Actual cash value (ACV) - an amount equivalent to the replacement cost of lost or damaged property at the time of the loss, less depreciation.

Adjuster - a person who investigates and settles losses for an insurance carrier.

Agency - a firm that solicits insurance for one or more insurance carriers. It also may issue policies and adjust losses.

Agent - an insurance salesperson. An agent represents the insurance company, not the consumer. An independent agent usually represents two or more insurers in a sales and service capacity and is paid on a commission basis. An exclusive agent or captive agent represents only one company, usually on a commission basis.

Application - the request for insurance, giving information about the prospective policyholder.

Arbitration - a determination made by impartial experts of the value of a property or the extent of damage. Arbitration is an alternative to litigation of matters in dispute.

Assigned risk plan - the North Dakota Automobile Insurance Plan is a state-supervised insurance plan available to persons who are unable to obtain such insurance coverage in the regular market. Individual policies are assigned to carriers based on the percentage of the market they share. The cost of this insurance is higher than the regular market.


Binder - a temporary insurance contract that provides proof of coverage until you receive a permanent policy. A binder is subject to payment of a premium.

Broker - an insurance salesperson who deals with agents and companies to find insurance for consumers. A broker represents the consumer, not the insurance company.


Cancellation - termination of a policy before its normal expiration date.

Claim - a request for reimbursement for damages on an insured loss. Claims to your company are first-party claims. Claims made by one person against another person's company are known as third-party claims.

Collision coverage - optional insurance that pays for damage to your car caused by a collision with another car or object, or by rolling the car over. It's frequently required if you have a car loan.

Comparative fault - a method of attributing fault to each party who contributed to causing an accident.

Comprehensive physical damage coverage - optional insurance that pays for damage to your auto caused by things other than collision or rolling the car over such as fire, theft, vandalism, flood or hail.

Conditions - part of an insurance policy that states your obligations and those of your insurance company.


Declarations page - the page your company sends as part of the policy which shows the terms, coverage limits, premium and endorsements.

Deductible - the amount you must pay from your own pocket for each claim.


Endorsement - a written or printed form attached to the policy that alters its provisions.

Exclusions - specific situations or circumstances listed in your policy describing when coverage does not exist.


GAP insurance - insurance coverage that pays to the lender the difference between what you owe on your auto loan and your car's actual cash value (ACV) in the event of a theft or total loss.


Insured - the person and things covered by an insurance policy.

Insurer - a company which, in exchange for a fee, called a premium, agrees to pay all legitimate claims that may arise under your policy.


Lapsed policy - a policy that has terminated at renewal for non-payment of premium.

Liability - a legally enforceable financial obligation caused by negligence.

Liability insurance - insurance that pays when you are liable for injuries to other persons or damage to their property.


Negligence - failure to exercise a generally acceptable level of care and caution resulting in injury or damage to a third party.

No-fault insurance - a form of insurance available in many states under which each driver in an accident files claims for losses, such as medical expenses, with their own insurance company regardless of fault. Most states allow the individual to sue the negligent party if the amount of damages exceeds a certain stated limit ($2,500 in North Dakota).

Nonrenewal - when an insurer terminates the contract by electing not to renew the policy at the anniversary date.

North Dakota Insurance Guaranty Fund - a fund that pays an insurer's claims when the company is insolvent. All North Dakota licensed automobile insurance companies belong to the North Dakota Insurance Guaranty Fund.


Occurrence - an event that results in an insured loss.


Policy period - the amount of time an insurance contract or policy provides coverage.

Premium - the amount you pay for insurance.

Pro rata cancellation - revocation of a policy by an insurance company that returns to the policyholder the unearned premium. There is no reduction for expenses already paid by the insurer for that time period.

Proof of loss - documents that you give the insurer to support your request for payment of losses. The company uses the documents to determine whether and how much it will pay. Examples include written repair estimates and police reports.


Short rate cancellation - cancellation by the insured of an insurance policy for which the returned unearned premium is diminished by administration costs incurred when the insurance company places the policy on its books.


Unearned premium - the portion of the premium for the remaining time period that the policy will not be in force.

Underwriter - an individual in an insurance company who determines what insurance risks will be accepted and on what terms.

Uninsured motorist protection - covers the insured and family members if injured by a hit-and-run motorist or a motorist without liability protection, if the other driver is at fault. It does not pay for physical damage to your vehicle.

Unsatisfied judgment fund - a special fund which, subject to several restrictions, pays individuals for bodily injury arising out of the use of a motor vehicle for their damages if the individual obtains a judgment against the responsible party and is unable to collect on that judgment.


Transportation network company (TNC) - a business model that offers prearranged rides or car rentals for a fee, utilizing an online application (app) via a mobile device to connect passengers or automobile renters with drivers/car owners. Examples included Uber and Lyft.