Vocabulary
Glossary
Definitions written for drivers aged 60 and over, and family members helping them, choosing or reviewing auto insurance. Each term links back to the guides where it matters.
- Actual cash value (ACV)
- A car's worth just before a loss. The basis for deciding whether collision is still worth carrying.
- Age band
- An insurer's age grouping with its own rate factor. Lowest in the late fifties and sixties; rising gradually after 70.
- Annual mileage
- Miles driven per year—a rating factor often left at commuting levels after retirement.
- Deductible
- What you pay before collision or comprehensive pays.
- Full coverage
- Liability plus collision and comprehensive.
- Liability limits
- The maximum paid for injuries and damage you cause, e.g. 250/500/100 in thousands. Retirees typically need higher limits to protect assets.
- Low-mileage discount
- A conventional-policy discount, typically 5–15%, for low declared annual mileage.
- Mature driver
- Insurer and state term for drivers roughly 55 and older, used in course-discount rules.
- Mature-driver (defensive-driving) course
- A short approved accident-prevention course for older drivers that earns an insurance discount, typically 5–15% for three years.
- Medical payments coverage (MedPay)
- Pays medical costs for you and passengers after a crash regardless of fault. More valuable as injury severity rises with age.
- Medical review (licensing)
- A state process for evaluating a driver's fitness after a referral, which can result in restrictions, retesting or suspension.
- Pay-per-mile insurance
- A policy priced as a monthly base plus a per-mile charge, measured by device or app. Saves most for drivers under about 7,500 miles a year.
- Premium
- The price of a policy, per six or twelve months.
- Rating factor
- Any characteristic used to set a premium—age, record, mileage, vehicle, territory, coverage.
- Telematics (usage-based insurance)
- Pricing based partly on measured driving—mileage, braking, time of day. Careful daytime drivers score well.
- Umbrella policy
- Extra liability coverage of $1 million or more above auto and home limits.