or preservation of the subject of the insurance from loss or destruction or financial damage or impairment.
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Insurance
An agreement that enables a person, business or organization to transfer a loss exposure to an insurance company which indemnifies the insured for covered losses and provides for the sharing of the costs of losses among all insured.
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Insurance Company
An organization chartered under state or provincial laws to act as an insurer. In the United States, insurance companies are usually classified as fire and marine, life, casualty and surety companies and may write only those kinds of insurance which are specifically authorized in their charters. Many company charters have now been brought to include several of these types
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Insurance ID Card
Identifies you as the person insured and contains information about what your insurance policy includes.
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Insurance Policy
Broadly, the entire written contract of insurance; more narrowly, the basic written or printed document, as distinguished from the forms and endorsements added thereto.
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Insured
The party to an insurance agreement to whom or on behalf of whom, the insurer (company) agrees to indemnify (reimburse) for losses, provide benefits or render service.
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Insured Driver
This person will be regularly driving or has regular access to drive at least one of the vehicles on the policy. After this person is added to the policy, an insurance company will likely cover claims associated with this driver, just as a company would for the named insured, subject to terms, limits, and conditions of the final policy contract.
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Insurer
The insurance company who issues the insurance policy.
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Insuring Agreement
The section of an insurance policy that describes what is covered and the perils the policy insures against.
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International License
A license issued by a country other than the United States. The United Nations Treaty gives residents of one country the right to drive in other countries using the license issued by the government where they live. Infinity often insures those with Mexico licenses and those covered under California's AB60 law.
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L
Lapse in Coverage
A lapse in coverage means that there is a period of time when the policy was not in effect. This occurs either when one cancels and rewrites his or her policy, or when a policy expires and the renewal is paid later than the day it is due.
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Late Fees
An additional charge that is added to the insured's balance when the payment is received after the due date.
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Law of Large Numbers
Principle that states that the more examples used to develop any statistic, the more reliable the statistic will be.
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Legal Liability
A comprehensive legal term that describes the condition of being actually or potentially subject to a legal responsibility.
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Leased Vehicle
It is the extended rental of a vehicle for a definite period of time, during which the vehicle remains the property of the original owner, who is listed as an insured in the vehicle's insurance policy.
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Lemon Law Vehicle
A lemon law vehicle is typically a vehicle which has a substantial defect and cannot be fixed after a number of attempts. These vehicles are typically returned to the manufacturer. The vehicle is also registered as a "Lemon Vehicle." The manufacturer may opt to resell the vehicle but with the disclosure that the vehicle is considered a lemon. These vehicles are acceptable to insure.
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Lessor
The leasing company that owns the vehicle is the lessor. The lessor has a financial and a liability interest in the vehicle.
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Lessor Liability Endorsement
Additional coverage that allows the policyholder to carry lower liability limits for his personal protection while the company extends higher limits to the lessor.
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Liability Insurance
Type of insurance that protects an insured from financial loss arising out of liability claims by transferring the burden of financial loss from the insured to the insurance company.
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Lien
A right to keep property belonging to another person until a debt is paid.
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Lien Holder
The company that loans the money to purchase the insured vehicle and holds the title of the vehicle until the loan is repaid.
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Limit
The maximum payment amount that an insurance policy will provide in the event of a claim.

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Limits of Liability
The provisions of your policy that determine the maximum amount your insurance company will pay in the case of a claim.
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Limited Comprehensive
In consideration for a discount to the comprehensive premium, the policy is amended so that certain loss types are excluded from coverage. See state information for specifics.
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Limited Tort
Limits the right of the insured and members of his household to seek financial compensation for injuries caused by other drivers. The insured and members of his household can recover medical and other out of pocket expenses but not for pain and suffering.
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Loan/Lease Payoff Coverage
Coverage for the amount owed on a total loss or irrecoverable vehicle, minus the Comprehensive and/or Collision deductibles.
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Loss Ratio
Method used to determine an insurance company’s success in covering current losses out of current premium income
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Lyft
A ride-sharing service which allows users to arrange for transportation by private passenger vehicles. Individuals can sign up for this service and use their private vehicles to provide transportation in return for payment. See state info regarding acceptability.
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M
Manual Rating
A method for determining the cost of an insurance policy using pre-determined rates, usually obtained from a rate book or manual.
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Medical Payment (MP)
The purpose of Medical Payment (MP) coverage is to pay medical expenses for the insured and the insured occupants of the insured vehicle for injuries caused by an auto accident, regardless of fault in the accident. The amount paid per injured person in a single accident cannot exceed the listed limits of liability that were selected.
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Medical Payments Coverage
Allows reimbursement of reasonable expenses, medical and funeral, incurred because of bodily injury sustained as the result of an accident.
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Misrepresentation
Written or verbal misstatement of a material fact involved in the contract on which the insurer relies.
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My Choice
My Choice, also known as Combo Rater 2.0, is a program in which policy applicants can choose between the policy levels of Economy, Standard and Deluxe. This occurs after the applicant has been placed in a program of Low Cost, Value Added or Premier. Dependent on what option the insured chooses, the policy terms and conditions would be adjusted. These adjustments can effect everything from ability for the coverage to transfer to a rental, permissive use, replacement vehicle time-frames etc.
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N
NAIC Number
A number that the National Association of Insurance Commissioners (NAIC) assigns to each individual underwriting company. The number can be found on the primary page of an existing policy or under the State Information tab.
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Named Insured
The person or organization designated in the policy as the insured.
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Named Non-Owner Policy
Issued to a person who does not own or have regular use of an automobile
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Negligence
The lack of reasonable care that is required to protect others from the unreasonable chance of harm.
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New Business
The beginning of an insuring agreement submitted on an application by an agent or broker.
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Non-Renewal
A notification that coverage will not continue after the expiration date.
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Non-Sufficient Funds Fees (NSF Fee)
An additional charge that is added to the balance of the policy once a payment is returned by the bank for any reason.
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Non-Trucking Liability

Pays for damage and injury caused by your CV while it is being used for personal use, such as using the truck on an off day to go to an event with friends.
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Non-Owned Vehicle Insurance

Extends your coverage to vehicles that your employees own and use for business regularly

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O

Occasional Driver
Person or persons who are not the primary or principal driver of the insured vehicle.

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Occurrence
A loss that occurs at a specific time and place or over a period of time.
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On-Hook Towing Coverage
Pays for any damages that happen while you are towing a vehicle.
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Optional Basic Economic Loss (OBEL) coverage
An optional insurance that is offered to New York residents in addition to the auto insurance coverage that is mandated by the state for car owners. OBEL coverage is a supplement that insures motorists above the required $50,000 no fault coverage that every vehicle owner must possess by law in New York State. The OBEL supplement offers an additional $25,000 of coverage for injuries or lost wages that are incurred due to a serious accident. In addition to protecting the policy owner, OBEL also covers passengers and any pedestrians that are injured during a motor vehicle accident that is associated with the policy holder or policy holder's immediate family.
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P
Penalty of Perjury Form
Only applicable in California. A written statement made by the insured driver under penalty of perjury, that at the time the violation and/or accident occurred, he or she was operating the motor vehicle during the hours of his or her employment.
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Pending License
A pending license is typically a license issued when the driver is waiting to receive an official state license. The meaning of "pending" can vary between states and the reason the license is pending can vary.
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Peril
The cause of a loss such as a collision, fire or hailstorm.
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Permanently Attached Equipment (PAE)
Must be bolted or welded to an insured commercial vehicle. This could include carpet cleaning equipment, cranes, ladder racks, tool boxes and pressure washers.
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Personal Injury Protection (PIP)
May pay for the medical, funeral and other accident-related expenses of the insured person, people in the insured vehicle and pedestrians struck by the insured vehicle regardless of fault. Coverage is subject to your policy terms, limits and conditions.This coverage is not available in all states.
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PIPNI - Personal Injury Protection Named Insured Only
Deductible for Personal Injury Protection (PIP coverage) applied to the name insured only.
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PIPNR - Personal Injury Protection Named Insured and Resident Relative
Deductible for Personal Injury Protection (PIP coverage) applies to the name insured and dependent resident relatives.
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Placard
Placed on a vehicle to let the public know something about the materials being carried. Could say things like “Flammable” or “Hazardous.”
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Policy Activity
A listing of all transactions that have occurred on the policy.
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Policy Fee
An additional amount charged at new business to cover the company’s processing expenses.

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Policyholder
See “Insured.”

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Policy Expiration Date
The date when your current insurance policy expires or ceases to be in effect. This date can be found on your current Declaration (or "DEC") page, insurance identification card or recent cancellation notice.

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Policy Jacket
Document used to assemble an insurance policy. Contains general conditions or the declarations page, but provides no coverage in and of itself. A policy form must be attached to make it a complete policy. Current policy jackets can be located on the Document tab as part of the App Packet or Renewal Packet. To ensure the current policy jacket is reviewed, check the most recent packet. If a policy jacket is not included, move to previous packets until a policy jacket is included.
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Policy Limit
The maximum the company will pay in the event of a covered loss.
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Policy Period (Policy Term)
Period of time during which the policy contract provides active protection
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Policy Rewrite
The process of placing a policy back in an active status with a lapse in coverage and new effective dates.
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Premium
Is the amount of money charged by an insurance company to provide insurance coverage.
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Premium Finance
When a policy's complete premium at new business is financed by a third party company. These policies are paid in full by a third party company. The policyholder makes monthly payments directly to the premium finance company to keep the policy active. The premium finance company can cancel the policy if payments are not made.
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Premium Notice
A notice which provides the amount and the date that premium is due to continue coverage.
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Primary
A term used to refer to the policy that will respond first in the event of a loss covered by two or more policies.
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Primary Residence
Your actual current place of residence. Primary residence information should be on file with your insurance company during any active policy term.

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Primary Use
Describes what your vehicle is mainly used for and can include descriptions like business, farm, or leisure, among others.

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Principal Driver
Person who drives the car for the most time.

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Prior Approval
Method of rate and form ratification used by some state insurance departments that requires a company to obtain official approval before using new forms or rates.
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Private Passenger
A four-wheel automobile of the private passenger type – i.e. sedans, station wagons, etc. also includes small trucks when not used in a commercial operation.
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Pro Rate Cancellation
A method of canceling a policy before it expires and returning to the policyholder an amount of premium proportional to the uncovereddays of the policy.
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Processing fee - Good Driver (ProcGDD)
A processing fee applied to CA Special polices at renewal. This fee is $20 if all drivers qualify for Good Driver Discount or $25 if all drivers do not qualify for Good Driver Discount. This fee is distributed over the monthly payments.
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Producer
Term commonly applied to an agent, solicitor, broker or other person who sells insurance, producing business for the company and being paid a commission by the company.
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Property Damage (PD) Coverage
Pays for damage the insured person causes to someone else's property. This coverage also pays for your legal defense costs if you are sued. Please refer to your policy for exclusions and limitations.
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Proximate Cause
The event that sets in motion an uninterrupted chain of events contributing to the loss.
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Q

Quote
Tells you what the company will charge to insure you for the amount of coverage you need.
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R

Radius of Operation

The maximum distance between the garaging location and the point of delivery. Some insurance companies have limits on how far of a distance this can be for certain types of businesses.

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Rate
The unit or units used to determine the final premium for a specific policy.
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Rate Manual
A guide containing the rates for various coverages offered by an insurer
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Rate Revision
An insurance company can revise the rates on each state, which will cause a change in premiums. Revisions affect all policies and can cause an increase or a decrease in premium. Rate adjustments are sometimes necessary for insurance just as they are for many products.
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Rated Driver
An active driver who is protected if an accident occurs while driving an insured vehicle. Can be listed in IPS with the status of "Insured."
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Rating
The determination of the premium to be charged for coverage of a risk. It is based upon risk characteristics and the actuarial calculations regarding the chance of loss.
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Reciprocal
Reporting information from one state to another state.
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Reinstate
The process by which a policy is placed back in force without lapse after it was cancelled or has expired.
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Renewal
The offer to continue an insurance contract beyond the expiration date.
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Renewal Fee
A renewal fee is basically an administration fee charged to renew the policy. It offsets the cost of running and reviewing reports to aid in determining your renewal rate.
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Renewal with Lapse
When a policy has expired at the end of a six- or 12-month period and the policy is reinstated after the expiration date. There is no coverage between the expiration date and the new effective date.
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Rental Reimbursement (RR)
Optional coverage that helps pay rental vehicle costs when your insured vehicle is disabled as the result of a covered accident or loss, up to the predetermined daily limit.
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Repair Plates
License plates given to commercial vehicles that are used to repair, alter, recondition, equip or tow motor vehicles or trailers for the public. Most insurance companies will not insure vehicles with these tags since they are not made for any specific vehicle.
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Repossession
A type of work allowed for towing companies which entails the reclaiming of a vehicle or other item because payments have not been made on them.
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Return Premium
A refund of the premium to the policyholder caused by cancellation, rate reduction, reduction in the amount of insurance or similar reasons.
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Rewrite/Reinstatement
Essentially, the difference in rewriting a policy and reinstating a policy is a lapse in coverage. If the policy is rewritten, a gap in the coverage is created from the day and time the policy canceled through the day and time a payment is received to place the policy back in force. Reinstatement, on the other hand, means there is no lapse in coverage; the company restarts the policy effective the same day and time the policy canceled, so there is no gap in coverage. The company may require a No Loss Statement before agreeing to reinstate the policy
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Risk
Any chance of loss to the insured or to the property to which the insurance policy relates.
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Roadside Assistance Coverage
Infinity offers roadside assistance through certain insurance products. If roadside assistance is not included as part of your insurance coverage.
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S

Salvage Titles
A state typically issues a salvage title when an insurance company declares a vehicle to be a total loss, where an accident, theft or other damaging incident has rendered the vehicle more expensive to repair than to replace.

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Second Named Insured
An additional individual or corporation designated by name as an insured person(s) in a policy.

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Short Rate Cancellation
A short rate cancellation balance is the sum of the premium owed for days covered, fees owed, and a short rate penalty. The short rate penalty is a percentage of the premium that an insurance company would have collected if the policy would have remained active for the entire policy term.
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Sole Proprietorship
A one-owner company that is not registered with the state as an LLC or corporation. The owner of a sole proprietorship is personally responsible for the debts and liabilities of the company and reports the company's losses and profits on his or her personal taxes.
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Special Equipment Coverage
Coverage for custom parts and equipment that are permanently attached to your vehicle.
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Special Glass Coverage (SGC)
The purpose of the Special Glass Coverage (SGC) is to augment the financial protection provided by comprehensive coverage. In certain circumstances this coverage can pay for damage to the insured vehicle's window glass with no deductible owed. Special Glass Coverage is only available if there is comprehensive coverage on the insured vehicle.
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SR-22
An SR22 is a certificate of financial responsibility required by some states for individuals with specific driving records. SR22s are not required for all drivers. Typically, courts will require a driver to file an SR22 if he or she has been convicted of certain serious driving violations, such as DUI, reckless driving, or driving without insurance (in a state with mandatory liability coverage.) The SR22 filing requirement usually stays in place over a court-defined period of time following the violation conviction. The SR22 certificate is filed directly with the state by your insurance company. Infinity charges a fee to file this form, and the fees differ by state.
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SR-22A
A form of SR-22 only issued in the state of Georgia which proves financial responsibility for a specific driver. This form usually has specific guidelines or rules that apply.
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SR22 Safety Responsibility Law
A statute which requires certain motorists to provide evidence of their ability to pay damages arising out of defined accidents. Such evidence is required at the time of the accident.
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Stacked Liability
Limits from one vehicle on a multi-car policy can be added to the liability limits of another vehicle on the same policy, only in a limited number of states.
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Step Down Endorsement
Limits for bodily injury and property damage liability afforded by the policy to an insured person (other than someone listed on the policy) will not exceed the amounts necessary to satisfy the minimum requirements of the financial responsibility law of the state in which the bodily injury and property damage policy was written.
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Subrogation
When a car insurance company a makes payment to an insured for a loss, the company takes over the insured's right to collect damages from any other person responsible for the loss. The process of recovering is called subrogation. Subrogation shifts the ultimate cost of a loss to the party most responsible for causing the loss.
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Surcharge
An additional charge in insurance premium to offset an increase in exposure not contemplated in normal rates (i.e., surcharge for high-performance vehicles).
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T
Term
A period of time for which a policy is issued.
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Territory
Defines geographic location or locations designated by the company for rating purposes.
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Theft prevention (ATP) Fee
A mandatory fee applied to all auto policies written in the state of Texas. This fee is turned over to the state and does not serve to profit Infinity. The fee applies to a Texas fund to aid in the prevention of auto-thefts within the state.
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Tier Determination
An insured's tier is based on any accidents on his or her record, prior insurance coverage, and any prior lapses in coverage. For instance, someone with no accidents, no lapses in coverage, and very high liability limits on their prior policy may be placed in a more favorable tier compared with someone with two accidents on record and no prior insurance.
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Towing and Labor
The purpose of Towing and Labor coverage is to pay for charges associated with the towing of a disabled vehicle and labor performed at the site of vehicle disablement. Payments will not exceed the listed limits selected. This coverage is only available if collision and comprehensive coverage is purchased.
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Trailer Interchange Agreement

A written contract between trucking companies or truckers to loan trailers to one another.

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Trailer Interchange Coverage

Protects the trailers that you do not own when you are hauling them through a trailer interchange agreement.

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U
Uber
Uber is a service which allows users to arrange for transportation using both commercial taxi services and private passenger vehicles. Individuals can sign up for this service and use their private vehicles to provide transportation in return for payment. See state info regarding acceptability.
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Underinsured Motorist Coverage (UIM)
Someone who has less liability coverage than is required by state law, or less coverage than is necessary to reimburse for damages due to a given accident.
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Underinsured Motorist Bodily Injury (UIMBI)
Provides coverage for injured persons in a vehicle when the person who is at fault for the accident does not have enough coverage to pay for the injuries. Once the at fault party’s policy limits have been reached, meaning their company has paid the maximum limit on their policy, this coverage provides additional limits for bodily injury.
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Uninsured/Underinsured Motorist Property Damage Coverage (UMPD)
It is the portion of your policy that may cover property damages caused to your vehicle in the case of an accident caused by an uninsured or underinsured driver.
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Underwrite
To scrutinize a risk and decide whether or not the risk meets company guidelines.
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Uninsured Motorist
An individual who personally decides not to have insurance protection.
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Uninsured Motorist Bodily Injury (UMBA)
It is the portion of your policy that may cover injuries caused to you and/or your vehicle occupants in the case of an accident caused by an uninsured driver. Georgia law now requires that you either carry this coverage or sign a rejection if you choose not to carry it.
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Uninsured Motorist Coverage
Pays for bodily injury damages to the policyholder up to preset limits when involved in a collision caused by another motorist that does not have liability insurance.
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Uninsured Motorist Property Damage (UMPA)
It is the portion of your policy that may cover property damages caused to your vehicle in the case of an accident caused by an uninsured driver. Georgia law now requires that you either carry this coverage or sign a rejection if you choose not to carry it.
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Uninsured Motorist Property Damage (UMPD)
Pays for property injury damages to the policyholder's insured vehicle up to preset limits when involved in a collision caused by another motorist that does not have liability insurance, or whose liability coverage is insufficient to pay for damages to the victim. Please refer to your policy for exclusions and limitations.
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Uninsured Motorist Stacked (UMS)
A version of uninsured motorist coverage which allows a policyholder to combine or "stack" their uninsured motorist limits when more than one vehicle is insured on the policy. Combining the limits allows the policyholder to have an overall higher uninsured motorist limit. Example: UM coverage at 25/50. If two vehicles exist on the policy and the limits are "stacked" the limit becomes 50/100.
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Uninsured Motorists Bodily Injury (UMBI)
The purpose of Uninsured Motorist Bodily Injury (UMBI) coverage is to provide payment to the insured and/or other covered individuals for injuries caused by an uninsured motorist or in some states, a hit-and-run driver, who is legally liable for the damages. If the insured is involved in an accident where the at-fault driver has no liability coverage, UMBI coverage will pay for the expenses incurred as a result of the accident such as medical bills, lost wages, and pain and suffering. Without the coverage, the insured will be liable to pay those expenses his- or herself. The first number listed in the coverage is the maximum amount that can be paid per injured person. The second number lists the maximum combined amount that can be paid out to all persons injured in a single accident.
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Unstacked Liability
When limits from one vehicle on a multi-car policy cannot be added to the liability limits of another vehicle on the same policy. This is the case in most states.
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V
Vehicle History Scoring (VHS)
A service being implemented in all active PPA states and programs other than California to apply an underwriting score to vehicles based on information returned from Trans Union and Carfax. Each score will be assigned a particular factor which will be used when quoting a new policy or adding a vehicle to an existing policy.
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Vehicle Identification Number (VIN)
It is a unique code including a serial number, used by the automotive industry to identify individual motor vehicles.
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Voided/Rescinded
A voided or rescinded policy means that a policy has been flat canceled back to its original inception date. Any premiums collected may be returned to the policyholder. This usually occurs when a discovery has been made through a claims investigation. The reasons behind the rescission can be varied, but usually relate to an unacceptable factor or material misrepresentation. These policies are not eligible for reinstatement under any circumstance. If the policyholder has questions regarding why the policy was rescinded he or she can go to their adjuster for more information.
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W
Waiver of Mandatory Arbitration (WMAR)
An auto policy may contain specific requirements regarding the resolution of disputes between the insured and the insurance company. In the event of a dispute, the policy contract can mandate that both parties enter into a process of binding arbitration to settle the dispute. The contract can further require that you waive your right to take action against the car insurance company in civil court. The Waiver of Mandatory Arbitration (WMAR) can alter the terms of your policy contract to allow you to take action against the car insurance company in civil court and to waive the requirement of mandatory arbitration in the event of a dispute.
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Written No Loss Statement
A No Loss Statement is a form that an auto insurance company may provide. By signing this form, you are stating that you have had no accidents, losses, or damage to any vehicle on the policy during the time the policy was canceled. Also, once you have agreed to the statement, the company is not liable to cover any claims or losses occurring during the time period listed on your No Loss Statement. This statement allows the company to reinstate your policy so that no lapse exists.
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Written Premium
The full premium for a policy is considered “written premium” as of the date the policy is issued. Coverage is provided throughout the policy period; therefore, the premium is earned by the company as the policy matures. The portion of written premium applicable to the expired or used part of the period for which the premium has been charged is the earned premium.
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Disclaimer:

This material is for general informational purposes only. Any products, services, and discounts referenced herein are not available in all states or from all companies. All statements are subject to the terms, exclusions, and conditions of the applicable policy. In all instances, current policy contract language prevails. Coverage is subject to individual policyholders meeting the insurer's underwriting qualifications and state availability. Other terms, conditions, and exclusions may apply.

The content is provided on an “as is,” and “as available” basis without representation or warranty of any kind whatsoever. The materials available are for informational purposes only and not for the purpose of providing legal advice. You should contact legal counsel to obtain advice with respect to any particular issue or problem. Use of this website or any of the links contained within the website does not create representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.