Auto Insurance Glossary
Actual Cash Value The amount awarded for property damage losses, usually equal to the cost of replacing the damaged item, minus depreciation.

Claim A policyholder's request to recover losses covered by an insurance policy.

Depreciation The decrease in the value of your car or its parts due to age and general wear-and-tear.

Liability Any legally enforceable obligation.

Limits The amount the insurance carrier will pay for a claim. Most states specify the minimum limits you must purchase.

Peril The cause of a loss. Perils include theft, glass breakage, flood, hail and fire.

Premium The amount of money paid for an insurance policy.