Auto Insurance Terms

We’ve compiled a list of definitions for the most commonly used auto insurance terms. You’ll learn the difference between collision coverage and comprehensive coverage, what bodily injury liability provides, when you need an SR-22 insurance document, and more. Consider this as your course in “Auto Insurance 101.”

Types of Insurance Coverage

Liability Only Car Insurance
Insurance coverage that covers a driver for damages to other people and property as a result of an accident.

Minimum Limits Auto Insurance
The least amount of auto insurance required for an individual to legally drive in a state. It is sometimes called “low limit liability only” car insurance, though some states require more.

Bodily Injury Liability Coverage
Insurance coverage which pays for injuries and/or death of people involved, other than yourself, if you are at fault.

Property Damage Liability Coverage
Insurance coverage which helps pay for damages to other people’s cars and other property as a result of an accident for which you are at fault.

Full Coverage Car Insurance
Insurance coverage that includes liability, collision and ”comprehensive” protection (which covers your car in case of an accident, theft, fires, floods and more).

 

Types of Additional Coverage

Comprehensive Car Insurance Coverage
Insurance coverage that provides coverage for theft and most other (non-collision related) physical damage losses you could incur.

Collision Car Insurance Coverage
Insurance coverage that pays for damages to your car if it collides with another car or object.

Uninsured Motorist Coverage
If you suffer bodily injury in an accident caused by someone else who does not have auto insurance, uninsured motorist coverage may provide you compensation.

Underinsured Motorist Coverage
If you suffer bodily injury in an accident caused by someone else who does not have enough auto insurance to cover the damages for your injuries, uninsured motorist coverage may provide you with compensation.

 

Basic Auto Insurance Terms

Car Insurance Deductible
A car insurance deductible is the amount of money you pay out-of-pocket before the insurance company covers the remainder if you’re involved in a covered loss.

Car Insurance Premium
A car insurance premium is the amount of money paid to an insurance company in return for insurance protection.

Driver Status
Driver status refers to the classification of others on your policy including “rated,” “excluded” and “listed.”

Lien Holder
A lien holder is someone who has either leased a vehicle to you and has an insurable interest, or loaned you the money to buy it.

Occasional Driver 
An occasional driver on a car insurance policy is a person who is not the “principal” or primary driver of the insured vehicle.

Policy Expiration Date
A policy expiration date is the date on which your policy ends. 

Principal Driver
Principal drivers are those who drive the car most often. 

Policy Term
An auto insurance policy term is the length of time you are actively insured under your policy.

Vehicle Identification Number (VIN)
A VIN number is the Vehicle Identification Number, which is a combination of 17 letters and numbers that is used to identify the make, model and year of a car. 

 

Insurance Forms

Auto Insurance Declaration Page
An auto insurance declaration page is a summary of your auto policy provided by your auto insurance provider.

SR-22 Insurance Document
An SR-22 is a form submitted by your insurance carrier that proves to the state that you are maintaining auto insurance liability coverage.

 

If you’re looking for more information on the basics of car insurance, take a look at our frequently asked questions.