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Automobile Insurance Definitions & Glossary: A – C

Accident – this is a pretty interesting one to start the page, an accident is some unforeseen and inescapable event which results in something happening beyond your control. Interestingly, the majority of motor accidents which result in an insurance claim are not accidents at all, well, they are in that they result in a collision or similar, but generally somebody is at fault somewhere along the line. Anyway, for insurance purposes it’s much better if you’re not the one at fault.

Accident Forgiveness – is common in many states. Basically, if you haven’t had an “at fault” accident for the past five years, some insurance companies won’t hike up your premiums if you have another “at fault” accident. Careful driving really does pay.

Accidental Death Benefit – is an extra “add on” life insurance policy benefit which provides extra cover if the person insured has an accident which results in their death. Burial insurance  is always a good idea, whoever you are.

Act of God – turning water into wine, feeding the five thousand, the divine conception . . .as well as earthquakes, floods, hurricanes. Check out your insurance policy, because some insurers simply won’t pay out if your car is damaged by an Act of God.

Actual Cash Value (ACV) – is the market value of the vehicle at the time of the accident (i.e. the replacement cost less an amount for depreciation).

Adverse Carrier – the other blokes insurance company.

After-Market Parts – this is an important one so learn it! It means that the replacement parts will not be original like the parts installed by the factory.

Agent – is probably the person who organized your insurance policy for you. Agents are simply representatives who might sell insurance for one or a multiple of insurance companies, earning their money by commission from the insurance companies.

Alien Insurance Company – is from another country, not, as you may have thought, from another planet!

Amendment – is any alteration to the original policy (similar to an endorsement, but that adds to the policy instead of just changing it).

Anti-Theft Device – is a good way to try and reduce your automobile insurance premiums. Car alarms, starter disablers, recovery systems etc. Anything which can help to prevent your car from being stolen and you making a claim, insurance companies do not like paying out on claims if they can possibly help it.

Appraisal – is a process which determines what your car is worth, usually by impartial experts.

Arbitration – if you find yourself in the middle of a dispute, arbitration is where an impartial expert (there he is again) tries to settle the dispute thus avoiding costly litigation.

Assured / policy holder / insured – it’s all the same thing. Whoever has the insurance policy!

Auto Damage Adjuster – writes the repair estimate (after an accident) for your vehicle. They should be able to answer any questions you have at the time about whether you can have a rental car, the repair process etc.

Automobile Insurance Premium Discounts – are sometimes available if you have safety features fitted to the car – anti-theft devices, seat belts, air bags, or if the driver has been on training courses etc. Anything which makes the insurance company believe that you are a lower risk.

Binder – this is a temporary agreement which means that the policy is actually in effect. Binders can be used with immediate effect if the policy can’t be issued or endorsed in time for some reason.

Blue Book – often used to determine the value of used cars and trucks.

Bodily Injury – an injury sustained to the body . . . in this case as the result of an accident.

Cancellation – is where the policy is cancelled by either the policy holder or the insurance company before it has run its full term.

Carrier – simply means the insurance company, why don’t they just say so?

Catastrophes – are not when the dog swallows the car keys (not in this case anyway), but are more like Acts of God (go back to the top of the page if you can’t remember that one).

Certificate of Financial Responsibility – is a state requirement certification form, FR-44, SR-22, SR-50 or similar.

Certificate of Satisfaction – you’ll probably have to sign one of these when your car is returned from the repairer, just to say that you are entirely satisfied with the job that they’ve done and that it meets your exacting standards! Check the whole thing over carefully before signing on the dotted line . . .

Claim – means whenever you request some money as per the terms of your insurance policy.

Claim Adjuster – is the person you make the claim to, and they are responsible for sorting it out.

Claimant – the person (or company) making the claim.

Clause – not as in “Santa”, this one has an “e”. Anyway, this sort of clause is the one you should read on your insurance policy as it will explain everything to you, making the conditions of coverage absolutely crystal clear.

Comparative Negligence – is where you are not “at fault” for any accident or claim, but are partly responsible. This means that you will probably be able to claim part of the costs or damages, and so will the other party. This will be shared out proportionately, depending on who has the biggest portion of blame.

Competitive Estimate – is what you’ll probably need to supply your insurance company with, well, several of them probably before they decide on how much they’ll pay out for your repairs.

Conditions – outline the responsibilities and duties of both the insured, and the insurance company.

Contributory Negligence – is kind of the opposite of comparative negligence. In some states you might not be able to claim for any damages or portion of the costs if you are found to be even partly to blame.

Customized Vehicle - is any vehicle which is not typical or standard for that vehicle. This might affect your ability to claim, especially if the insurance company feel that the custom parts have contributed to the accident.