Auto Insurance Glossary

Bodily Injury Liability:
Situation where policyholder is considered legally responsible for the injury or death of a third party motorist. This type of insurance combines with property damage to form the basis of most auto insurance policies.

Collision:
Benefit type that helps pay for repairs to a vehicle that is made inoperable by a collision with another vehicle, public property or private property.

Deductible:
The amount determined by an insurance company at the beginning of an auto insurance policy that needs to be paid out by the policy holder to realize benefits following an accident.

Gap Insurance:
This coverage provides funds to make up the difference between the value of a car and the remaining auto loan amount if your vehicle is totaled in an accident.

Insured:
Individuals who are covered by an auto insurance policy. The definition of insured motorists extends from the policy holder outward to immediate family members and individuals who are given permission to operate a covered automobile.

Medical Payments:
This benefit helps pay emergency room, surgical and funeral bills that are made necessary by an auto accident. Medical payments are designed to protect policy holders, family members and passengers without regard to fault. Policy holders receive this benefit if they are involved in an accident as a driver or a passenger.

Other-than-collision:
This term is a synonym for comprehensive coverage and it covers all insurable acts that do not include collisions and overturned vehicles. Other-than-collision coverage may cover flooding, fires and other natural acts in addition to vandalism and theft.

Physical Damage:
A catch-all phrase for insurance benefits that cover damage done to an automobile during an accident. These benefits include collision coverage and comprehensive coverage within an insurance policy.

Property Damage Liability:
Damage to personal property ranging from minor damage to total loss that you are found to be legally responsible for repairing. This liability is packaged with bodily injury liability as the standard package for most auto insurance policies.

Rental Reimbursement:
Amount of reimbursement written into an insurance policy that covers your use of a rental car while your vehicle is repaired due to a covered loss.

Underinsured Motorist:
An optional aspect of insurance that covers bodily injury developed during an accident with a legally liable driver who has inadequate insurance coverage to pay for medical bills.

Uninsured Motorist:
An aspect of insurance coverage that covers bodily injury developed during an accident with a legally responsible driver who lacks any auto insurance coverage to pay for medical bills.

Anti-lock Brake Credit:
Financial credit for policy holders who have a vehicle with anti-lock brakes which help prevent accidents in inclement weather.

Anti-Theft Credit:
Credit offered by insurance companies for various anti-theft devices within a policy holder's vehicle including active disabling devices, alarms, keyless entry, ignition disabling devices and tubular locks.

Car Pool Credit:
Insurance companies utilize a car pool credit to decrease the risk they carry with each policy. Car pools allow multiple policy holders to drive in a single covered vehicle, decreasing overall traffic which decreases the opportunities for an accident during the daily commute.

Defensive Driver Credit:
This credit type allows a policy holder to take a state-sponsored defensive driving course in order to decrease their premium. The key to maintaining this credit is renewing certification and adhering to new state defensive driving regulations.

Driver Training Credit:
Policy holders under 21 who take a driver training course offered by their state can save money on their premium.

Forgiveness Credit:
Loyal policy holders may get this credit if they renew their policy over a matter of years. In addition to decrease premium levels, policy holders with a forgiveness credit may also have minor traffic violations excused from their record.

Good Student Credit:
Full-time students who maintain a solid grade point average and a responsible driving record will receive the benefit of this credit.

Loss Free Credit:
This credit type decreases premiums for policy holders who renew their insurance and do not have a covered loss on their record.

Low Mileage Credit:
Drivers who have a low mileage credit can decrease their financial costs for insurance by decreasing their annual mileage.

Mature Driver Discount:
Insurers who specialize in insuring drivers over age 55 provide special premium discounts for this age group.

Multi-Car Credit:
Families with multiple cars in their garage can get an insurance savings by getting a policy for each car through the same company.

Multi-Policy Credit:
Some insurance companies sell health, life, homeowner's and car insurance under the same name. Policy holders who keep their insurance policies within the same company can receive a discount with each renewal.

Passive Restraint Credit:
Insurance companies offer lower prices to support passive restraints within a vehicle including air bags, side curtain bags and automatic seat belts.

Renewal Credit:
Policy holders who renew their insurance regularly with the same company may receive credits toward their next renewal.

Student Away Credit:
This credit type benefits students who are at least 100 miles away from their home town and lack access to a vehicle. Insurance companies provide this coverage to help students in their capacity as passenger because the overall risk is reduced if students aren't behind the wheel.