A list of the most commonly used terms in auto insurance and their definitions
Shopping for auto insurance, selecting coverage options, or reviewing a new insurance policy can be a daunting task if you don’t have the proper tools. We’d like to make the process easier. Here’s a list of common auto insurance terms that you can refer to throughout the process of speaking with an insurance agent or broker.
Here are the terms you might come across during the auto insurance shopping process.
In certain cases, you or the insurer may choose to end your insurance coverage prior to renewal. This is called a non-renewal.
Now that you are more familiar with the commonly used auto insurance terms, be sure to check out our list of the best auto insurance of 2023. Also visit our page for more frequently asked questions about car insurance.
Here are some of the top questions we’ve received about auto insurance policies.
No, an insurance binder is not your policy. A binder is an overview of your policy that acts as temporary proof of insurance until the insurer issues the official certificate in roughly 30 to 90 days.
You can generally change your mind and cancel the policy at any time in the insurance process. However, there might be penalties.
First, discuss your concerns with your agent. If you are comparison shopping and notice a better product for your needs, mention this. If you decide to cancel the policy, ask your agent about the process. Some insurers require written cancellations.
Depending on how far into the insurance contract you are at the time of cancellation and if you made advanced payments, you could be entitled to a refund for your unused portion, so ask your agent about this as well.
You can change your coverage, coverage amounts, and/or terms through an endorsement. You can add an endorsement when you purchase the policy, in the middle of the policy term, or upon policy renewal.
Contact your agent for specifics, then submit your endorsement to the insurance company for approval. As soon as it is approved, be sure to save all new documents associated with your existing policy.
Follow these steps to add a car to your existing policy:
When you purchase a car, don’t delay adding it to your existing policy. The grace periods in which you can add another car to your existing policy vary by carrier, but they tend to range from about a week to a month.
SR-22 Insurance- What is it and how does it work? GEICO. (2022).
SR – 50 Affidavit of Insurance. Indiana Bureau of Motor Vehicles. (2022).
What’s an FR-44 form? Progressive. (2022).
Total Loss Threshold by State. Total Loss Appraisals. (2022).