Vocabulary
Glossary
Definitions written for parents adding a 16- or 17-year-old to a family policy, and teens learning how insurance works. Each term links back to the guides where it matters.
- Accident forgiveness
- A feature preventing a first at-fault accident from raising the rate; must be on the policy before the crash.
- Age band
- An age grouping with its own factor. Highest at 16–17; falls at 19, 21 and 25.
- At-fault accident
- A crash the insurer determines the driver caused. Surcharged; not-at-fault accidents usually are not.
- Collision coverage
- Repairs your own car after a crash, minus the deductible.
- Comprehensive coverage
- Theft, weather, vandalism, fire, animal strikes, glass.
- Deductible
- What you pay before collision or comprehensive pays. $1,000 is the usual choice when a teen is added.
- Distant student discount
- A discount for a student 100+ miles from home without a car.
- Good student discount
- Typically 5–25% for full-time students under 25 with about a B average.
- Graduated driver licensing (GDL)
- The staged system—permit, intermediate, full—by which states license new drivers, with night and passenger restrictions at the intermediate stage.
- Household member
- A person living at the insured address. Licensed household members must be listed on or excluded from the policy.
- Intermediate (provisional) licence
- The GDL stage allowing unsupervised driving with restrictions. The teen must be added to the policy at this stage.
- Liability limits
- The maximum the policy pays for injuries and damage caused to others, e.g. 100/300/100 in thousands.
- Named-driver exclusion
- A policy endorsement removing a specific household member from rating and from coverage. No coverage applies if the excluded person drives.
- Permissive use
- Coverage for an unlisted driver using your car with permission. Does not extend to household members who drive regularly—they must be listed.
- Premium
- The price of a policy, per six or twelve months.
- Principal operator
- The driver an insurer assigns to a vehicle for rating—usually the one who drives it most.
- Surcharge
- A percentage added for an at-fault accident or violation, typically for three years.
- Telematics (usage-based insurance)
- Pricing based partly on measured driving via an app or device. Teen programmes often include parental reporting.
- Umbrella policy
- Extra liability coverage of $1 million or more above auto and home limits. Commonly added when a teen is licensed.
- Uninsured/underinsured motorist coverage
- Pays for your family's injuries when the at-fault driver has no or too little insurance.
- Vehicle rating symbol
- A number assigned to each make/model/year from claims data, driving collision and comprehensive premiums.
- Youthful operator
- An insurer's term for a driver under about 25, rated with a youth factor in addition to any inexperience factor.