Car insurance glossary

Accident forgiveness is a policy feature that keeps your first at-fault accident from raising your premium — earned with clean driving or bought as an add-on.

Actual cash value is what your car is worth today - its replacement cost minus depreciation. It is the cap on most collision and comprehensive payouts.

Annual mileage is how many miles you drive in a year — a rating factor insurers use to price your policy. Lower-mileage drivers usually pay less.

An at-fault accident is a crash your insurer decides you primarily caused. It usually adds a surcharge to your premium at your next few renewals.

Bodily injury liability is the part of car insurance that pays for injuries you cause to others. It is the first two numbers in limits like 50/100/25.

A deductible is the amount you pay out of pocket on a covered claim before your insurer pays the rest. Choosing a higher one lowers your premium.

A chargeable accident is one your insurer holds you responsible enough for to raise your rate. Not-at-fault accidents are generally non-chargeable.

Collision coverage pays to repair or replace your own car after a crash with another vehicle or object, regardless of fault, minus your deductible.

Comprehensive coverage pays for non-crash damage to your car: theft, fire, vandalism, weather, falling objects, and animal strikes like hitting a deer.

A coverage lapse is any period with no active car-insurance policy. Even a short gap can mark you as higher-risk and bring state registration penalties.

A credit-based insurance score is a number insurers derive from your credit report to help predict claim risk. It differs from a lender's credit score.

Your declarations page — the 'dec page' — is the summary of your policy listing who and what is covered, your limits, deductibles, and premium.

A defensive-driving course is a state-approved safety class that can earn an insurance discount or remove points from your driving record.

A DUI is a conviction for driving under the influence. It brings one of the largest insurance surcharges and often an SR-22 or FR-44 filing requirement.

An endorsement — also called a rider — is a written amendment to your policy that adds, removes, or changes coverage and becomes part of your contract.

Force-placed (lender-placed) insurance is coverage a lender buys on your financed car when your own policy lapses. It is costly and protects the lender.

An FR-44 is a certificate Florida and Virginia require after serious offenses like DUI, proving you carry doubled liability limits for three years.

Full coverage is not one policy. It usually means liability plus collision and comprehensive coverage carried together. Here is what it includes and excludes.

Gap insurance pays the difference between what you owe on a financed or leased car and its actual cash value if the car is totaled or stolen early on.

A good-student discount is a car-insurance price break for young drivers who keep strong grades — typically a B average (3.0 GPA) or better.

A premium is the amount you pay your insurer to keep a policy active — usually billed monthly, every six months, or annually. It is the price of coverage.

A surcharge is an amount added to your car-insurance premium after an at-fault accident, ticket, or DUI, reflecting the higher risk you now represent.

Liability coverage pays for injuries and property damage you cause to others in an at-fault accident. It is the core of every state's minimum requirement.

MedPay is optional car insurance that pays medical bills for you and your passengers after a crash, regardless of fault, up to a set limit.

The NAIC is the U.S. body of state insurance regulators. It assigns each insurer an NAIC number and publishes consumer complaint data across all lines.

The NAIC complaint index compares how many complaints a carrier gets to its market share, by line. 1.0 is average; below 1.0 means fewer than expected.

The named insured is the person or people listed by name on a policy as the primary policyholder, holding the rights and responsibilities under the contract.

Non-owner car insurance is a liability-only policy for people who drive but do not own a car, often used to keep coverage continuous or file an SR-22.

Personal Injury Protection (PIP) pays your own medical bills and lost wages after a crash regardless of fault. It is required in no-fault states.

Property damage liability pays for damage you cause to other people's property, such as their car. It is the third number in limits like 50/100/25.

A rating territory is the geographic zone — usually ZIP codes or counties — an insurer uses to price your policy based on where you live and park your car.

Rideshare insurance fills the gap left by a personal auto policy while you drive for Uber or Lyft, which standard policies usually exclude.

SERFF is the System for Electronic Rate and Form Filing — the NAIC-run system insurers use to file their rates and rules with state regulators for review.

Split limits are the three numbers on a liability policy — like 25/50/25 — capping what your insurer pays per person, per accident, and for property damage.

An SR-22 is not insurance - it is a form your insurer files to prove you carry the state-required minimum coverage, usually after a serious violation.

State-minimum car insurance is the least liability coverage your state's law requires you to carry to drive legally. It protects others, not your own car.

Subrogation is when your insurer, after paying your claim, recovers the money from the at-fault party's insurer - and can refund your deductible.

Telematics, or usage-based insurance, uses an app or device to measure how you actually drive and adjusts your premium — usually a safe-driving discount.

An umbrella policy is extra liability coverage above your auto and home limits, paying out after those are exhausted — usually in million-dollar layers.

Underinsured motorist (UIM) coverage pays for your injuries when an at-fault driver has liability insurance, but not enough to cover what they owe you.

Uninsured and underinsured motorist coverage pays for your injuries when an at-fault driver has no insurance or too little. Required in some states.