Insurance terms
Insurance claim terms explained
Adjusters, deductibles, policy limits, exclusions and the coverage words in your policy and claim letters.
25 insurance terms
Actual Cash ValueActual cash value, or ACV, is what your car or property was worth immediately before it was damaged or stolen.AdjusterAn adjuster is the person an insurance company assigns to investigate a claim, decide whether it's covered, and work out how much to pay.Bad FaithBad faith is when an insurer handles a claim unfairly or dishonestly, for example by denying a valid claim without a proper reason, dragging it out, or refusing to settle within policy limits when it should.Bodily Injury Liability CoverageBodily injury liability coverage is the part of a car insurance policy that pays for injuries the policyholder causes to other people.ClaimA claim is a formal request for payment.Claim NumberA claim number is the reference an insurance company gives your claim when it's opened.Collision CoverageCollision coverage is the part of a car insurance policy that pays to repair or replace your own vehicle after it hits another vehicle or an object, or rolls over, whoever caused the crash.Comprehensive CoverageIn the US and Canada, comprehensive coverage pays for damage to your own car caused by something other than a collision with another vehicle or object, such as theft, fire, a falling tree, hail, flood or hitting an animal.Coverage LimitA coverage limit is the maximum amount an insurance policy will pay for a particular type of loss.Declarations PageThe declarations page, often called the "dec page", is the summary sheet at the front of an insurance policy.DeductibleA deductible is the amount you pay toward a claim on your own insurance before the insurer pays the rest.Diminished ValueDiminished value is the drop in your car's resale price because it now has an accident history, even after it has been properly repaired.ExclusionAn exclusion is a clause in an insurance policy that removes certain people, vehicles, activities or losses from cover, even though they might otherwise seem to fall within it.First-Party ClaimA first-party claim is one you make under your own insurance policy, such as collision, medical payments, no-fault or uninsured motorist cover.Gap InsuranceGap insurance pays some or all of the difference between what your car insurer pays for a written-off car and what you still owe on the loan or lease, or in some versions, what you originally paid.Independent Medical ExaminationAn independent medical examination, or IME, is an assessment by a doctor chosen and paid by the insurer or the defence, not by you.Insurance PolicyAn insurance policy is the contract between you and your insurer.Liability CoverageLiability coverage is the part of an insurance policy that pays other people when the policyholder is legally responsible for hurting them or damaging their property.Medical Payments CoverageMedical payments coverage, often called MedPay, is an optional US car insurance coverage that pays reasonable medical costs for you and your passengers after an accident, regardless of who was at fault, up to a fairly small limit.No-Fault BenefitsNo-fault benefits are payments from your own car insurance for things like medical bills and lost wages after a crash, paid no matter who caused it.Policy LimitsA policy limit is the most an insurer will pay under a particular coverage for a single accident or claim.PremiumA premium is the price you pay an insurer for your policy, usually monthly or yearly.Recorded StatementA recorded statement is an audio-recorded interview where an insurance adjuster asks you about the accident, your injuries and your medical history.Rental Reimbursement CoverageRental reimbursement is an optional add-on to your own car policy that pays for a rental car, up to a daily and total limit, while your car is being repaired or replaced after a covered claim.Reservation of RightsA reservation of rights is a letter from an insurer saying it will investigate or defend a claim for now, but it may later decide the policy doesn't cover it and refuse to pay.
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