To help you understand your auto policy, here are some commonly used automobile insurance terms:

• Actual Cash Value (ACV): This commonly means "fair market value," unless it is otherwise defined in your policy. It is the dollar amount that a consumer is willing to pay and a seller is willing to accept.
• Additional Equipment Endorsement: This may provide additional coverage for aftermarket equipment (accessories not installed by the manufacturer).
• Adjustor: The person employed by the insurance company who assesses the value of damage caused by an accident and estimates how much should be paid out by the insurance company.
• Agent: A person authorized to sell and service insurance policies for a particular insurance company.
• Assigned Risk: An Assigned Risk Pool is a group of insurance companies willing to accept drivers with poor driving records. The "Assigned Risk" is the person who is seeking insurance but has been declined by the majority of standard insurance companies due to a poor driving record.
• Binder: A short-term agreement that provides temporary insurance coverage until the policy can be issued or delivered.
• Broker: A person or organization licensed to sell and service insurance policies for one or more insurance companies.
• Broker-Agent: A licensed individual who can act as an agent representing one or more insurance companies and also as a broker dealing with one or more insurance companies representing your interests.
• Comparative Negligence: The percentage of fault each driver in an accident shares when both contribute to causing the accident.
• Comprehensive Coverage: Pays for damage caused to your car by some other reason than collision (i.e. fire, theft, vandalism, flood, etc.)
• Deductible: The amount of loss the policyholder must pay before policy benefits will be paid out (applies to comprehensive or collision coverage only).
• Endorsement: A written agreement to add or subtract coverage, essentially changing the terms of an insurance policy.
• Limits: The highest amount the insurance company will pay for a claim of loss against your policy.
• Loan Gap Coverage: Pays the difference between the fair market value of your vehicle and the loan balance owed to your auto lender (available only for new vehicles).
• Premium: The price paid for an insurance policy.
• Producer: Term of reference for agents and brokers, used by the insurance industry.
  
• Recision: Cancellation of a policy back to its effective date that results in a return of all premium paid.
• Rental Reimbursement Coverage: Pays expenses to rent an automobile in the event of a loss under Comprehensive or Collision benefits.
  
• Replacement Cost: The amount of cost to replace lost or damaged property with new or like kind property of similar quality in the local market.
• Salvage: Damaged policyholder property legally signed over to an insurer as part of a loss settlement that may be sold by the insurance company to reduce their overall loss.
• Subrogation: The process of recovering the amount of claims damages paid out to a policyholder from the legally liable party.
• Surcharge: An extra charge applied to the premium by an insurance company, typically for at-fault accidents or moving violations.
• Total Loss: Property damage to the extent that it cannot be repaired to its prior condition or when the cost to repair or rebuild in comparison is higher than value of the property prior to the loss.
• Towing Coverage: Addition to an auto policy that pays a specified amount for tow service.
• Underinsured Motorist Endorsement: Addition to a Personal Auto Policy (PAP) that covers an insured who is involved in a collision with a driver who does not have sufficient liability insurance to pay for the damages.

Source: California Department of Insurance