Please note that these definitions are for general informational purposes only, and not meant to be complete descriptions. Contact your Portland auto insurance agent or company for more detailed information on these terms, or refer to your policy.
Actual Cash Value
Current market value of a piece of property; it doesn’t include the cost of repairing property that may have sustained damage.
Adverse Carrier
Another way to refer to the other party’s insurance company that’s involved in a claim.
After-Market Parts
Vehicle parts that were not factory installed.
Aggregate Limit
The maximum amount your insurance company will pay on a claim, no matter how many people or vehicles are involved.
All-Terrain Vehicle (ATV) Insurance
Insurance that helps protect individuals who ride or own all-terrain vehicle from losses or liabilities stemming from accidents, thefts, vandalism, and natural causes. Some insurance companies consider this to be a form of motorcycle insurance. Many states require that ATV riders carry this insurance.
Anti-Theft Equipment
Usually refers to devices that decrease the potential your vehicle will be stolen or vandalized, or that facilitate the vehicle recovery process; examples include motion detectors, car alarms, and starter disablers.
Any Automobile Insurance
A broad form of commercial insurance protection covering automobiles that a company owns, rents, or borrows; it also provides coverage for non-owned vehicles used by the company.
Appraisal
An assessment of the damage done to a piece of property.
At-Fault
Refers to the individual who is found to be liable for the damages incurred in an accident.
Binder
A document issued by your insurance company stating that your coverage is in effect, even though the policy hasn’t officially been issued; it’s a temporary form of insurance until your policy is issued.
Boat Insurance
Insurance that helps protect individuals who drive or own boats from losses or liabilities stemming from accidents, thefts, vandalism, and natural causes; it’s meant for vessels with some sort of mechanical propulsion.
Bodily Injury Liability
Coverage that pays for injuries sustained by others due to your actions; it also pays for defense costs arising from legal action against you. Typically, the coverage is split into two figures. The first represents the maximum amount your provider will pay to one injured individual, while the second refers to the total amount your carrier will pay per accident, no matter how many people are hurt.
Bundling
Having more than one type of insurance policy with a carrier; doing so often allows you to receive a discount on your premiums, along with other benefits.
Carrier
Another way to refer to an insurance company or provider.
Certificate of Insurance
A document given to you by your insurance carrier that details your coverage, including the types and amount of your protection and the policy’s effective date.
Certificate Holder
The individual to whom the policy was issued.
Claimant
The person or company who files a claim.
Claim
A request made to your insurance company to pay for a loss following an accident, theft, or some other type of loss. Once you file a claim, your carrier will investigate to see if your claim is valid and determine if your policy covers the loss.
Claims Adjuster
Individual who assesses the validity of a claim, and is often involved with settling the claim.
Collision Coverage
Coverage that pays for damage to your vehicle, even if you’re responsible for causing it. Your provider will pay the repair costs up to the actual book or cash value of the vehicle before the accident.
Commercial Drivers
Usually refers to professional drivers who are required to obtain a commercial driver’s license (CDL) due to the type of vehicle they drive for work purposes.
Commercial Insurance Filing
A document indicating that your commercial insurance coverage meets government requirements. While the document is usually sent to your state’s motor vehicle department, it can sometimes be submitted to federal agencies. General vehicle liability insurance and cargo insurance are two common types of commercial insurance filings.
Commercial Vehicle Insurance
Insurance designed to cover the risks associated with commercial driving; commercial drivers may seek this insurance on their own or through their employer. While commercial insurance is meant for those who need a CDL, it’s also for drivers who don’t need a CDL but use their own or their company’s vehicle for business purposes, such as for making deliveries or transporting passengers.
Comparative Negligence
A type of law enacted in some states that allows you to receive a portion of an insurance settlement even if you were found partially liable for the loss.
Competitive Replacement Parts
Parts made by a company other than the vehicle’s manufacturer. These parts meet or exceed the quality of the original parts, but are less expensive.
Comprehensive Coverage
Coverage that pays for vehicle damage or another sort of financial loss stemming from reasons other than striking another vehicle, such as vandalism, hail, high winds, fire, water, or theft.
Compulsory Auto Insurance
Refers to the mandatory auto liability insurance required by a state; the minimum coverage standards vary by state.
Contributory Negligence
A type of law enacted in some states that doesn’t allow you to receive any portion of an insurance settlement if you were found to be even partly responsible for causing the loss.
Covered Person(s)
Another name for those individuals listed on an insurance policy.
Credit Score
A numerical ranking of your credit history that is based on a variety of factors. Insurance carriers sometimes check credit scores during the underwriting process. This is especially true with commercial policies; companies with credit problems may be tempted to save costs by cutting back on safety measures, which can lead to increased claims and more risk for the insurance company.
Deductible
The amount of money you’re responsible for paying after your carrier accepts your claim. Usually, the higher your deductible, the lower your premium will be, as you’re assuming more of the financial risk for your insurance company.
Defensive Driving
An approach to driving that emphasizes anticipating what may happen next, and being prepared to take the appropriate action to avoid danger. It involves vigilant monitoring of traffic and roadway conditions, and planning ahead.
Depreciation
The decline in a property’s value as time goes by from customary wear and tear.
Discount
Typically refers to a cost reduction in your premium that’s available if you follow certain safety guidelines set by your insurance company; the goal is to promote safety and reduce the likelihood your provider will have to pay for a loss. Discounts are commonly available if your vehicle has air bags, anti-lock brakes, or a safety alarm, or if you’ve recently completed a driver safety class.
Direct Loss
The initial, immediate amount of loss incurred by a piece of property due to damages that were incurred.
Earned Premium
The measure of insurance protection already provided by your insurance carrier. If you paid for a full year of coverage, after half a year your carrier will have six months of earned premiums, and have six months of unearned premiums left to provide to you in order to fulfill its obligation.
Endorsement
Sometimes referred to as a “rider,” this written attachment to a policy can limit or expand the terms of the policy. Both the insured and the insurance company must agree to the terms.
Financial Responsibility Laws
Laws that require drivers or owners of vehicles to meet their state’s minimum financial requirements for losses incurred by negligent actions that occur while driving or using their vehicle. Each state sets its own minimum standards; auto liability insurance is normally used to meet these requirements.
Fuel-Spill Liability Insurance
Form of boat insurance protection that helps pay for the costs associated with an accidental oil or fuel spill that causes bodily injury or property damage.
Full Glass Coverage
Coverage that waives your deductible in the event your vehicle needs to have any sort of glass repair.
Full-Timer Insurance
Similar to a homeowner’s policy, this form of recreational vehicle (RV) insurance helps cover expenses associated with injuries, property damage, and related matters for individuals who use their RV as their primary residence.
Gap Insurance
Coverage that pays for the difference between the amount remaining on your auto loan and the actual value of your vehicle.
Garagekeepers Legal Liability
Commercial coverage that helps financially protect parking lot or storage garage owners for losses that occur to vehicles left in their possession.
Grace Period
The timeframe after your premium is due that you may pay your premium without any lapse in coverage, or other sort of penalty. Most grace periods last for 31 days; incidents that occur during this time will be covered as long as you pay the premium due before the end of period.
Hazard
A situation or occurrence that increases the risk of an accident happening, such as icy road conditions, poor visibility, or an obstacle on the road.
Hazardous Materials Insurance
A specialized type of insurance for carriers that haul cargo containing properties deemed to be detrimental to humans or the environment.
Hired Auto Insurance
Commercial insurance coverage that pertains only to vehicles that are borrowed, leased, rented, or hired under the company’s name.
Insurance Institute for Highway Safety (IIHS)
A national, non-profit research group funded by auto insurance companies whose goal is to reduce the amount and severity of automobile accidents.
Insurance Score
Ratings used by insurance companies in some states to determine if an applicant is a worthwhile risk. These confidential scores focus on your financial management history, and look at matters such as your payment record, number of credit cards available, and if you’ve ever filed for bankruptcy.
Interstate Operating Authority
Refers to federal permission to carry regulated freight across state lines; for-hire vehicles that carry regulated freight interstate must have this authority, regardless of their weight.
Lapse of Coverage
The end of your insurance coverage due to failure to pay your premium by the end of the grace period. You can sometimes reinstate a lapsed policy by paying all the back premiums due; however, incidents that occur during the lapsed period won’t be covered by your policy.
Liability
Your legal responsibility to pay for a loss or damages caused by your actions.
Liability Insurance
Coverage that helps pays for injuries or property damage you cause to another party.
Medical Payments
Protection that pays for medical expenses caused by an accident, even if you’re at fault for the accident. It covers the cost of losses for both you and your passengers, up to your policy limit.
Motorcycle Insurance
Insurance that helps protect individuals who ride or own motorcycles for losses or liabilities stemming from accidents, thefts, vandalism, and natural causes.
Motor Truck Cargo Insurance
Financial protection that helps trucking companies pay for costs associated with damaged or loss freight; rates for this coverage vary by cargo type.
Motor Vehicle Report
A document that contains all your moving violations (such as speeding or failing to stop infractions), and other serious traffic violations.
National Insurance Crime Bureau (NICB)
A not-for-profit agency that works with insurance companies and law enforcement departments throughout the country to help locate and prosecute individuals involved with insurance crimes.
National Highway Traffic Safety Administration (NHTSA)
A federal agency dedicated to overseeing and promoting driving safety throughout the country.
National Association of Insurance Commissioners (NAIC)
An organization representing all the state insurance commissioners; its mission is to assist regulators in serving the insurance needs of the public, and to apply insurance principles in a responsive and effective manner.
No-Fault Insurance
A general term that can refer to the practice of an insurance company paying for the costs incurred in an incident no matter what party was legally responsible for the loss. But, it also can refer to state laws that allow motorists to sue a third-party only if the losses or damages meet a certain criteria or threshold. No-fault insurance is only practiced in some states.
Non-Owned Automobiles Insurance
Coverage that helps provide financial protection for losses that occur to vehicles that you or your business doesn’t own or lease; for example, vehicles owned by your employees that are used for official business purposes.
Non-Owner’s Insurance
Also referred to as non-driver’s insurance, this insurance provides liability, medical payments, and uninsured motorist coverage to those who don’t own a vehicle.
Non-Trucking Liability Insurance
An extended form of liability protection for companies that lease trucks; it pays for losses that occur during non-business use of trucks and that are beyond the limits of an ordinary liability policy.
Occupational Accident (Occ/Acc) Coverage
An alternative to workers’ compensation coverage for truckers; most motor carriers insist that their truckers either carry Occ/Acc or workers’ compensation coverage.
On-Water Towing and Labor
A form of boat insurance protection that covers towing and labor costs that occur while the vehicle is in the water.
Owned Automobiles Insurance
A broad form of liability coverage that provides financial protection for all automobiles you or your business own.
Pay-Per-Mile Coverage
A new type of auto coverage in which your premiums are based on the amount of miles you drive; the less you drive, the cheaper your premium. This coverage is currently available only in a few states.
Peril
A risk covered by your insurance policy that can cause damage, such as a fire, theft, hail storm, or an accident.
Per Occurrence Limit
The maximum amount your insurance company will pay for damages resulting from a single incident.
Per Person Limit
The maximum amount your insurance company will pay for injuries occurring to one individual stemming from a single accident.
Personal Injury Protection (PIP)
Coverage that goes beyond medical payment coverage and takes care of costs associated with rehabilitation, work loss, and funerals; the exact coverage varies depending on your insurance company. PIP provides financial protection for both you and your passengers.
Personal Transportation Vehicle
A motorized vehicle used to transport one individual; examples include a motorized scooter or a Segway.
Personal Watercraft Coverage (PWC)
Another name for watercraft insurance; PWC covers items such as water skis and other individual water transportation devices.
Physical Damage Insurance
A form of coverage that provides financial protection for vehicles; it typically pays for damages that are caused by fire, wind, hail, water, vandalism, theft, and collisions.
Points
A measure or number associated with a traffic infraction, as set by your state. If you accumulate enough points on your driving record, you may face a license suspension or revocation, have to take a remedial driving course, or pay a higher premium.
Policy
The written contract given to you by your insurance company which details your coverage.
Premium
The amount you must pay to obtain insurance coverage. Premiums may be paid monthly, quarterly, bi-annually, or annually, depending on the carrier.
Primary Liability Insurance
Usually refers to a required form of commercial insurance coverage for trucking companies; it helps covers expenses for accidents caused by their trucks that occur to other vehicles.
Principal Driver
The individual named on the insurance policy that will be driving the vehicle the most often.
Property Damage Liability
Coverage that pays for the cost of third-party property damage you caused to things such as fences, mail boxes, utility poles, and other vehicles.
Proof of Insurance
Usually refers to a small identification card issued by your insurance company that identifies you as a policy holder, along with your policy expiration date. You may be required to show the card when stopped for a traffic violation, renewing your driver’s license, or other reasons related to driving.
Quote
A fixed estimate given by an insurance company concerning the cost of providing coverage.
Recreational Vehicle (RV) Insurance
Insurance that helps protect individuals who drive or own recreational vehicles for losses or liabilities stemming from accidents, thefts, vandalism, and natural causes.
Rental Car Insurance
Coverage offered by a rental car agency; the protection varies, but can include loss damage waivers (LDW) and collision damage waivers (CDW) protection (which basically is the same as collision and comprehensive coverage), and liability insurance. This insurance may be unnecessary if your insurance provider or credit card company includes rental car coverage for you.
Rental Insurance
Also known as rental reimbursement coverage, this protection pays you for the cost of a rental vehicle while you car is being repaired due to damages caused in an accident covered by your policy; the amount and length of this coverage varies by the insurer.
Rental Reimbursement
Coverage that helps pay for rental car costs during the time your vehicle is being repaired or is unusable due to an accident; the exact coverage available varies by policy.
Required Coverage
The minimum amount of auto insurance or other financial coverage required to legally drive within your state.
Rider
Another name for an endorsement.
Safety Apparel Insurance
Protection usually associated with motorcycle, snowmobile, or ATV insurance that helps recover expenses connected with damaged helmets, gloves, jackets, boots, goggles, and related safety items.
Safety Equipment
Usually refers to newer, advanced types of equipment that promote driver and passenger safety, such as air bags and anti-lock brakes.
Salvage
Typically refers to damaged property that an insurance company takes ownership of after paying a claim. Often the insurer will try to recover some of its losses by reconditioning the property and selling it as salvaged property.
Seasonal Business Insurance
A type of commercial vehicle insurance that’s for companies that only operate during part of the year; examples include businesses involved with snow removal or landscaping.
Self-Insurance
Refers to an individual or a company taking on all or part of a financial risk instead of transferring it to an insurance company. Assuming the risk reduces the potential expenses for the carrier, which leads to lower premiums.
Segway™ Insurance
Insurance that helps protect individuals who ride or own Segways for losses or liabilities stemming from accidents, thefts, vandalism, and natural causes; these vehicles are defined as self-balancing, electric vehicles with two wheels that are used for personal transportation.
Specified Cause of Loss
A limited type of comprehensive coverage, as it only covers risks specifically mentioned in the policy. It usually covers losses stemming from natural causes, such as wind, hail, flood, earthquake, and fire, as well as those associated with theft or vandalism.
Snowmobile Insurance
Insurance that helps protect individuals who ride or own snowmobiles for losses or liabilities stemming from accidents, thefts, vandalism, and natural causes.
Stacking
Coverage that permits under-insured or uninsured motorists coverage to be increased by the number of vehicles on your policy in order to pay a claim.
Subrogation
Assigning your rights as the insured party to your insurance company so that your provider may collect from the negligent party’s insurance company. Under subrogation, your insurance company will pay the expenses due to you upfront in exchange for you granting legal permission to your insurer to attempt to recover the money owed by the other insurer. Subrogation can allow you to receive your money more quickly than waiting for the third-party insurance company to pay.
Surcharge
An additional fee imposed by your insurance carrier on top of your normal premium. Surcharges are sometimes added following an accident that you caused, or after you receive a moving violation.
Tow Truck Insurance
A type of commercial vehicle insurance for companies that generate income from the use of towing equipment; examples include roadside assistance, repossession, or auto repair businesses.
Traffic School
Typically refers to a classroom or online setting where drivers learn about safe driving practices. You may be forced to attend traffic school as a result of accumulating too many points on your license, or for other reasons. By attending traffic school, you may be able to have a ticket waived, have points removed from your license, or even receive a reduction of your insurance premium.
Trailer Interchange Insurance
A form of liability protection for truckers; it covers losses to non-owned trailers and related types of equipment that are in their possession.
Towing and Labor
Coverage that helps pay for towing and related costs when your vehicle is disabled due to an accident or a mechanical breakdown; coverage varies by policy in terms of what expenses will be absorbed.
Umbrella Policy
A policy that gives you extra liability protection extending beyond the limits of your auto insurance policy.
Under-Insured Motorist Coverage
Protection that pays for the difference between a negligent party’s insurance coverage and the cost of injuries sustained by you, up to your policy limit. This coverage also protects you for damages caused by hit-and-run drivers. Under-insured motorist property coverage takes care of the excess costs incurred by your vehicle or other type of property, again, up to your policy limit.
Underwriting
Refers to the process of determining whether an insurance applicant is an acceptable risk to an insurance provider.
Uninsured Motorist Coverage
Protection that covers you and your passengers for injuries sustained due to the actions of a negligent uninsured driver, or a hit-and-run driver, up to your policy limit. Uninsured motorist property coverage takes care of the excess costs incurred by your vehicles or other property, up to your policy limit.
United States Department of Transportation (USDOT)
A federal agency dedicated to ensuring safe, efficient, accessible, and convenient transportation throughout the country.
Vacation Liability Insurance
A type of RV insurance that helps pay for the costs associated with bodily injuries or property damage that occur while your RV is being used as a temporary vacation home.
Vehicle Identification Number (VIN)
The unique serial number given to your vehicle by its manufacturer; the VIN is normally located on the driver’s side dashboard or door frame.
Voided Contract
A policy that is no longer valid due to a violation of the terms of the policy; it often happens as a result of an insurance company finding out that the insured misrepresented the truth on the insurance application.
Watercraft Insurance
Insurance that helps protect individuals who ride or own watercraft for losses or liabilities stemming from accidents, thefts, vandalism, and natural causes. Although states define “watercraft” differently, it generally refers to kayaks, canoes, paddleboats, and other means of water transportation that aren’t mechanically propelled.
Wreckage Removal Coverage
Protection commonly associated with boat or watercraft insurance; it helps pay for expenses related to removing a boat or watercraft from the water after it’s been damaged or destroyed.
