Common Insurance Terms



Actual Cash Value

  • Cost of replacing damaged or destroyed property with comparable new property, minus depreciation

Bodily Injury (BI)

  • Injury, sickness or disease sustained by a person, including death at any time resulting there from

Collision Coverage

  • Coverage fro the loss resulting from the striking of another object by a moving vehicle

Comprehensive Coverage

  • An “all risk” type of physical damage protection for auto’s including theft but excluding loss by collision or upset


  • The scope of protection provided under an insurance policy


  • Restoration to the victim of a loss by payment, repair or replacement

Liability Insurance

  • Insurance that pays and renders service on behalf of an insured for loss arising out of his responsibility, due to negligence, to others imposed by law or assumed by contract

Medical Payments

  • Protection to pay the cost of medical care to an injured party regardless of whether the policyholder is liable. Written in conjunction with general and personal liability policies. A similar coverage, auto medical payments insurance, is available in automobile liability policies

Property Damage Liability (PD)

  • A form of “third party” protection covering the insured’s legal liability for damage to property of others caused by the insured’s negligence.

Underinsured Motorist Coverage

  • Coverage an insured may purchase to protect his or her own self from damage or injury caused by a negligent party who does not have adequate limits of insurance to cove the loss