Insurance Terms Made Simple
Deductible
The amount you agree to pay out of your own pocket toward a covered claim before your insurance helps pay the rest. Common choices are $250, $500, or $1,000. Higher deductibles usually mean lower premiums.
Rental Reimbursement
An optional coverage that helps pay for a rental car if your vehicle cannot be driven due to a covered claim, such as an accident.
Roadside Assistance
A service you can add to your policy that helps you if your vehicle breaks down, needs a jump start, runs out of fuel, gets a flat tire, or you’re locked out.
State Minimum Coverage
The least amount of insurance you must have by law to drive in California. This typically means basic liability coverage but does not include extras like comprehensive or collision. The minimum may not provide full financial protection.
Towing
A benefit that pays for your vehicle to be towed to the nearest repair shop if it can’t be driven after a breakdown or accident.
Endorsement
A change or addition made to your insurance policy that updates or customizes your coverage. Common examples include adding another car or driver.
Declarations Page
The summary page at the front of your insurance policy. It lists who is covered, the types and amounts of coverage, policy dates, your premium, and details about the insured vehicle or property.
Insurance Contract
The full legal agreement between you (the insured) and your insurance company (the insurer), outlining what is and isn’t covered.
Liability Coverage
Insurance that helps pay for injuries or property damage to others if you are legally responsible for an accident.