Accident Terms and Definitions

Nonrenewal
The termination of an insurance policy at its normal expiration date.

Salvage
Property taken over by an insurer to reduce its loss.

Uninsured Motorist Coverage (UMC)
Provides coverage for a policyholder involved in a collision with a driver who does not have liability insurance.

Binder
A temporary or preliminary agreement which provides coverage until a policy can be issued/delivered.

Exclusion
A contractual provision in an insurance policy that denies coverage for certain perils, persons, property, or locations.

Limits
The maximum amount of benefits the insurance company agrees to pay in the event of a loss.

Junk Title
A Junk Title is issued on a vehicle damaged to the extent that the cost of repairing the vehicle for safe operation exceeds its fair market value; or a vehicle that has been declared a total loss by an insurer or other state or jurisdiction.

Surcharge
An extra charge applied to the premium by the insurer, usually for at fault accidents or moving violations.

Hearsay
Evidence based on what the witness has heard someone else say, rather than what the witness has personally experienced or observed.

Gap Insurance
Insurance that pays the difference between the actual cash value of a vehicle and the amount still to be paid on the loan. Some gap policies may also cover the amount of the deductible.