vehicle insurance glossary

From "at fault" to "verbal threshold", coverage for golf carts, Vespas, and antique cars are chock full of industry terms and phrases that can be confusing. Find out what some of the commonly used jargon actually means with our easy-to-use vehicle insurance glossary.

A

Accident

An accident (also known as a car accident or wreck) is the term used to define a vehicle unintentionally colliding with another vehicle, person, or object.

See also: collision coverage, comprehensive coverage, liability, claim, car insurance, fender bender, Motor Vehicle Report

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Accidental death coverage

Accidental death coverage may be a part of your car insurance policy's personal injury protection (PIP) or first party benefits (FPB) coverage. If someone who's covered dies from accident-related injuries, this type of car insurance coverage may provide a payment to the insured's designated beneficiary.

See also: personal injury protection, first party benefits

Act of God

In terms of insurance coverage, an act of God is an unpreventable natural occurrence that causes damage to your insured property. Examples include natural disasters and heavy storms.

See also: comprehensive coverage, car insurance

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Actual cash value

Your car's actual cash value (also known as its ACV) is calculated by determining its original value minus the amount your car has depreciated since you bought it. If your car is totaled, most car insurance coverages reimburse you only for the actual cash value of your car.

See also: depreciation, total loss

Actuary

An actuary is an insurance professional who analyzes various types of data and statistics to determine insurance risks and premiums.

See also: insurance score, Motor Vehicle Report, insurance claim report, rate

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Additional interest insured

Additional interest insured refers to another person or organization listed on and protected under a policyholder's car insurance policy. If you lease a vehicle, you may need to list your leasing company as an additional interest insured to protect the company from future lawsuits due to accidents you may cause. Parents might also list their teenage drivers as additional interest insured parties on their policies.

See also: endorsement, insured

Adjuster

An adjuster (also known as a claims adjuster, field adjuster, or insurance adjuster) is an insurance professional who determines the monetary compensation an insurance company will pay a claimant. When someone files an insurance claim, an adjuster examines the damaged property and determines how much the insurance company should pay to repair the property and/or reimburse the claimant for his or her losses.

See also: accident, claim, fender bender

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Aftermarket parts

Aftermarket parts (also known as replacement parts, generic parts, or aftermarket auto parts) are vehicle components produced by independent companies rather than the original manufacturer or dealership. For example, NAPA car parts and accessories are considered aftermarket parts, while Honda car parts (installed on a Honda) are not.

See also: adjuster, claim, customized parts and equipment coverage

Agent

An agent (also known as an insurance agent) sells insurance coverage and helps manage customers' policies. Insurance agents are the authorized representatives of an insurance company or multiple companies.

See also: broker, quote

All-terrain vehicle insurance

All-terrain vehicle insurance (also known as ATV insurance, quad insurance, quad bike insurance, 3-wheeler insurance, or 4-wheeler insurance) is insurance for vehicles with 3, 4, 6, or 8 wheels that are made with off-roading in mind. All-terrain vehicle insurance can include collision, comprehensive, bodily injury, and uninsured rider coverages.

See also: recreational insurance

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Annual transit

Annual transit refers to insurance that covers all shipments a policyholder makes throughout the year. In general, goods are protected in transit as long as they are within the territory specified by the policy. Some policies may exclude certain waterways or types of perils from their contract.

See also: peril

Antique cars

Antique cars are defined by the Antique Automobile Club of America as any vehicle that's more than 45 years old. Many collectors, however, only view cars built by or before the end of World War I (1918) as antiques.

See also: collector cars, brass era, classic cars

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Antitheft recovery system

An antitheft recovery system consists of an electronic device installed in a concealed area of your car. If your car is stolen, you can activate the device and it'll emit a signal that can be used to locate your car. Such systems can be effective over a radius of several miles, depending on local geography.

By installing an antitheft recovery system, you may also be eligible for a car insurance discount.

See also: non-passive alarm, passive alarm

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At fault

An at-fault driver is a driver who's deemed legally responsible for damage caused in a car accident.

When an insured driver is declared at fault in an accident, his or her insurance company pays for all covered damages incurred by the other party (or parties) up to the policyholder's coverage limits. If limits have been exceeded, the at-fault driver is financially responsible for any excess amount.

In some cases, fault may be assigned on a percentage basis (such as 51 percent at fault).

See also: liability, collision coverage, driving record, no-fault insurance, no-fault states, Motor Vehicle Report

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Auto insurance

See car insurance.

Auto insurance companies

See car insurance companies.

Automated Clearing House payments

Automated Clearing House payments (also known as ACH payments, automatic payments, or electronic payments) are electronic withdrawals from a policyholder's bank account or credit card used to pay insurance premiums or other types of bills.

See also: credit union

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B

Benefit

A benefit is the amount paid by a car insurance company to you or your beneficiary when you file a car insurance claim.

See also: claim, indemnity

Binder

As a temporary authorization of insurance, a binder shows that coverage is in place (bound) for a specific amount of time, usually between 30 to 60 days. It will be replaced by a declarations page when the policy is issued.

When a policyholder requests a car or home loan, the loan company typically requires proof of insurance — which can be provided in the form of a signed binder.

See also: declarations page, proof of insurance, policy term, rate

Boat insurance

Boat insurance (also known as marine insurance) is insurance that you can buy for your boat, fishing boat, bass boat, sailboat, pontoon, houseboat, mini jet boat, or cabin cruiser. A boat insurance policy can cover roadside assistance, on-water towing and labor, total loss replacement, water skis, and personal effects replacement.

See also: personal watercraft insurance

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Bodily injury liability coverage

Bodily injury liability coverage protects you if you're held responsible for injuring someone in a car accident.

This coverage can help pay for the injured party's medical expenses and lost wages, and may also help pay your expenses in a related lawsuit. The amount covered is capped at the limits you select when you buy your car insurance policy.

See also: liability

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Body shop

A body shop (also known as a repair shop or auto body shop) is an establishment dedicated to repairing vehicles. Body shops often employ mechanics and other types of automotive experts to offer a range of vehicle repair services.

See also: RepairView®, adjuster, claim, aftermarket parts, customized parts and equipment coverage

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Brass era

Brass era refers to the period when all cars' metal fixtures were made of brass. Built in 1915 or earlier, brass era vehicles represent the oldest sub-class of antique cars.

See also: collector cars, antique cars, classic cars

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Broad form

Broad form (also known as broadest insurance or broadform insurance) is an insurance policy that covers you and/or your property against every possible peril allowed by the insurer.

See also: peril, car insurance

Broadform collision coverage

Broadform collision coverage is available in Michigan.

Broadform works like standard collision coverage, but also pays for collision damage to your insured car when you're not the at-fault driver. In other states, this damage may be covered under property damage liability insurance.

Although this car insurance coverage will pay up to your car's actual cash value regardless of fault in an accident, you'll be responsible for the deductible amount you select if you're found to be more than 50 percent responsible for the accident. If you're less than 50 percent responsible, you won't have to pay this deductible.

See also: collision coverage, actual cash value, no-fault insurance, no-fault states

Broker

A broker (also known as an insurance broker, independent insurance agent, or independent agent) is an independent insurance professional who helps clients obtain coverage that suits their needs by comparing offerings from multiple insurance companies. Rather than endorsing any particular company, a broker represents the consumer. A broker is knowledgeable in the practices and types of insurance offered by the companies he or she works with.

See also: agent, specialist, quote

Bundling

Bundling (also known as combining policies) is the act of obtaining multiple types of insurance from the same company. Examples include combining homeowners and car insurance, or life, health, and home insurance. Because of multiple-policy discounts, bundling can result in substantial savings for the policyholder.

See also: home insurance, car insurance, motorcycle insurance

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Business use

See commercial use.

C

Car insurance

Car insurance (also known as auto insurance, automobile insurance, vehicle insurance, or motor insurance) is a contract between a vehicle owner and an insurer. A car insurance policy provides financial protection from the costs associated with a car accident, including property damage and personal liability.

See also: comprehensive coverage, collision coverage, liability, direct auto insurance

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Car insurance calculator

A car insurance calculator attempts to predict what you would pay for a policy by quickly analyzing some general information about you as a driver. Some common things you may plug into a car insurance calculator to generate a quote are your age, gender, ZIP Code, vehicle type, and accident history.

See also: quote, limits

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Car insurance companies

Car insurance companies (also known as car insurance carriers, auto insurance companies, or auto insurance carriers) underwrite policies to owners of cars, trucks, and other vehicles. The main purpose of the policy is to provide financial protection from car accidents, property damage, and the resulting liability.

See also: Esurance, direct auto insurance, car insurance

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Casualty insurance

See property and casualty insurance.

Citation

A citation (also known as a ticket) is a legal summons generally issued as the result of a moving or non-moving driving violation.

Moving violations are driving-related infractions, such as speeding or failure to yield, whereas non-moving violations are legality-related issues, such as improper registration or parking violations.

See also: Motor Vehicle Report

Claim

A car insurance claim is a policyholder's request to be reimbursed for a loss that's covered by car insurance.

See also: adjuster, indemnity

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Classic cars

Though the term "classic car" can apply loosely to many collector models, classic cars are defined by the Classic Car Club of America as any vehicle made between 1925 and 1948.

See also: antique cars, brass era cars, collector cars

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Collector cars

A collector car is any collectible vehicle used primarily for pleasure driving, car shows, and club events. In order to maintain collector car insurance on a vehicle, the owner must generally adhere to an annual mileage limit as specified by the insurance company.

See also: antique cars, classic cars, collector car insurance

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Collector car insurance

Collector car insurance (also known as antique car insurance or vintage car insurance) is a form of car insurance designed for cars that aren't your primary vehicle and are typically used for Sunday drives, car shows, or other similar events. Collector cars can be vintage, exotic, limited-edition, or military vehicles.

See also: classic cars, collector cars, antique cars

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Collision coverage

Collision coverage can help pay for repairs or replacement costs to your own vehicle if your car hits another vehicle/object or if your car rolls over.

The maximum amount paid for repair or replacement is the car's actual cash value minus the deductible you choose when you buy your policy.

See also: comprehensive coverage, actual cash value, deductible

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Collision deductible waiver

This coverage option pays the deductible for your collision coverage if you're involved in an accident in which an uninsured motorist is held legally responsible.

This particular car insurance coverage option isn't available in all states. If it is available, you must add this to your auto insurance policy if you choose to buy collision coverage.

See also: deductible

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Commercial use

Commercial use classification (also known as business use) means that you mainly use your car for business purposes (such as sales, service, and delivery calls) or work-related errands (like trips to the bank or post office), and other work-related driving. Commuting to and from work is not considered commercial use.

See also: primary use, commercial vehicle

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Commercial vehicle

A commercial vehicle (also known as a work vehicle) is any automobile used for business purposes other than commuting.

See also: primary use, commercial use

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Comprehensive coverage

Comprehensive coverage (also known as other-than-collision coverage) can kick in when your car is damaged by fire, certain natural disasters, falling objects, or vandalism. Theft and accidents with animals are also covered under this coverage. Comprehensive coverage is legally optional but may be required by a loan or leasing agent if you finance your car.

The maximum amount paid for repair/replacement is the car's actual cash value (minus your deductible, of course).

See also: collision coverage

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Continuously insured

The length of time you've been continuously insured is the number of years you've been covered by one or more insurance companies without a lapse in your car insurance coverage.

See also: lapsed coverage

Credit score

A credit score is a numerical value that represents how likely it is an individual will repay a loan or other debt on time.

The higher your credit score, the better chance you have of being approved for loans, credit cards, vehicle financing, etc. Factors such as bill payment history, credit history, debt-to-credit ratio, and many other financial details can positively or negatively affect your credit score.

See also: insurance score, National Credit File

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Credit union

A credit union is a nonprofit cooperative banking institution owned by its members. Generally, credit unions promote community growth by requiring applicants to reside in specified towns, cities, or counties to qualify for membership. Many credit unions grant membership to employees of certain companies.

Typically, credit unions offer lines of credit and loans at lower rates than traditional, for-profit banks.

See also: Automated Clearing House payments

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Customized parts and equipment coverage

Customized parts and equipment coverage (also known as CPE coverage) insures nonstandard parts that have been installed or altered after a vehicle's original production. Examples of common aftermarket customizations include car stereo systems, modified exhausts, new wheels, and added security features.

See also: collector car insurance, aftermarket parts

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D

Declarations page

The declarations page (also known as a dec page) of your car insurance policy summarizes the information essential to your car insurance coverage: your name and address, descriptions of the insured vehicle(s), and the car insurance premium, as well as the policy's coverages, limits, and deductibles.

See also: binder, proof of insurance

Deductible

A deductible is the amount you agree to pay out of pocket before a certain coverage kicks in after you file a car insurance claim. Generally, higher deductibles translate to lower premiums because you're assuming more of the financial risk in the event of an accident.

See also: out-of-pocket expenses

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Defensive driver and driver improvement courses

Defensive driver and driver improvement courses train drivers of all ages. Certain mature driver safety courses are typically aimed at drivers 55 and older.

In certain states, you may qualify for a car insurance discount if you're in the eligible age range and you've taken one of these safety courses.

See also: mature driver

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Department of motor vehicles

The department of motor vehicles (also known as the division of motor vehicles, bureau of motor vehicles, department of transportation, or DMV) is a state agency responsible for vehicle registrations, driver licensing, and driver license renewals.

These agencies adhere to unique state-specific regulations and often go by different names. DMV is the most commonly known and accepted term when referring to the department of motor vehicles in a general sense.

See also: Motor Vehicle Report, insurance claim report, SR-22, registration

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Depreciation

Depreciation is the decline in an object's value due to age, wear and tear, or obsolescence.

See also: actual cash value

Direct auto insurance

Direct auto insurance (sometimes known as online insurance) lets consumers buy car insurance coverage directly through a company's website or over the phone rather than through an independent agent or broker.

See also: agent, broker, Esurance, car insurance

Dirt bike insurance

Dirt bike insurance (also known as Enduro insurance, mountain bike insurance, or trail bike insurance) covers lightweight, motorized bikes designed for off-road use. Types of dirt bike insurance coverages include liability, collision, and comprehensive. Policyholders often purchase dirt bike insurance to protect themselves from theft.

See also: recreational insurance, scooter insurance, all-terrain vehicle insurance

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DL-123

A DL-123 is a form required in North Carolina that verifies your car insurance coverage. To obtain or renew a North Carolina drivers license, you'll need to submit this form to the North Carolina Division of Motor Vehicles. Your insurer can provide and sign this form as long as you have an active North Carolina car insurance policy.

See also: SR-22, FS-1

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Driver

A driver (also known as an operator) is an individual who controls or operates a motor vehicle. This term can refer to the operator of a car, truck, or motorcycle.

See also: passenger

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Drivers permit

See learners permit.

Driving record

See Motor Vehicle Report.

Driver status

Driver status indicates how frequently the driver listed on the policy actually drives a covered vehicle. If you're the primary policyholder, you would be listed as the "primary driver." You might list your spouse and kids as "occasional drivers."

See also: insured, primary driver, primary policyholder

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E

Effective date

The effective date is the date your auto insurance coverage begins. You are not covered by a car insurance policy until the effective date, which you can select when you buy your policy.

See also: declarations page, policy term, renewal letter, binder

Emergency road service

Emergency road service (also known as towing and labor, emergency repair service, motor club, or roadside assistance) provides on-the-spot assistance for various types of roadside emergencies. Typical emergency road services include flat tire repair/replacement, lock-out services, and gas delivery.

Most insurance companies offer some form of emergency road service.

See also: car insurance, tow coverage

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Endorsement

An endorsement (formerly known as a rider) refers to any change made to your original insurance contract. Endorsements include changing your deductibles or limits or adding other people or cars to your policy.

See also: car insurance, exclusions, limits, deductible

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E-star®

The E-star® Direct Repair Program is an Esurance program that qualified car repair shops meeting our strict criteria can join. This network of Esurance-approved shops features RepairView® online repair monitoring and guarantees repairs for as long as you own the car. RepairView enables you to see and share photos of your car as it goes through the repair process.

After you file a claim with Esurance, your dedicated claims rep can help you select an E-star facility near you or you can use our online E-star locator.

Esurance created E-star to help expedite the auto repair process and provide excellent service at state-of-the-art facilities. There are more than 1,000 E-star shops nationwide.

See also: RepairView®, body shop, claim

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Esurance

That's us. Esurance is a San Francisco-based insurance company that offers direct-to-consumer personal car and homeowners insurance. Our innovative approach to insurance allows customers to take advantage of affordable rates, great discounts, and a wealth of handy online tools.

See also: car insurance, homeowners insurance, direct auto insurance

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Excess

Excess (also known as excess coverage or excess insurance) refers to insurance that backs up the primary policy with extra protection. Typically, if you have 2 overlapping policies covering the same thing, the excess doesn't kick in until the loss amount passes a certain threshold or the primary coverage limit is exceeded.

See also: broad form, primary coverage

Excluded driver

An excluded driver (also known as a named driver exclusion) is an individual who's specifically listed as someone not covered on a car insurance policy. For instance, if you and your spouse (who has a less-than-stellar driving record) have separate car insurance policies, you might name him or her as an excluded driver. This means that he or she will not be covered under your policy if he or she gets behind the wheel of your car.

See also: insured, Motor Vehicle Report

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Exclusions

Exclusions are situations that are not covered by a given insurance policy. Any specific exclusion will be stated in your auto insurance policy.

See also: endorsement, declarations page, binder

Extraordinary medical coverage

Extraordinary medical coverage protects you in the event you suffer accident-related injuries that require serious and/or long-term medical care. Extraordinary medical coverage begins once you have exhausted the limit on your standard medical benefits coverage.

This coverage may be a part of your personal injury protection (in no-fault states) or first party benefits plan (in Pennsylvania).

See also: personal injury protection, first party benefits

F

Family member

For car insurance purposes, a family member is someone who lives in the same home as the policyholder and is related by blood, marriage, or other recognized ties (like adoption, foster care, or wardship). Students living away from home may still be considered family members for insurance purposes.

See also: insured

Fender bender

Fender bender (also known as rear-end accident) refers to a minor, low-impact car accident in which the front or rear of a vehicle suffers damage. Fender benders often occur when drivers brake suddenly and the vehicles following behind are unable to stop in time. Generally, fender benders cause negligible damage.

See also: body shop, adjuster, claim, E-Star

Financial responsibility

Financial responsibility, in the context of car insurance, means you have the financial backing needed to pay for damages you cause during an accident. Buying car insurance with the necessary liability coverage is the most common way you can demonstrate your financial responsibility to your state.

See also: SR-22, FR-19, car insurance

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First party benefits

First party benefits, or FPB, is a kind of optional car insurance coverage in Pennsylvania.

Depending on the specific FPB coverages you select, if you're injured in an accident, FPB can help cover medical expenses, lost income, accidental death, and funeral costs for you and relatives residing in your household.

The coverage is capped at limits you select when you buy your Pennsylvania auto insurance policy.

See also: extraordinary medical benefits, personal injury protection

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Four-wheeler insurance

See all-terrain vehicle insurance.

FR-19

An FR-19 is a form that Maryland or Delaware drivers may need to sign when registering a car or truck. Upon signing this form, you acknowledge that you'll carry the state's required minimum liability coverage on a registered vehicle. The form can be issued (for free) by your insurer.

See also: SR-22, FS-1, DL-123, financial responsibility

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FS-1

An FS-1 is a proof of insurance form exclusively used in North Carolina. If the North Carolina Division of Motor Vehicles received notification that your liability coverage has lapsed, they'll request an agent-signed FS-1 that confirms coverage on the date of the supposed lapse. If you can't provide one, you'll likely need to pay a fine and obtain insurance immediately to avoid revocation of your vehicle's tags.

See also: DL-123, SR-22, FR-19, financial responsibility

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Full coverage car insurance

Full coverage car insurance usually implies that the policy has more than just liability coverage. Though there's really no such thing as "full coverage" when it comes to car insurance, people often use this term to describe how much auto insurance coverage they have.

See also: comprehensive coverage, collision coverage

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Funeral benefits coverage

Funeral benefits coverage may be a part of your car insurance policy's personal injury protection or first party benefits plan. If a covered individual dies from accident-related injuries, this coverage pays for a portion of funeral expenses, regardless of who was at fault in the accident.

Covered costs are subject to the limit you choose when you buy your car insurance policy.

See also: personal injury protection, first party benefits

G

Gap insurance

Gap insurance (also known as loan/lease gap coverage) is a type of insurance coverage that financing car buyers may purchase from their insurance company, the dealership, or the loan provider.

If the vehicle has been financed or leased, gap insurance covers the difference (if any) between what is owed on the car and the car's actual cash value in case there is a total loss. This protects policyholders from having to make payments on totaled vehicles they can no longer drive.

See also: total loss, actual cash value

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Garaging location

The garaging location is where an insured car is parked most of the time. The ZIP Code of your primary residence usually indicates your specific garaging location. Your garaging location may affect your car insurance rates, so notify your insurance company if you normally keep your car somewhere other than your home address.

Golf cart insurance

Golf cart insurance, a type of specialty motorcycle insurance, is a form of property and casualty insurance that covers golf carts. Golf carts generally hold up to 2 people and are designed to transport golfers and their equipment from hole to hole on golf courses. Types of golf cart insurance coverages include liability, collision, and comprehensive. Coverage may also be available for a trailer used to transport a golf cart.

See also: motorcycle insurance, all-terrain vehicle insurance, travel trailer insurance

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H

Hurricane recoupment fund

The hurricane recoupment fund (also known as the Florida Hurricane Catastrophe Fund, the FHCF, or the hurricane CAT fund) is a fund created to ensure that individuals affected by catastrophic events, such as hurricanes and other major disasters, receive the financial assistance they need. Insurance providers participating in this program pay a specified annual amount to the state, part of which they recoup through property and casualty insurance premiums.

See also: property and casualty insurance

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Hybrid electric vehicles

Hybrid electric vehicles (also known as HEVs) are powered by a combination of batteries and fuel. By using less gas, HEVs emit fewer pollutants and receive better gas mileage than standard vehicles.

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I

Income loss coverage

Income loss coverage is sometimes a part of your auto insurance policy's personal injury protection coverage (in certain states) or first party benefits coverage (in Pennsylvania).

Income loss coverage offers financial protection if you're unable to work due to accident-related injuries. It helps you recover portions of your lost salary and other expenses you may incur as you try to return to work.

See also: personal injury protection, first party benefits

Indemnity

An indemnity is the sum that your insurer will pay to you or others after an accident that results in damage to property or people. The idea is that it'll restore you — or rather your finances — to their pre-loss condition.

See also: claim

Independent insurance agent

See broker.

Inspection

An inspection (also known as a vehicle inspection, safety inspection, or annual inspection) is a practice governed by state and national regulations in which trained professionals determine a vehicle's insurability and road-use legality.

The 2 main factors checked during inspections are vehicle safety and emissions. State laws dictate the required frequency of vehicle inspection, but the most common reasons for the procedure include insurance applications, car accidents, and vehicle registrations.

See also: registration

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Insurance adjuster

See adjuster.

Insurance card

An insurance card (also known as an ID card) contains a car insurance policy's pertinent information — including name(s) and address(es) of policyholder(s); policy number; year, make, model, and VIN of each insured vehicle; the effective date of the policy; and the name and contact information of the insurance company.

In most states, you'll typically need to show a police officer your insurance card, along with your license and registration, if you're stopped. Many states allow motorists to display their ID cards on their phones, tablets, or other electronic devices as sufficient proof of car insurance.

See also: car insurance, vehicle identification number, effective date, proof of insurance

Insurance claim report

Insurance claim reports provide details about car insurance claims you or other insured drivers on your policy have filed with insurance companies. These reports are provided by independent consumer reporting agencies that collect car insurance claim information from a variety of insurance companies. One of the most common agencies issuing such reports is C.L.U.E., the Comprehensive Loss Underwriting Exchange.

See also: claim

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Insurance fraud

Insurance fraud (also known as an insurance scam) is any act that knowingly defrauds an insurance company to obtain payment. Fraud can take on many forms, ranging from overinflated towing bills to windshield repair fraud, and from staged accidents to exaggerated claims of stolen property or damages.

Insurance fraud is a leading cause of today's rising insurance costs, and all states enforce strict laws against this form of crime. Convicted offenders can face major penalties, hefty fines, and imprisonment.

See also: claim, car insurance, home insurance, insurance claim report

Insurance score

Insurance scores are based on analytical models that objectively measure the relative likelihood of future insurance losses based on aspects of your credit history. These scores and analyses of their significance are provided by independent consumer reporting agencies.

See also: credit score

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Insured

The insured is an individual covered by a car insurance policy.

J

Jet Ski® insurance

Jet Ski insurance (also known as personal watercraft insurance) is designed to protect your personal watercraft both in and out of the water.

Though jet ski is commonly used to refer to personal watercrafts like Yamaha's WaveRunner™, the term literally refers to Kawasaki's trademarked product, which debuted in 1973. Powered by a jet drive, Jet Skis can travel on the surface of water and usually accommodate one to 3 people.

See also: personal watercraft insurance, boat insurance

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Judgment

A judgment is a final decision rendered by a court of law.

K

Kit car

A kit car (also known as a replica car) is a vehicle assembled from a set of parts. The engine and other components will often be taken from other cars to complete the kit.

See also: collector cars, antique cars, classic cars

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L

Lapsed coverage

Lapsed coverage occurs when an individual is without an active car insurance policy. A lapse in your coverage could indicate a higher level of risk for insurers and can often result in higher premiums in the future.

Driving without at least the basic liability coverage is illegal in many states and can saddle you with steep fines and penalties.

See also: continuously insured, SR-22

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Learners permit

A learners permit (also known as a drivers permit, learners license, or provisional license) is a document issued by the DMV allowing a new driver to begin driving. Generally, state laws require that the holder of a learners permit be accompanied by a licensed adult driver when operating a motor vehicle.

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Lender

A lender is any individual or organization that provides monetary loans. When someone obtains a loan, he or she must pay the lender back in full, with interest, within an agreed-upon period.

See also: lessee

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Lessee

A lessee is anyone who is leasing a property — typically a house or vehicle. A lease is a contract that grants the lessee exclusive use of a property for a specified period provided he or she makes the agreed-upon payments.

See also: lender

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Letter of experience

A letter of experience is documentation provided by an insurer verifying the length of time a policyholder had or has had insurance with the company. It can also show the length of time a customer was insured before switching companies or canceling a policy.

Because most insurance companies offer discounts that depend on how long applicants have kept continuous coverage without interruption, letters of experience are generally required to obtain a better insurance rate.

See also: car insurance, proof of insurance, policy term

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LexisNexis®

LexisNexis is a leading provider of consumer reports. Esurance uses LexisNexis to obtain applicants' credit-based insurance scores in many states. Insurance companies use these scores, along with various other factors, to determine car insurance rates.

See also: driving record, Motor Vehicle Report, car insurance

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Liability

Liability is a term that broadly means legal responsibility. If you run a stop sign and hit another car, you may be found liable for the damages to the other driver's car.

See also: liability coverage

Liability coverage

Liability coverage protects you from having to deplete your personal assets to pay for damages if you're held responsible for injuries or damages arising from a car accident.

The 2 main types of liability coverages in a car insurance policy are bodily injury and property damage. These coverages are required in most states.

See also: liability

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License points

See Motor Vehicle Report.

Life event

The term "life event" refers to an occurrence in life that significantly changes a person's status or living situation. Common examples of life events include marriage, divorce, serious medical diagnosis, disabling injury, pregnancy/childbirth, buying a house, and death of a spouse or close relative.

Limited lifetime warranty

A limited lifetime warranty (also known as a lifetime warranty, limited warranty, or vehicle warranty) is a contract between a car buyer and seller that entitles the buyer to receive compensation if the purchased vehicle fails to meet specified criteria.

For example, if the car's engine breaks down during proper usage, the buyer may be reimbursed in accordance with the limited lifetime warranty's conditions.

Limits

A limit is the maximum amount an insurance company will pay, per coverage, for a covered loss. Though you can choose your limits for certain coverages, some states require you to buy certain minimum levels of car insurance coverage.

See: car insurance

Loan/lease gap coverage

See gap insurance.

Lowrider

A lowrider is a vehicle that has been customized in a way that lowers its body closer to the ground. This is generally accomplished through the use of hydraulic jacks.

See also: collector cars

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M

Marine insurance

See boat insurance.

Mature driver

A mature driver (also known as a senior driver) is considered mature upon reaching a certain age, as determined by his or her state of residence. The minimum age for mature drivers in many states is 55 years old.

Many insurance companies offer discounts to mature drivers who complete state-certified defensive driving courses.

See also: defensive driver and driver improvement courses

Medical benefits coverage

Medical benefits coverage may be a part of your car insurance policy's personal injury protection (in certain states) or first party benefits plan (in Pennsylvania).

Medical expenses that are the direct result of accident-related injuries are covered. Covered medical expenses are capped at the limits you choose when you buy your car insurance policy.

See also: personal injury protection, first party benefits

Medical payments coverage

Medical payments coverage (also known as medpay or med pay) is an optional coverage that can help pay medical bills and/or funeral expenses if you and/or accompanying passengers are injured or killed while in an insured vehicle, regardless of fault in an accident.

Medical payments coverage may also cover you and your family members when riding in others' vehicles, or a pedestrian on the street.

The amount paid by medical payments coverage is capped at the limit you choose when you buy your auto insurance policy.

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Modern classic car

Though not officially recognized as classics by the Antique Automobile Club of America, modern classic cars are generally collectable vehicles between 15 and 25 years old.

See also: collector cars

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Monetary threshold

In no-fault states, a monetary threshold precludes policyholders from suing for bodily injuries sustained in a car accident unless the expenses exceed a certain agreed-upon figure as defined by the state.

Once the threshold is crossed, an accident victim can sue an at-fault driver for medical-related post-accident expenses.

See also: verbal threshold, no-fault insurance, no-fault states

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Moped insurance

See scooter insurance.

Motor insurance

See car insurance.

Motorcycle insurance

Motorcycle insurance is insurance you can buy to protect your motorcycle and yourself in the event of an accident. Motorcycle insurance offered through Esurance covers street bikes, cruisers, touring bikes, standard motorcycles, scooters, touring motorcycles, dirt bikes, trikes, classics, and other 2-wheeled rides.

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Motor Vehicle Report

A Motor Vehicle Report (also known as an MVR, driving record, or license points) is an individual's documented history regarding motor vehicle operation.

The DMV receives a record of any moving violations, at-fault car accidents, not-at-fault car accidents, and tickets. This information is added to the driver's record. Depending on the severity of an infraction, a driver may receive points on his or her driving record, which can result in higher car insurance premiums, insurance coverage restrictions, or even a suspended or revoked drivers license.

See also: department of motor vehicles

Moving violation

A moving violation is any unlawful driving-related act committed while a vehicle is in motion. Common examples of moving violations include speeding, improper signaling, following too closely, and running a stop sign or red light.

See also: Motor Vehicle Report, claim

N

Named insured

See primary policyholder.

National Credit File

The National Credit File provides objective consumer information regarding the financial history of an individual. Information contained in this report is often used to calculate insurance scores.

See also: credit score

No-fault insurance

No-fault insurance often includes or requires personal injury protection coverage, which can help pay for a policyholder's medical-related expenses after a car accident, regardless of fault. In a typical no-fault claim, each insured party files a claim with their own insurer without waiting for the assignation of fault.

No-fault insurance aims to help injured drivers and passengers get medical care as swiftly as possible and does not apply to property damage.

Each no-fault state has a monetary or verbal threshold that specifies a certain level of damage that, when surpassed, can allow an injured party to sue an at-fault driver.

See also: personal injury protection, monetary threshold, verbal threshold, no-fault states

No-fault states

In no-fault states, insurance companies are legally required to pay their policyholders' covered medical-related losses after an accident, regardless of fault.

Some no-fault states also restrict the right to sue for damages.

There are currently 12 no-fault states (although no-fault can be declined in some): Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah.

See also: personal injury protection, no-fault insurance

Non-passive alarm

A non-passive alarm is a type of car alarm that has to be manually activated each time you leave your car. If someone attempts to open your car, the alarm sounds, and the system disables the automobile's starter, ignition system, and/or fuel circuit.

You may qualify for a car insurance discount if your car is equipped with such an alarm.

See also: antitheft recovery system, passive alarm

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Non-stackable insurance

Non-stackable insurance doesn't allow a policyholder to combine the amounts of uninsured and/or underinsured motorist coverage for each covered vehicle. For example, if you have a stackable insurance policy that insures 3 cars, each of which is insured with $10,000 of uninsured motorist bodily injury coverage, you could receive up to $30,000 for covered injuries in a single incident with an uninsured driver.

Conversely, a non-stackable insurance policy with $10,000 of uninsured motorist bodily injury coverage will pay up to $10,000 for applicable injuries or expenses per incident, regardless of how many cars are covered.

States allowing insurance stacking may still permit companies to include language in their policy contracts that deems limits non-stackable.

See also: stacking, uninsured motorist bodily injury coverage, underinsured motorist bodily injury coverage, uninsured motorist property damage coverage, underinsured motorist property damage coverage

O

Online insurance

See direct auto insurance.

Original equipment manufacturer

Original equipment manufacturer (also known as OEM) refers to replacement vehicle parts made by the same manufacturer that produced the car's original part. For instance, if your brake pads need to be replaced, and you want to use OEM parts, then your repair shop will need to find brake pads made by the same manufacturer that produced your car's original pads.

See also: aftermarket parts

Out-of-pocket expenses

Out-of-pocket expenses are what you pay in addition to what your car insurer pays when you file a claim.

These are typically the result of the deductibles and coverage limits you choose. For example, if you carry a property damage liability limit of $25,000 and you get into an at-fault accident that causes $30,000 worth of damage to someone else's property, you may incur out-of-pocket expenses of $5,000, in addition to the deductible.

See also: deductible, liability coverage

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P

Passenger

A passenger (also known as a rider or guest) is any person in the vehicle other than the driver. This includes individuals traveling via car, truck, motorcycle, or any other type of motor vehicle.

See also: driver

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Passive alarm

A passive alarm is a type of car alarm that is automatically activated and emits warning sounds when someone tries to get into your car. Once the passive alarm has been triggered, the system disables the automobile's starter, ignition system, and/or fuel circuit.

You may receive a car insurance discount if your car is fitted with such an alarm.

See also: antitheft recovery system, non-passive alarm

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Peril

A peril is anything that can cause damage or loss to your property. This can be a wide range of things, from wind to theft to smoke.

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Permissive use

Permissive use means you grant someone permission to drive your vehicle. Generally, if someone gets into an accident while driving your car with your permission, your insurance provides the same coverage as when you're behind the wheel. In some states, however, permissive drivers have reduced coverage.

See also: excluded driver

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Personal injury protection

Personal injury protection (also know as PIP) is a kind of car insurance coverage in certain states that can help cover medical-related expenses after a car accident, regardless of fault. In some states, PIP can also pay for lost wages and other similar losses.

PIP is often mandatory in no-fault states, although it can be declined in some. Select states that follow the traditional (fault) insurance system still require PIP unless it's declined in writing. Specific protections afforded by this type of car insurance coverage and limits on personal injury protection payments vary widely from state to state.

See also: no-fault insurance, no-fault states

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Personal liability

Personal liability (also known as personal obligation or personal responsibility) refers to a situation in which an individual is legally responsible for damages caused to another party or someone's property.

When someone is deemed personally liable, he or she is financially obligated to compensate the other party for damages in accordance with national and state liability laws.

Policyholders may carry personal liability coverage on their home insurance, car insurance, and virtually any other type of property and casualty insurance policy they own. Individuals may also purchase personal umbrella insurance in order to insure against liability situations not covered by their other insurance policies.

See also: liability coverage, medical payments coverage, no-fault insurance

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Personal watercraft insurance

Personal watercraft insurance (also known as PWC insurance or personal water craft insurance) protects your Jet Ski®, Sea-Doo®, or WaveRunner® in and out of the water. Like boat insurance, personal watercraft insurance can cover roadside assistance, on-water towing and labor, total loss replacement, water skis, and personal effects replacement.

See also: Jet Ski insurance, SEA-DOO insurance, WaveRunner insurance

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Physical damage coverage

Physical damage coverage (also known as property damage coverage) is a form of car insurance that covers the policyholder's vehicle. If a policyholder is found at fault in an accident, the insured will file an insurance claim under the car insurance policy's physical damage coverage.

See also: adjuster, collision coverage, comprehensive coverage

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Pleasure use

Pleasure use, in the context of car insurance, means that you typically drive your car for fun, with no regular commuting or commercial use.

See also: primary use, commercial use

Policy

Your policy is the contract that states what your car insurance coverage includes (coverages, limits, and deductibles), as well as your official annual premium.

It's a document or group of documents that typically includes a declarations page, a list of exclusions, and other terms and conditions of your coverage.

See also: car insurance, declarations page, binder, rate, policy term

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Policy expiration date

The policy expiration date is the date your insurance coverage ends if your policy isn't renewed.

The expiration date can be found on the declarations page of your car insurance policy, on your insurance card, or on a recent car insurance renewal notice.

See also: declarations page, binder, proof of insurance

Policy term

A policy term is the length of time an auto insurance policy is valid. Auto insurance policies from Esurance have a policy term of 6 months or 12 months, depending on your state of residence.

See also: declarations page, binder, proof of insurance

Premium

See rate.

Primary coverage

Primary coverage (also known as primary insurance) is the first coverage to help pay damages or expenses after a claim is filed whether or not there's other coverage in place. For example, if you're found at fault in a car accident and you have a car insurance policy as well as an umbrella policy, your car insurance policy will act as your primary coverage.

See also: secondary coverage, liability coverage, umbrella insurance

Primary driver

The primary driver is the person named on a car insurance policy who drives a specific car most frequently.

Primary policyholder

The primary policyholder is the person who is billed for the auto insurance policy and who serves as the main point of contact with the insurance company.

See also: insured

Primary residence

Your primary residence is the home address and ZIP Code you list on your policy as your place of residence for the duration of your policy term. Your primary residence is usually the same as your garaging location, unless you keep your car elsewhere.

See also: car insurance, garaging location

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Primary use

A vehicle's primary use is how the car is typically used. Auto insurance companies usually classify primary use as commuting, commercial, or pleasure use.

See also: commercial use, pleasure use

Proof of insurance

Proof of insurance (also known as POI) is any legal, signed document provided by your insurance company that shows the effective date of your active insurance policy.

See also: declarations page, insurance card, binder, renewal letter

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Property and casualty insurance

Property and casualty insurance (also known as P&C insurance) financially protects homes, condos, businesses, cars, and other assets against damages and loss. Property insurance generally protects the property itself while casualty insurance (often known as liability insurance) covers policyholders against legal liabilities caused by injury or property damage to others.

Generally speaking, property and casualty insurance differ from life and health insurance policies because they protect against liabilities not covered by other insurance policies.

See also: casualty insurance

Property damage liability coverage

Property damage liability coverage protects you if you are held responsible for damaging someone else's property in a car accident.

Property damage liability coverage helps reimburse another person for their damaged property (such as a car, a fence, or a home) and helps pay your expenses in the event of a related lawsuit.

The amount covered by property damage liability is capped at the limit you choose when you buy your auto insurance policy.

See also: physical damage coverage

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Provisional license

See learners permit.

PWC insurance

See personal watercraft insurance.

Q

Quad insurance

See all-terrain vehicle insurance.

Quote

A quote is an insurance premium estimate provided by an insurance agent, licensed insurance sales representative, or online engine. To receive the most accurate quote, provide honest, accurate information regarding your car, driving record, years of driving experience, claims history, insurance history, and annual mileage.

See also: insurance claim report, Motor Vehicle Report, agent, broker, direct auto insurance, Esurance

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R

Rate

A rate (also known as an insurance premium or premium) is the amount you pay for your insurance policy. Your rate can depend on many factors, including your driving record, the make and model of your car, your ZIP Code, your age and gender, your claims history, and, in certain states, your credit-based insurance score.

See also: Motor Vehicle Report, insurance score, insurance claim report

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  • Auto insurance rates explained
  • Recreational insurance

    Recreational insurance (also known as specialty insurance) is designed to protect recreational vehicles, including ATVs, boats, snowmobiles, and personal watercraft in the event of an accident.

    See also: all-terrain vehicle insurance, boat insurance, snowmobile insurance, personal watercraft insurance

    Related links

    Recreational vehicle insurance

    Recreational vehicle insurance (also known as RV insurance) is designed for Class A, B, and C motorhomes, coaches, camper vans, trailers, pop-ups, and toy haulers. A policy can include coverage for the people and valuables inside the vehicle, and can feature vacation liability coverage, full timer's coverage, emergency expense coverage, and more.

    See also: boat insurance, all-terrain vehicle insurance

    Related links

    Registration

    Registration (also known as vehicle registration) is a mandatory practice in which vehicle owners officially document their vehicles with a governing agency. Typically, a vehicle must be registered through the state's Department of Motor Vehicles.

    A car owner may not legally drive his or her vehicle without proper registration.

    See also: inspection, department of motor vehicles

    Renewal letter

    A renewal letter (also known as a policy renewal or renewal slip) is a form that an insurer sends, by mail or electronically, to a policyholder just before the current policy term expires and the next one begins.

    A renewal letter also states the premium for the upcoming term.

    See also: binder, rate, policy term, proof of insurance

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    Renewable term insurance

    Renewable term insurance refers to any policy that's eligible for renewal upon the expiration of its current term. If your life insurance policy is renewable, it'll often renew automatically at the end of each term at the same coverage levels so long as the premium has been paid.

    See also: car insurance

    Related link

    • Life insurance quotes
    • Rental car coverage

      Rental car coverage is a form of optional car insurance designed to provide coverage for a replacement vehicle while your car is being repaired or is no longer drivable as the result of an accident.

      Rental car coverage does not provide extra protection on the rental car itself.

      See also: car insurance

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      RepairView®

      Esurance RepairView is an online repair-monitoring service offered to Esurance customers who use an Esurance-approved E-star® facility for their car repairs. Claimants receive daily photos of their car repairs in progress, which they can view or share on any computer, smartphone, or mobile device.

      See also: body shop, E-star, smartphone app, adjuster, claim

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      Replica car

      See kit car.

      Roadside assistance

      See emergency road service.

      S

      Salvage title

      A salvage title is typically assigned to a vehicle that has been deemed a total loss at some point in its history because it suffered extensive damages, like water damage. Due to the added risk, coverage can be difficult to obtain for salvage-title cars, and the value of salvage-title vehicles can be significantly lower than clean-title vehicles.

      See also: total loss, VIN

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      Scooter insurance

      Scooter insurance (also known as moped insurance) is insurance that covers motorized bikes with engines that are smaller than motorcycle engines, such as Vespas. Scooter insurance coverages may include personal liability, collision, and comprehensive. Generally, a motorized bike with an engine smaller than 50 cubic centimeters is considered a scooter.

      See also: motorcycle insurance, all-terrain vehicle insurance

      Related links

      SEA-DOO® insurance

      SEA-DOO insurance (also known as personal watercraft insurance) is insurance designed to protect your SEA-DOO or other personal watercraft in the event of an accident. A SEA-DOO is a personal watercraft similar to a Jet Ski® or a WaveRunner™.

      See also: personal watercraft insurance, boat insurance

      Related link

      Secondary coverage

      Secondary coverage (also known as secondary insurance) helps pay for expenses and damages not already covered by your primary coverage.

      See also: primary coverage, liability coverage, umbrella insurance

      Related link

      Secondary driver

      A secondary driver is an insured driver who isn't a car's primary driver. A secondary driver is sometimes known as an occasional driver in auto insurance terminology.

      See also: primary driver

      Segway insurance

      Segway insurance (also known as Segway scooter insurance) is a form of property and casualty insurance that covers Segway personal transportation devices. Segways are 2-wheeled, self-balancing, motorized scooters riders stand on to operate. Common coverage types, such as liability, collision, and comprehensive, are available on many Segway insurance policies.

      See also: scooter insurance, motorcycle insurance, recreational vehicle insurance

      Single limit

      Single limit coverage (also known as blanket coverage) takes your liability coverage limits and lumps them all together. So, instead of having a $25,000/50,000/25,000 split, you'd simply have a $100,000 limit per accident.

      See also: bodily injury liability coverage, limits, liability coverage

      Related link

      Smartphone app

      A smartphone app is a mobile software application that you can download and run through an app-capable mobile phone like an iPhone® or an Android™ device.

      There are myriad smartphone apps, all designed to perform specified functions. A few common smartphone apps include those dedicated to GPS navigation, games, music, and organization. Esurance offers a free app for iPhone and Android that allows customers to manage policies; file a claim at the accident scene; find repair shops; track repairs; and locate local services like tow trucks, taxis, food, and more.

      Related link

      Snowmobile insurance

      Snowmobile insurance (also known as snow mobile insurance) is insurance that you can buy to protect your snowmobile and yourself in the event of an accident. A policy may include injury and property damage liability coverage, as well as comprehensive and collision coverage.

      Related link

      Specialist

      A specialist, when used as a term in the insurance field, refers to an insurance professional who possesses a distinct and advanced knowledge of a particular type of insurance or company practice. A shopper with in-depth questions regarding car insurance options may seek the advice of a car insurance specialist.

      See also: broker, agent

      SR-22

      An SR-22 is an official document that shows proof of financial responsibility. Departments of motor vehicles may require an SR-22 or a similar form for people convicted of certain traffic violations, like a DUI. An SR-22 can be filed only in the state your policy is issued in.

      If you require an SR-22 on your Esurance policy, please call our customer service team. We can be reached 24 hours a day, 7 days a week at 1-800-ESURANCE (1-800-378-7262).

      See also: financial responsibility, department of motor vehicles, car insurance

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      SR-26

      An SR-26 insurance form is documentation filed by an insurance company when a policyholder no longer requires an SR-22 form or the form expires. The form is sent to the state DMV.

      See also: SR-22, financial responsibility

      Stacking

      Stacking (also known as stacked insurance) is an option available in certain states when you buy uninsured/underinsured motorist bodily injury coverage, which changes the limits for this type of coverage.

      Some states have unique definitions of stacking, but in most states, stacking uninsured/underinsured motorist bodily injury limits increase by the number of cars you're insuring. If you buy $50,000/$100,000 limits for uninsured/underinsured motorist bodily injury coverage, choose stacking, and insure 2 cars, stacked limits for this coverage then equal $100,000/$200,000.

      See also: non-stackable insurance, uninsured motorist bodily injury coverage, underinsured motorist bodily injury coverage

      Steering restraint

      A steering restraint is a durable collar or shield fitted to the upper and lower casing of your car's steering column. The collar makes it harder for potential thieves to access, or "hot-wire," your car's ignition system.

      You may qualify for a car insurance discount if your car is fitted with a steering restraint.

      See also: antitheft recovery system

      Related link:

      Supplemental family member liability coverage

      Supplemental family member liability (SFML) is an optional car insurance coverage available only in Maryland. It can offer financial protection if you're found to be at fault in an accident resulting in injury or fatality to a family member.

      The amount covered by SFML is equal to the bodily injury limits purchased. If the amount of SFML coverage is less than a policy's bodily injury limits, then it is equal to the state's minimum requirements of 20/40.

      If you're in Maryland and would like to add SFML coverage to your quote or policy, please call us at 1-800-ESURANCE (1-800-378-7262).

      See also: family member

      Related link:

      SUV insurance

      See utility vehicle insurance.

      T

      Temporary car insurance

      Temporary car insurance (also known as short-term car insurance) is coverage that can be bought for a short period of time. For instance, if you get rental car insurance because you don't have your own coverage, that's considered temporary car insurance.

      See also: continuously insured, effective date, policy expiration date

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      Third party

      Third party refers to anyone with whom you are involved in an accident. For example, if you get into an accident with another driver, the other driver would be legally considered the third party and his or her insurance would be called third-party insurance.

      See also: primary policyholder, accident

      Related link

      Three-wheeler insurance

      See all-terrain vehicle insurance.

      Ticket

      See citation.

      Travel trailer insurance

      Travel trailer insurance is insurance you can buy to protect your travel trailer in the event of an accident. Travel trailer insurance can cover vacation liability coverage, full timer's coverage, emergency expense coverage, and more.

      See also: recreational insurance

      Related links

      Trip transit policy

      A trip transit policy is coverage established for one specific shipment you're making. This is not to be confused with transit insurance or inland marine insurance, which cover multiple shipments made by a policyholder.

      Tort law

      A tort is a civil wrong in which a person's behavior has unfairly caused someone else to suffer loss or harm. Tort law, therefore, allows someone who is harmed to recover their losses.

      When purchasing auto insurance in certain states, like New Jersey or Pennsylvania, you will be asked to choose either "limited tort" or "full tort." With limited tort, you give up the right to sue for compensation for pain and suffering if you are injured in a car accident — typically in exchange for savings on your car insurance premium.

      With full tort, you are legally permitted to seek money for your pain and suffering due to any injury you receive in a car accident so long as you were not at fault. The full tort option typically raises your car insurance premium compared to the limited tort option.

      Total loss

      Total loss (also known as totaled or complete loss) refers to a situation in which an insured item suffers irreparable damage.

      For example, if the cost to repair a wrecked car is more than 75 percent of its total value, the vehicle could be deemed a total loss. When this happens, the insurance company generally pays the policyholder a monetary amount that equals the total value of the damaged property before the accident, as determined by an adjuster.

      See also: body shop, RepairView®, claim, adjuster, salvage title

      Tow coverage

      Tow coverage (also known as towing reimbursement coverage) is a benefit of roadside assistance coverage that pays the towing expenses for any covered vehicle, up to the defined limit. In most instances, the insured pays for the tow up front and provides his or her insurance company with the receipt. The insurance company then reimburses the policyholder for the towing cost.

      See also: roadside assistance

      Related link

      U

      Underinsured motorist bodily injury coverage

      Underinsured motorist bodily injury coverage (also known as UMBI) can help pay for your medical expenses, lost wages, and other damages when you or your passengers are injured in an accident caused by a driver who has insufficient car insurance coverage. It typically pays the difference between the coverage limit you select and the other driver's bodily injury coverage limit.

      The amount covered by underinsured motorist bodily injury is capped at the limit you choose when you buy your auto insurance policy. Underinsured motorist bodily injury coverage is available only in certain states, where it's often mandatory.

      See also: uninsured/underinsured motorist bodily injury coverage, uninsured motorist bodily injury coverage

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      Underinsured motorist property damage

      Underinsured motorist property damage (also known as UMPD) coverage is mandatory in some states and optional in others. It can help pay for your own property's repairs when the at-fault driver's liability limit is exceeded.

      In other words, if an underinsured driver causes major damage to your car but doesn't have enough insurance to cover the cost of repairs, UMPD can kick in to help cover the cost. UMPD does not apply in hit-and-run situations since the identity of the other driver is unknown.

      See also: liability coverage, uninsured motorist property damage coverage

      Uninsured motorist bodily injury coverage

      Uninsured motorist bodily injury coverage (also known as UMBI) is available in some states, where it's often mandatory.

      This kind of car insurance coverage pays for your medical expenses, lost wages, and other general damages when you or your passengers are injured in an accident caused by a driver who has no car insurance. Uninsured motorist coverage also pays for injuries sustained in hit-and-run accidents.

      The amount covered by uninsured motorist bodily injury is capped at the limit you choose when you buy your auto insurance policy.

      See also: underinsured motorist bodily injury coverage, uninsured/underinsured motorist bodily injury coverage

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      Uninsured motorist property damage coverage

      Uninsured motorist property damage coverage (also known as UMPD) is often mandatory in states where it's available.

      This kind of car insurance coverage protects you if your vehicle is damaged in an accident caused by a driver who has no car insurance. Other protection afforded by this type of auto insurance coverage varies from state to state.

      The amount covered by uninsured motorist property damage is capped at the limit you choose when you buy your auto insurance policy.

      See also: underinsured motorist property damage coverage

      Related link

      Uninsured/underinsured motorist bodily injury coverage

      In some states, both uninsured and underinsured motorist bodily injury are bundled into a single coverage. In states where this type of car insurance coverage is offered, it may be mandatory.

      This kind of auto insurance coverage pays for your medical expenses, lost wages, and other damages when you or your passengers are injured in an accident caused by a driver who doesn't have enough car insurance or who completely lacks auto insurance coverage. This type of auto insurance coverage also pays for injuries sustained in hit-and-run accidents.

      The amount covered by uninsured/underinsured motorist bodily injury is capped at the limit you choose when you buy your auto insurance policy.

      See also: underinsured motorist bodily injury coverage, uninsured motorist bodily injury coverage

      Underwriter

      An underwriter assesses submitted insurance applications and determines whether to provide coverage and, if so, at what price and under what terms.

      See also: agent, broker, actuary

      Usage-based insurance

      Usage-based insurance is a form of car insurance that uses data on your driving habits collected by a telematics device (similar to OnStar®) to calculate your premium. The type of data gathered may vary based on the insurer's standards, but can include time spent driving, miles driven, braking habits, and more.

      By basing your premium on how you drive, rather than on the habits of drivers like you, usage-based insurance may offer you a more accurately personalized premium.

      See also: deductible, defensive driver and driver improvement courses

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      Utility vehicle insurance

      Utility vehicle insurance (also known as SUV insurance or sport utility vehicle insurance) is a form of car insurance that specifically covers utility vehicles. Often called SUVs (short for sport utility vehicles), utility vehicles are generally truck- or van-like, 4-wheel drive, high-performance automobiles originally designed for off-road use. Common types of utility vehicle coverages include liability, collision, and comprehensive.

      See also: travel trailer insurance, recreational vehicle insurance, commercial vehicle

      Related link

      V

      Vehicle history report

      A vehicle history report contains records associated with an automobile's Vehicle Identification Number (VIN). This information can include past owners, accidents, total loss declarations, repairs, and other facts.

      See also: CARFAX, depreciation, salvage title, Vehicle Identification Number

      Related link

      Vehicle insurance

      See car insurance.

      Vehicle registration

      See registration.

      Vehicular coverage

      Vehicular coverage refers to the part of an insurance policy that covers damages to the policyholder's vehicle. This generally includes collision and comprehensive coverages.

      See also: collision coverage, comprehensive coverage, liability coverage

      Related link

      Vehicle Identification Number

      The Vehicle Identification Number (also known as the VIN) is the unique 17-digit number found on each car. The VIN contains the vehicle's serial number, as well as abbreviations for the make, model, and year.

      Your VIN appears on your vehicle registration card. It's also engraved on your car, near the base of the windshield on the driver's side dashboard and/or on the edge of the driver's side door.

      Though you don't need to enter your VIN when you get a car insurance quote from Esurance, you will need to provide your car's VIN when you buy your car insurance policy.

      Verbal threshold

      In no-fault states, a verbal threshold indicates that no-fault coverage applies up to a certain point. In other words, it precludes policyholders from suing for bodily injuries sustained in a car accident unless the degree of injury exceeds the threshold.

      See also: monetary threshold, no-fault insurance, no-fault states

      Related link

      Vespa

      A Vespa is a brand of scooter manufactured in Italy.

      See also: scooter insurance

      VIN

      See Vehicle Identification Number.

      Vintage cars

      The Classic Car Club of America defines vintage cars as vehicles made between 1919 and 1930.

      See also: collector cars, brass era, antique cars, classic cars

      Related links

      W

      WaveRunner® insurance

      WaveRunner insurance (also known as personal watercraft insurance) is insurance designed to protect your WaveRunner or other personal watercraft in the event of an accident.

      A WaveRunner is a trademarked personal watercraft manufactured by Yamaha. Like Kawasaki's Jet Ski®, a WaveRunner is powered by a jet propulsion system that lets its rider easily cover vast expanses of water.

      See also: personal watercraft insurance, boat insurance

      Related link

      Work vehicle

      See commercial vehicle.

      Y

      Young driver

      A young driver, sometimes referred to as a teen driver, is typically a licensed driver under the age of 25. Because of their inexperience, young drivers may pay more for car insurance than more experienced drivers.

      See also: secondary driver

      Related links