Insurance Terms & Definitions


Insurance terminology can be confusing. Use our glossary to learn common insurance terms,
coverage definitions, and policy language so you can better understand your insurance options and coverage.

Looking for a specific insurance term? Search below to quickly find its definition.

Insurance Terms & Definitions

Understand common insurance terms, coverage, and policy language. Search below to find a definition.

A

Accident

An unexpected event or circumstance that causes bodily injury or property damage. Depending on the policy, it may refer to a single event at a specific time and place or to repeated exposure to the same conditions.

Actual Cash Value (ACV)

Current market value of lost or damaged property at the time of a covered loss.

For example:

  • The value of a 5-year-old vehicle is based on the value of similar 5-year-old vehicles selling for.

Actuary

An insurance professional who uses statistics and financial data to evaluate risk, help set premiums, analyze trends, and estimate how much an insurer should reserve to pay future claims.

Additional Insured

A person or organization, other than the named insured, that is added to a policy and receives certain coverage under its terms.

Appraisal

An estimate prepared by a claims representative or appraiser to determine the extent of damage to a policyholder’s property or vehicle and the expected cost of repairs. If the damage is severe, the property or vehicle may be determined to be a total loss.

Auto Insurance

Auto insurance can help pay for damage to your vehicle and injuries or property damage you cause to others, depending on the coverages you choose.

B

Binder

A temporary agreement that provides insurance coverage until the formal policy is issued.

Bodily Injury Liability (BI)

Coverage that helps pay for injuries or death to others when an insured driver is legally responsible for an accident. It may also help cover legal defense costs if a lawsuit results.

For New York auto policies The minimum bodily injury liability limits are $25,000 per person and $50,000 per accident. If an injury results in death, the minimum limits are $50,000 per person and $100,000 per accident.

Broker

An insurance professional who helps customers obtain coverage by working with insurance companies rather than representing a single insurer as its agent.

Business Owners Policy (BOP)


A package policy designed for many small businesses that typically combines property and liability coverage in a single policy.


Learn more about Business Owners Policy coverage.

C

Cancellation

The termination of an insurance policy before the end of its scheduled policy period.

Carrier

An insurance company that issues policies, provides coverage, and pays covered claims.

Claim

A request made to an insurance company for payment or assistance following a covered loss or event.

Need to file or track a claim? Visit our Claims Assistance page.

Collision Coverage

Coverage that helps pay to repair or replace your vehicle after a collision with another vehicle or object, subject to the policy deductible and terms.

Comprehensive Coverage

Coverage that helps pay for damage to your vehicle from certain events other than a collision, such as theft, fire, vandalism, falling objects, or weather-related damage.

Explore comprehensive coverage and other auto insurance options.

Commercial Lines

Insurance policies designed to cover a business’s property, operations, vehicles, and liability risks.

Commercial General Liability (CGL) Insurance

Coverage that can help a business pay for claims involving bodily injury, property damage, or personal and advertising injury, subject to the policy’s terms. 

Learn more about General Liability Insurance.

Coverage

The protection provided by an insurance policy for specified risks, losses, or events, subject to the policy’s terms, limits, conditions, and exclusions.

Covered Auto(s)

Vehicles listed on an auto insurance policy as covered. Depending on the policy, a temporary substitute vehicle may also qualify while a covered vehicle is being repaired or is out of service.

Condo Insurance

Coverage designed for condominium owners that may help protect personal belongings, interior features of the unit, personal liability, and certain additional living expenses, subject to the policy’s terms and limits.

Learn more about condo insurance coverage.

Classic Car Insurance

Coverage designed for classic or collectible vehicles, often using an agreed value established by you and the insurer to determine the vehicle’s value for a covered total loss.

Learn more about coverage for classic and collectible cars.

D

Declarations page (dec page)

A summary section of an insurance policy that lists key information such as the named insured, covered property or vehicles, policy limits, deductibles, and policy period.

Deductible

The amount you’re responsible for paying toward a covered loss before insurance coverage applies.

Depreciation

The decrease in the value of property over time due to age, wear and tear, or obsolescence.

Discount

An insurance discount lowers your premium when you meet an insurer’s requirements. Auto discounts may apply for defensive driving, vehicle safety features, or multiple vehicles. Explore auto insurance discounts in New York.

Dwelling Coverage

Coverage that helps pay to repair or rebuild the structure of a home after damage from a covered loss.

E

Effective Date

The date an insurance policy or coverage begins.

Endorsement

A written change to an insurance policy that adds, removes, or modifies coverage or policy terms.

Emergency Road Service Coverage

Coverage that helps pay for certain roadside assistance services when your vehicle becomes disabled, subject to the policy’s terms and limits.

For example:

  • Towing not related to an accident
  • Battery jump-start service
  • Flat-tire assistance
  • Lockout service
  • Fuel delivery

Learn more about auto insurance coverage.

Exclusion

A provision in an insurance policy that identifies losses, risks, property, or circumstances that are not covered.

Expiration Date

The date an insurance policy or coverage ends unless it is renewed.

F

Floater Policy

Coverage for personal property that follows the insured items as they are moved or used in different locations, subject to the policy’s terms and covered territory.

Full Coverage

An informal term often used to describe a combination of liability, collision, and comprehensive auto coverages. It does not mean every possible loss is covered.

First-Party Claim

A claim made by a policyholder under their own insurance policy.

G

Gap Insurance

Coverage that may help pay the difference between what you owe on a financed or leased vehicle and the vehicle’s actual cash value if it is totaled or stolen.

General Damages

Compensation for non-economic losses resulting from an injury, such as pain and suffering, emotional distress, or loss of enjoyment of life.

Grace Period

A limited period after a payment due date during which a policy may remain in effect before cancellation for nonpayment, depending on the policy and applicable law.

Guaranteed Replacement Cost

Coverage that may help pay the cost to rebuild a home after a covered loss even if the cost exceeds the dwelling coverage limit, subject to the policy’s terms and conditions.

H

Hazard

A condition or circumstance that increases the likelihood or severity of a loss.

Homeowners Insurance

Coverage designed to help protect a home, personal belongings, and personal liability against certain covered losses, subject to the policy’s terms and limits.

Learn more about homeowners insurance coverage.

I

Indemnity

The principle of restoring an insured person, as closely as possible, to the financial position they were in before a covered loss.

 

Insurable Interest

A financial or other recognized interest in property or a person that could result in a loss if that property is damaged or that person is harmed.

 

Insurance Policy

A contract between an insurance company and a policyholder that describes the coverage provided, limits, conditions, exclusions, and other policy terms.

 

Insurance Premium

The amount paid for insurance coverage, typically on a monthly, semiannual, or annual basis.

 

Insured

A person or organization covered by an insurance policy.

 

Insurer

The insurance company that issues a policy and agrees to pay covered claims under its terms.

N

No-fault Insurance

May help cover medical expenses, lost wages, and certain other costs after a car accident, regardless of who caused it. Coverage varies by state and is subject to your policy’s terms and limits.

In New York No-fault coverage is called Personal Injury Protection (PIP). New York requires at least $50,000 in basic no-fault coverage per eligible injured person. Benefits depend on the policy and state rules.

Non-Waiver Agreement

An agreement signed by the policyholder and insurer after a claim. It allows the insurer to investigate the loss while preserving its right to decide whether the policy covers it.

P

Property Damage Liability (PD)

Coverage that may help pay for damage you’re legally responsible for causing to someone else’s property. Depending on the policy, it may also help cover legal defense costs. Coverage is subject to the policy’s terms and limits.

For New York auto policies New York requires at least $10,000 in property damage liability coverage per accident for damage to someone else’s property.

Personal Injury Protection (PIP)

Coverage that may help pay medical expenses, lost wages, and certain other costs after a covered accident, regardless of who caused it. In New York, PIP is commonly called no-fault coverage. Benefits depend on the policy and applicable state rules.

Personal Property Coverage

Coverage included in many homeowners, condo, and renters insurance policies that may help pay to repair or replace your belongings if they’re damaged or stolen by a covered event.

Personal property includes items such as furniture, clothing, electronics, and kitchenware. Your belongings may also be covered while you’re away from home, depending on the policy’s terms, limits, and deductible.

Policy Limit

The maximum amount an insurer may pay for a covered loss under a particular coverage. A limit may apply per person, per accident or claim, or over the policy period. Costs above the applicable limit are generally your responsibility, subject to the policy’s terms.

Q

Quote

An insurance quote is an estimate of the cost of coverage based on the information you provide and the coverage options you select. The final price may change after the insurer reviews and verifies your information.

Request an insurance quote

U

Uninsured Motorist Coverage

May help pay for injuries caused by a driver who has no insurance or, where covered, an unidentified driver. Coverage for drivers whose insurance limits are too low is generally called underinsured motorist coverage. Benefits depend on your policy and state rules.

In New York Auto policies include at least $25,000 per person and $50,000 per accident in uninsured motorist coverage for bodily injury. Optional Supplementary Uninsured/Underinsured Motorists (SUM) coverage can provide added protection if an at-fault driver is uninsured or does not have enough bodily injury coverage.

Learn more about auto insurance coverage options.

W

Warranty

A written guarantee from a manufacturer or seller to repair or replace a product or its parts if they are defective, subject to the warranty’s terms.

This material is intended for general information only. It does not expand coverage beyond the policy contract. Please refer to your policy contract for specific information regarding coverage, terms, conditions, exclusions, and applicability.

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