Auto Insurance Definitions
Auto Insurance Definitions
Understanding key auto insurance terms can help you choose coverage with confidence. Click a term below to jump to its definition.
Bodily Injury Liability
Covers injuries to other people when you are at fault in an auto accident, including medical bills, lost wages, and pain and suffering. Required by law in California.
Collision
Pays to repair or replace your vehicle if it’s damaged in a collision with another vehicle or object, regardless of fault. Subject to your collision deductible.
Collision Deductible Waiver (CDW)
Waives your collision deductible if you’re hit by an identified, uninsured at-fault driver. It applies only when the at-fault driver is confirmed and uninsured, not for hit-and-runs unless the driver is later identified.
Comprehensive
Covers non-collision losses such as theft, vandalism, fire, hail, falling objects, or glass damage. Subject to your comprehensive deductible.
Loan/Lease Gap Coverage
If your car is totaled, gap coverage pays the difference between what you owe and your car’s actual cash value. Helpful if your loan balance exceeds market value.
Medical Payments
Helps pay medical expenses for you and your passengers after an accident, regardless of fault. Can supplement your health insurance or fill gaps if you have a high deductible.
Original Equipment Manufacturer (OEM) Coverage
Allows repairs using original manufacturer parts rather than aftermarket parts after a covered loss. Often limited to newer vehicles or specific carriers.
Property Damage Liability
Covers damage you cause to others’ property (vehicles, buildings, fences, etc.) when you’re at fault in an accident.
Rental Car Reimbursement
Pays for a rental car (up to your daily and total limits) while your vehicle is being repaired from a covered claim. Available only with comprehensive and collision coverage.
Roadside Assistance & Towing
Add-on coverage that helps with towing, flat tires, battery jumps, lockouts, and fuel delivery. Check your towing distance limit (e.g., basic 15 miles vs. extended 100 miles).
Uninsured / Underinsured Motorist Coverage
Protects you if you’re hit by a driver who has no insurance or not enough insurance. Covers injuries to you and your passengers, and in some cases vehicle damage if the at-fault driver is uninsured.
