What They Don't Teach You in High School

17 Common Terms Actual Cash Value (ACV) —Unless otherwise defined in the policy, actual cash value in California means fair market value. The fair market value of an item is the dollar amount that a knowledgeable buyer (under no unusual pressure) is willing to pay, and a knowledgeable seller (under no pressure) is willing to accept. Adjuster —The person from your insurance company who investigates and evaluates your damage and losses. Agent —An individual or organization licensed to sell and service insurance policies for an insurance company. Binder —A short-term agreement that provides temporary auto coverage until your auto insurance policy starts. Broker —An individual or organization that is licensed to sell and service insurance policies for you. Broker Fee Agreement —The contract between you and your broker. It lists the fees for your broker’s services. Cancellation —When you or your insurance company ends your policy early. They might do this because you did not pay your premium. You might cancel your policy because you no longer own or drive a car. Claim —Your request to an insurance company to cover an accident or other loss. Commission —The fee that an insurance company pays an agent or broker when they sell a policy. Comparative negligence —The percent of responsibility that each driver shares in an accident when both drivers are at fault. Declarations page —Usually the first page of an insurance policy. It lists the full legal name of your insurance company, the amount and types of coverage, the deductibles, and the vehicle(s) insured. Deductible —The amount of the loss that you must pay before your insurance company pays anything. Only comprehensive and collision coverage have deductibles. Endorsement/rider —A written statement that changes the coverage or details of an insurance policy. Exclusion —These are the specific things that your insurance policy does not cover or limits coverage for. For example,