Accident Terms and Definitions

Replacement Cost
Replacement cost is the cost of replacing lost or damaged property with new property of like kind and quality, at current market prices.

Gap Insurance
Insurance that pays the difference between the actual cash value of a vehicle and the amount still to be paid on the loan. Some gap policies may also cover the amount of the deductible.

Policy
Written contract of insurance.

Hearsay
Evidence based on what the witness has heard someone else say, rather than what the witness has personally experienced or observed.

Misdemeanor
Criminal offenses less than felonies; generally those punishable by fine or imprisonment of less than 90 days in a local facility. A gross misdemeanor is a criminal offense for which an adult could be sent to jail for up to one year, pay a fine up to $5,000 or both.

Commission
That portion of the premium paid to the agent as compensation for his or her services.

Venue
The specific county, city or geographical area in which a court has jurisdiction

Binder
A temporary or preliminary agreement which provides coverage until a policy can be issued/delivered.

Subrogation
The process in which an insurance company, after paying a loss to its insured, recovers the amount of the loss for damages (plus the insured's deductible) from the legally liable party.

Negligence
The absence of ordinary care.