Casualty Insurance Terms


Additional Insured – An additional insured has partial ownership of a vehicle or is liable for a vehicle that is insured by another party. This endorsement is commonly added when there is a loan/lease or co-signer on the vehicle and there is a financial interest present.  

Additional Interest – A company or person who has been named as an additional interest/insured on a policy can be liable for an accident that involves an insured person or vehicle.

Bodily Injury Liability Coverage (BI) – Bodily Injury coverage pays for injuries/death to people involved in the accident other than the insured driver. BI also pays for defense costs if a lawsuit is pursued after the accident.

Comprehensive Coverage (Comp) – Comprehensive coverage will pay for the damage other than a collision. This includes damages from fire, theft, windstorm, flood and vandalism.

Collision Coverage (Coll) – Collision coverage pays for the damage to your vehicle when it overturns or collides with another object. Collision coverage also may extend to a non-owned vehicle or one rented for personal use, certain exclusions may apply.

Custom Parts & Equipment – This optional coverage covers equipment, devices, accessories, enhancements and changes, other than those that the manufacturer originally installs, that alter the appearance or performance of a covered auto, motorcycle, or off-road vehicle.

Deductible – A deductible is the amount you agree to pay out of pocket for damage resulting from a covered loss or accident. In most cases choosing a higher deductible will lower your premium.

Liability – The state of being responsible for something, especially by law.

Loan/Lease Payoff Coverage – Loan/Lease coverage pays the difference between what you owe on your vehicle and what your insurance pays if your vehicle is declared a total loss or stolen and not recovered, less your comprehensive or collision deductible. This coverage is subject to certain restrictions/exclusions depending on carrier.

Loss Payee – A person or entity with an insurable interest in the vehicle/property. This is usually a financial institution that loaned money to buy a vehicle. If the vehicle is damaged or totaled in an accident, the initial payment will be made to the insured and to the loss payee on your policy.

Medical Payments Coverage (Med Pay) – MedPay is an optional coverage that pays for reasonable and necessary medical and even funeral expenses for covered persons. These expenses must be incurred as a result of an auto accident.

Personal Effects Coverage – PE Coverage pays up to specified replacement cost limits for loss of, or damage to, contents including but not limited to; clothing, cameras and equipment used with cameras; portable radios and CD players; and travel tickets, passports, and manuscripts. This coverage is most commonly associated with RV and Boat policies.

Property Damage Liability Coverage (PD) – Property Damage coverage pays for damage to others’ property resulting from the accident. PD also pays for defense costs if a lawsuit is pursued after the accident.

Rental Reimbursement Coverage (Loss of Use) – Rental Reimbursement also known as loss of use provides rental car coverage if you have a claim that is covered under Comprehensive or Collision coverage.

Roadside Assistance Coverage – Roadside Assistance is an optional coverage that provides services such as towing, flat tire change, locksmith services and battery jump-start to a covered vehicle.

SR-22 – An SR-22 is a document required by the court that demonstrates proof of financial responsibility for persons convicted of certain traffic violations. In the event a policy goes into cancellation and coverage is no longer in force the motor vehicle department is notified, additional action may be taken against driving privileges such as suspension of registration or suspension of the insured’s license.

Uninsured/Underinsured Motorist Coverage (UM/UIM) – If driver or owner of a vehicle is legally liable for an accident but does not have insurance or does not have enough insurance, you can use Uninsured/Underinsured motorist to cover damage to your insured vehicle, up to the limits you select.