Policy Dictionary

The portion of a covered loss you pay before coverage pays the rest.

Think of a deductible as your share of a covered repair. If a policy lists a $500 deductible, you handle the first $500 of an eligible claim and the policy addresses the remaining covered amount, up to its limits.

Example: A covered repair costs $2,000 and the deductible is $500. The policyholder pays $500.

The amount paid to keep a policy active for a set period.

A premium is the recurring price of having the policy in force. It may be billed monthly, every six months, or yearly. Paying it keeps the coverage described in the policy active.

Example: A six month policy billed monthly splits the premium into six payments.

Coverage for damage or injury you are legally responsible for causing to others.

Liability coverage relates to harm you cause to other people or their property. It is usually split into bodily injury liability and property damage liability, and most states set a minimum amount.

Example: Limits written as 25/50/25 describe per person injury, per accident injury, and property damage amounts in thousands.

A situation or item the policy specifically does not cover.

Exclusions are the carve outs. They list events, uses, or items that fall outside the policy. Reading the exclusions section helps explain why a claim might not be eligible.

Example: Some personal policies exclude using a vehicle for paid deliveries.

The maximum amount a policy will pay for a covered loss.

Every coverage has a ceiling. The limit is the most the policy will pay for that type of covered loss. Amounts above the limit are not covered by that part of the policy.

Example: A $25,000 property damage limit caps payment for damage to others' property at $25,000.

The summary page listing who and what is covered, limits, and deductibles.

Often called the dec page, this is the snapshot of your policy. It lists the named insured, the vehicles, the policy period, each coverage, its limit, and its deductible.

Example: Checking the dec page is the fastest way to confirm a collision deductible.

Coverage for vehicle damage not caused by a collision.

Comprehensive relates to events like theft, hail, fire, flooding, falling objects, or hitting an animal. It usually carries its own deductible.

Example: A windshield cracked by hail is typically a comprehensive matter.

Coverage for damage to your vehicle from hitting another vehicle or object.

Collision addresses damage to your own vehicle after an impact with another car, a pole, a guardrail, or a rollover, regardless of who was at fault.

Example: Backing into a parking garage pillar would generally fall under collision.

The duties and rules both parties agree to follow under the policy.

Conditions explain responsibilities, such as reporting a loss promptly, cooperating with an investigation, and how cancellation works. Not meeting conditions can affect a claim.

Example: A condition may require notifying the company of an accident within a reasonable time.

The person or entity listed on the declarations page as the policyholder.

The named insured is the primary person the policy is written for. They typically have the right to make changes or cancel the policy.

Example: Household members may be covered drivers without being the named insured.

A written change that adds to, removes, or modifies the policy.

Endorsements are amendments attached to the base policy. They can add coverage, change definitions, or update details like a new vehicle.

Example: Adding roadside assistance is often done through an endorsement.

Coverage for injuries caused by a driver who has no liability coverage.

This coverage relates to situations where the at fault driver has no insurance. A related coverage, underinsured motorist, applies when the other driver's limits are too low.

Example: Some states require insurers to offer this coverage on every policy.