Understanding insurance terminology helps you make informed decisions. Our comprehensive glossary explains the most important insurance terms in plain English.
A
- Actual Cash Value (ACV)
- The replacement cost of an item minus depreciation. What your property is worth today, not what you paid for it.
- Aggregate Limit
- The maximum amount your policy will pay for all claims during the policy period.
- Auto Liability
- Coverage that pays for damage and injuries you cause to others in an auto accident.
C
- Claim
- A formal request to your insurance company for payment of a covered loss.
- Collision Coverage
- Auto insurance that pays for damage to your vehicle from accidents, regardless of fault.
- Comprehensive Coverage
- Auto insurance covering damage from theft, vandalism, weather, and other non-collision events.
D
- Deductible
- The amount you pay out-of-pocket before your insurance coverage kicks in.
- Depreciation
- The decrease in value of your property over time due to age, wear, and obsolescence.
L
- Liability Insurance
- Coverage that protects you when you’re legally responsible for someone else’s injuries or property damage.
- Loss
- Damage to or destruction of insured property, or an incident that triggers an insurance claim.
P
- Policy Limit
- The maximum amount your insurance will pay for a covered claim.
- Premium
- The amount you pay for your insurance coverage, typically monthly or annually.
R
- Replacement Cost
- The cost to replace damaged property with new property of similar kind and quality.
- Rider
- An addition to your policy that modifies coverage for specific items or situations.
Have questions about your coverage? Contact Vallie Insurance for expert explanations and personalized guidance.