Actual Cash Value
The cost to replace an item of property at the time of loss, usually less an allowance for depreciation. Often used to determine the amount of reimbursement for a loss.

Automobile Insurance Plan
A state-sponsored plan for providing automobile insurance to those who are uninsurable under standard automobile insurance plans. The plan specifies that each insurance company must accept a proportionate share of poor-risk applicants. Premiums are usually higher, and coverage is restricted. Also called “Assigned Risk Plan”.

Bodily Injury (BI)
Coverage for injury to others for which you are found to be legally liable.

Collision Coverage
Automobile physical damage insurance that covers loss due to the insured automobile striking another automobile or object or the upset of the insured automobile.

Comprehensive Coverage
A broad automobile physical damage coverage that pays for loss to an insured auto and its equipment from most causes except upset or collision with another object or with a vehicle to which it is attached. Also called “Other Than Collision” coverage.

Deductible
A specified dollar amount beyond which insurance protection begins. The insured assumes a loss up to the limit of the deductible amount, then the insurance company pays the remainder of the covered loss up to the policy limit.

Depreciation
A decrease or loss in value because of wear, age or other cause.

Insurable Interest
A person or entity who would suffer a financial loss from the loss or destruction of property has an insurable interest in that property.

Liability Coverage
Insurance under which insureds are covered for financial loss as a result of becoming legally obligated to pay others for injuries or damages. In automobile insurance, it means those obligations that are related to ownership, maintenance or use of an automobile.

Loss Payable Clause
An insurance clause that in the event of a loss permits payment to a lienholder or loss payee, such as a bank or other lender, which has an insurable interest in insured personal property (such as a automobile), in an amount up to the amount of that insurable interest.

Mandatory Coverages
Insurance coverages required by state law to be included when purchasing certain insurance policies.

Medical Payments Coverages
An insurance coverage that provides reimbursement on a no-fault basis for medical expenses that are incurred under circumstances described in the policy.

Named Insured
The individual or organization named in the Declarations of an insurance policy as the insured, as opposed to someone who may have an interest in the policy but is not named in it. Usually includes a spouse if he or she is a resident of the same household and the named insured is an individual.

No-Fault Insurance
A form of automobile insurance that is mandated by law in many states whereby an insurance company reimburses its insured for automobile losses, regardless of fault and without resort to subrogation.