Quote Vocabulary, Defined

Comparison gets harder when two documents use different words for the same thing, or the same word for different things. These are the terms that come up most often when California drivers put quotes side by side.

The document

Quote. A carrier's price for a specific configuration of vehicles, drivers and coverages, based on the information supplied and subject to verification.

The statewide version of this topic — the auto insurance glossary — is kept up to date as the law changes.

Binder. Temporary evidence that coverage is in force before the full policy documents are issued. A binder is coverage; a quote is not.

Declarations page. The summary page of an issued policy listing who and what is covered, at what limits, for what premium. The single most useful document for comparing.

Endorsement. An addition or change to the standard policy form.

Effective date. The date coverage starts. Quotes are built for a specific one, and changing it can change the quote.

Term. The period the policy covers — commonly six or twelve months. Always convert to an annual figure before comparing.

The money

Premium. The cost of the policy for the term.

Down payment. What is due at the start. Varies widely between carriers for the same premium.

Installment fee. A per-payment charge some carriers apply. Small individually, visible across a term.

Unearned premium. The portion covering a period you have not yet used — what gets refunded if you cancel mid-term.

Short rate. A cancellation calculation that returns less than a straight pro-rata share. Ask whether your policy uses it.

Surcharge. An increase applied for a violation or at-fault claim, for a period set by the carrier's filed plan.

The coverage

Liability. Pays for injury and damage you cause to others. Written in California as split limits — per injured person, per accident, and property damage. Insurance Code section 11580.1b sets the minimum at 30,000 / 60,000 / 15,000.

Comprehensive. Damage to your vehicle from something other than a collision — theft, weather, fire, animal strikes, glass.

Collision. Damage to your vehicle from a collision, regardless of fault.

Deductible. The amount subtracted from a comprehensive or collision payment. Set per vehicle, applies per claim.

Uninsured and underinsured motorist. Covers you when the at-fault driver has no insurance or not enough. Must be offered in California, and a rejection must be in writing.

Medical payments. Pays medical costs for you and your passengers regardless of fault, up to the limit chosen.

Exclusion. A situation the policy does not cover. Also, a named driver exclusion, which formally removes a person from coverage.

The carrier

Underwriting company. The legal entity that issues the policy — often one of several inside a group, and the name to use when checking a financial strength rating.

Rating plan. The filed methodology a carrier uses to turn your details into a premium. Approved by the California Department of Insurance and applied as written.

Tier. A grouping within a carrier's programme that determines which set of rates applies to you.

Underwriting. The decision about whether to accept the risk at all, as distinct from rating, which is the price.

Appetite. The kinds of business a carrier currently wants. Not published, but visible in who quotes you well and who declines.

Using it

When two quotes seem to disagree, the fastest resolution is usually vocabulary: check that both documents mean the same thing by the same word, especially "full coverage", which is a conversational phrase rather than a defined product and means whatever the person saying it assumes. Ask us to translate any line on a quote you have been given — we would rather explain it than have you compare two documents that are not describing the same policy.