Insurance Glossary · QualitySpace

AB60: California Assembly Bill 60, codified at Vehicle Code §12801.9. Allows California residents to obtain a driver license without proving legal presence. The card reads “Federal Limits Apply” on the front. AB60 is valid for driving, vehicle registration, and buying insurance. It is not valid for TSA, federal buildings, or REAL ID. More: AB60 page.
Coverage A (Dwelling): On a homeowners policy, Coverage A is the dollar amount the carrier will pay to rebuild the structure of your home after a covered loss. It should equal rebuild cost (materials plus labor plus demolition), not market value or what you paid for the house. For most OC homes in 2026, rebuild runs roughly $300 to $500 per square foot.
Coverage C (Personal Property): On a homeowners policy, Coverage C is the amount available to replace your belongings (furniture, electronics, clothing, kitchen contents) after a covered loss. Usually 50 to 70% of Coverage A. Standard policies cap jewelry, art, and firearms at low limits. Schedule those items separately if their value exceeds the cap.
Coverage E (Liability): On a homeowners policy, Coverage E pays for bodily injury or property damage to others for which you're legally responsible. Standard limits are $100,000 to $300,000. We recommend at least $300,000, and adding a $1 million umbrella for households with any real assets.
CSR (Cost-Sharing Reductions): On Covered California Silver-tier health plans, CSR is an extra discount on deductibles and out-of-pocket costs for households below ~250% of federal poverty level. It only applies to Silver plans. One reason Silver is the math winner for moderate-income households on the ACA marketplace.
Deductible: The amount you pay out of pocket before the insurance carrier starts paying. Higher deductible means lower premium and vice versa. Standard auto comprehensive and collision deductibles are $500 to $1,000. Standard home deductibles are 1% of dwelling coverage. Health plan deductibles vary widely by tier.
FAIR Plan (California): The California Fair Access to Insurance Requirements Plan. The state's carrier of last resort for homeowners insurance when no admitted carrier accepts the property (usually due to wildfire risk). FAIR Plan covers fire-only; pair it with a difference-in-conditions (DIC) wraparound policy from a separate carrier to fill the gap. More: homeowners page.
Garaging address: The address where your vehicle is parked overnight, not your mailing address. Carriers use the garaging address (ZIP code specifically) to rate your auto premium. Telling the carrier the wrong garaging address can void the policy at claim time.
ITIN (Individual Taxpayer Identification Number): IRS-issued tax ID number for people not eligible for SSN but with U.S. tax obligations. Obtained via Form W-7. Most non-standard auto carriers in California (Bristol West, Aspire General, Kemper) accept ITIN as the tax-ID on file when underwriting AB60 drivers.
Liability (split limits like 30/60/15): On an auto policy, the three numbers are: bodily injury per person, bodily injury per accident, property damage per accident, all in thousands. So 30/60/15 means $30,000 per person, $60,000 per accident, $15,000 property damage. This is California's minimum as of January 1, 2025 under SB 1107. Most households should carry higher (100/300/100 is a common upgrade).
MAGI (Modified Adjusted Gross Income): The income figure Covered California uses to calculate premium tax credit (subsidy) eligibility. For most households it's your tax return adjusted gross income plus tax-exempt interest. Report changes within 30 days to keep subsidies accurate.
MedPay (Medical Payments): Auto insurance coverage that pays your medical bills after an accident regardless of fault. Typically $5,000 to $10,000. Cheap (around $5 to $10 a month) and covers deductibles and gaps before health insurance kicks in. We default to including it.
Named-driver exclusion: A formal exclusion on an auto policy that removes coverage for a specific household member when they drive a particular vehicle. Used when one household member shouldn't be insured (poor record, age) but other household members need full coverage. Allowed by Mercury and Bristol West in California. Common in Vietnamese-American multi-generational households.
Non-owner SR-22: An SR-22 policy for drivers who do not own a vehicle. Provides liability coverage when you drive someone else's car or a rental, and satisfies the DMV 3-year filing requirement. Cheaper than an owned-vehicle SR-22 policy. More: non-owner SR-22 page.
Order to Comply: Form issued by California DMV requiring you to file SR-22 (or a similar financial responsibility certification) to restore or keep your driving privileges. Usually issued after DUI conviction, no-insurance accident, or excessive point accumulation. Bring it to any SR-22 quote conversation.
Proposition 103 (California): California Insurance Code provision capping how insurers can rate auto policies. The three mandatory rating factors are: driving record, years of experience, and annual mileage. Credit history is not a permitted auto rating factor in California at all (10 CCR §2632.5) - the state bans the use of credit score in auto rating. ZIP, vehicle, and other optional factors can be used but weight is limited.
SR-22: A Certificate of Financial Responsibility filed electronically by your insurance carrier with California DMV proving you carry at least the state-minimum liability. Required for 3 continuous years after DUI, no-insurance accident, or DMV Order to Comply. Most standard carriers won't file SR-22; you need a non-standard specialist. More: SR-22 page.
SR-26: The form your insurance carrier sends to California DMV when an SR-22 policy is canceled or expires. Triggers DMV to potentially suspend your license again and reset the 3-year SR-22 clock. The reason you never let an SR-22 policy lapse.
TNC endorsement: Transportation Network Company endorsement. An add-on to your personal auto policy covering the gap when you have a rideshare app on (Uber, Lyft) but no passenger. Without it, your personal carrier could deny a claim during the “available for hire” window. Mercury, State Farm, Farmers, Allstate, Progressive, and USAA write rideshare endorsements in California. More: commercial auto page.
UM/UIM (Uninsured/Underinsured Motorist): Auto coverage that pays your medical bills and lost wages when the at-fault driver has no insurance or not enough. Per the Insurance Research Council (IRC) 2017-2023 study, roughly one in five California drivers is uninsured. We default to UM/UIM limits matching your liability limits (100/300 UM if you carry 100/300 liability).
Premium: The amount you pay for the insurance policy, usually billed monthly, semi-annually, or annually. Paid-in-full annual payment typically saves 5 to 10% vs. monthly installments because the carrier avoids billing costs. Premium is distinct from out-of-pocket costs (deductible, copay) which you pay only when you use the coverage.
Declarations page (dec page): The summary page at the front of every insurance policy showing the named insureds, coverage limits, deductibles, premium, and policy period. The first thing your broker will ask to see at intake. Always read it line by line at renewal because carriers sometimes change defaults silently between policy terms.
Comprehensive coverage: Auto coverage for non-collision damage to your vehicle: theft, vandalism, fire, hail, flood, falling objects, animal collision. Pays out minus your deductible. Optional on most policies but typically required by your lender if your vehicle is financed. Standard deductible is $500 to $1,000.
Collision coverage: Auto coverage that pays to repair your vehicle after a collision with another vehicle or object, regardless of fault. Pays out minus your deductible. Also optional on most policies but typically required if your vehicle is financed. Pair with comprehensive for full coverage.
Replacement cost vs. actual cash value: On homeowners and renters, two ways the carrier calculates payout. Replacement cost pays what it costs to buy a new equivalent today. Actual cash value pays the depreciated value. Replacement cost typically adds 10 to 20% to premium and is worth it for any household with substantial belongings.
Umbrella policy: A standalone liability policy that sits on top of your auto and home liability limits, adding $1 million to $5 million of additional coverage. Cheap ($200 to $500/year for $1 million) and one of the highest-ROI insurance purchases for households with assets above $250,000.
Endorsement: An amendment to an insurance policy that adds, removes, or modifies coverage. Common examples: scheduled-property endorsement (covers high-value jewelry above the policy sub-limit), water-backup endorsement, business-use endorsement on auto, in-home business endorsement on homeowners.
Binder: Temporary proof of insurance issued at the moment you bind a policy, before the full policy documents are issued. Lenders, dealers, and DMV accept a binder. The binder usually expires within 30 to 60 days; the full policy supersedes it.
Lapse: A gap in continuous insurance coverage, even a single day. Lapses hurt your future premium (most carriers re-rate you as a higher-risk driver after a lapse) and can reset the SR-22 3-year clock if you have an active SR-22 obligation. Set up auto-pay to avoid lapses.
Subrogation: After your carrier pays your claim, they may pursue the at-fault party (or that party's insurance) to recover what they paid. You usually do not see this happen, but if you receive a subrogation letter from your carrier asking for cooperation, respond promptly.

Reviewed by Kevin Vu, CA DOI #4037122 · Last updated 2026-05-21