Insurance Legal Terms
Insurance terminology and claims concepts including coverage types, policy limits, bad faith, and the claims process in personal injury cases.
24 terms in this category
Bad Faith Insurance
When an insurance company unreasonably denies, delays, or underpays a valid claim, or fails to properly investigate or defend its insured.
Bodily Injury Liability
Auto insurance coverage that pays for injuries you cause to others in an accident, including medical expenses, lost wages, and pain and suffering.
Claims Adjuster
An insurance company employee or contractor who investigates claims, determines coverage, and evaluates damages to recommend settlement amounts.
Coverage Denial
When an insurance company refuses to pay a claim, asserting that the loss is not covered under the policy terms or that the policy was not in effect.
First-Party Claim
An insurance claim filed by a policyholder against their own insurance company for losses covered under their policy.
Gap Insurance
Insurance coverage that pays the difference between a vehicle's actual cash value and the outstanding balance on the owner's auto loan or lease if the vehicle is totaled.
Independent Adjuster
A claims adjuster who is not employed by any single insurance company but is hired on a contract basis to investigate and evaluate claims.
Insurance Bad Faith
An insurance company's unreasonable denial, delay, or underpayment of a legitimate insurance claim in violation of its duty of good faith and fair dealing.
Lien
A legal claim against a settlement or judgment that must be paid before the injured party receives their money, typically held by medical providers or insurers.
Loss of Use
Compensation for the inability to use damaged property, such as a vehicle, during the time it is being repaired or replaced after an accident.
Medical Payments Coverage (MedPay)
Optional auto insurance that pays medical expenses for the policyholder and passengers regardless of fault, without the restrictions of PIP coverage.
No-Fault Insurance
An auto insurance system where each driver's own insurance pays for their medical expenses and lost wages regardless of who caused the accident.
Personal Injury Protection (PIP)
No-fault auto insurance coverage that pays medical expenses and lost wages regardless of who caused the accident.
Policy Limits
The maximum amount an insurance company will pay for a covered claim under an insurance policy.
Reservation of Rights
A formal notice from an insurance company informing the policyholder that while they will investigate or defend a claim, they reserve the right to deny coverage or limit their obligations later.
Stacking
The practice of combining coverage limits from multiple insurance policies to increase the total amount of coverage available for a single claim.
Subrogation
The right of an insurance company to pursue a third party who caused the loss to recover the amount paid on a claim.
Third-Party Claim
An insurance claim filed against another person's or entity's insurance policy seeking compensation for damages they caused.
Total Loss
When a vehicle is damaged to the extent that the cost of repairs exceeds the vehicle's actual cash value, or when the vehicle cannot be safely repaired.
Total Loss Threshold
The percentage of a vehicle's actual cash value at which the cost of repair causes the insurance company to declare the vehicle a total loss rather than repairing it.
Umbrella Policy
An excess liability insurance policy that provides additional coverage above and beyond the limits of the policyholder's standard auto, homeowner's, or other liability insurance.
Underinsured Motorist Coverage
Insurance coverage that protects you when the at-fault driver's liability insurance is insufficient to cover the full extent of your damages.
Uninsured Motorist Coverage
Insurance coverage that protects you if you're injured by a driver who has no liability insurance or insufficient coverage to pay for your damages.
Zero Threshold
A policy in some no-fault insurance states that allows injured parties to sue for pain and suffering without meeting a minimum injury requirement. States without threshold requirements provide broader access to the courts.
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