Vocabulary
Glossary
Definitions written for 18-year-old drivers buying or renewing car insurance, and their parents. Each term links back to the guides where it matters.
- Age band
- An insurer's age grouping with its own rate factor. Eighteen sits in a high youth band; factors fall at 19, 21 and 25.
- Binding
- The moment coverage takes effect, usually when the first payment is made and the application accepted.
- Collision coverage
- Repairs your own car after a crash, minus the deductible.
- Comprehensive coverage
- Theft, weather, vandalism, fire, animal strikes, glass.
- Deductible
- What you pay before collision or comprehensive pays. $1,000 is the usual choice for young drivers who can cover it.
- Distant student discount
- A discount for a student at school 100+ miles from home without a car, who drives only during visits.
- Down payment (first installment)
- The amount due at binding on a monthly plan—typically one or two months' premium.
- Full coverage
- Liability plus collision and comprehensive.
- Garaging address
- Where the car is normally kept overnight; determines the rating territory. Changes if a car goes to college.
- Good student discount
- Typically 5–25% for full-time students under 25 with about a B average.
- Household member
- A person living at the insured address. Licensed household members must be listed on or excluded from the policy.
- Inexperienced operator
- A driver licensed fewer than about three years, rated with an additional factor regardless of age.
- Liability limits
- The maximum your policy pays for injuries and damage you cause, e.g. 100/300/100 in thousands.
- Named insured
- The person who owns the policy and signs the contract. At 18 you can be a named insured; some insurers require the vehicle's title holder to be one.
- Non-owner policy
- Liability coverage for a driver without a car, useful for maintaining coverage history.
- Premium
- The price of a policy, per six or twelve months.
- Telematics (usage-based insurance)
- Pricing based partly on measured driving via an app or device. The fastest way for an 18-year-old to prove careful driving.
- Uninsured/underinsured motorist coverage
- Pays for your injuries when the at-fault driver has no or too little insurance.
- Vehicle rating symbol
- A number assigned to each make/model/year from claims data, driving collision and comprehensive premiums.