Reference
Glossary Of Motor Claims Terms.
Standard industry vocabulary, defined plainly. Included because the language of claims is a barrier to people who work adjacent to it, and because much of the analysis elsewhere on this site assumes it.
- Accident Benefits
- Coverage paying for medical treatment, rehabilitation and income replacement regardless of fault. The structure varies significantly by province in Canada.
- Actual Cash Value (ACV)
- The value of a vehicle immediately before the loss, generally replacement cost less depreciation. The basis on which most total losses are settled.
- ADAS
- Advanced driver assistance systems. Camera, radar, lidar and ultrasonic systems supporting functions such as automatic emergency braking, lane keeping and blind-spot monitoring.
- Aftermarket Parts
- Replacement parts produced by a manufacturer other than the vehicle's original equipment manufacturer.
- APRA
- Australian Prudential Regulation Authority. Prudential supervisor of Australian insurers.
- Appraisal / Estimate
- The documented assessment of the damage and the cost to repair it, prepared by a staff appraiser, an independent appraiser or a repairer.
- ASIC
- Australian Securities and Investments Commission. Conduct regulator for Australian financial services, including insurance.
- Betterment
- An adjustment reflecting that a repair has left the vehicle in better condition than before the loss, typically applied to wear items.
- Bodily Injury (BI)
- The liability coverage responding to injury caused to another party. The fastest-growing severity component in motor claims.
- Calibration
- The procedure restoring an ADAS sensor to manufacturer tolerance after repair or replacement. Static calibration uses targets in a controlled space; dynamic calibration requires driving the vehicle under specified conditions.
- Combined Ratio
- Losses plus expenses divided by earned premium. Above 100% indicates an underwriting loss.
- Consumer Duty
- A United Kingdom Financial Conduct Authority standard requiring firms to deliver good outcomes for retail customers, applying to claims handling among other activities.
- Credit Hire
- A replacement vehicle provided to a not-at-fault driver by a third-party firm which then recovers the cost from the at-fault driver's insurer, often at rates above standard rental.
- Cycle Time
- Elapsed time through a defined stage of the claim. Keys-to-keys measures from the customer surrendering the vehicle to its return.
- Deductible
- The amount the policyholder bears before coverage responds. Rising deductibles change which losses are reported at all.
- Delta-V
- The change in velocity during a collision, used as a proxy for crash energy and therefore for the plausibility of a claimed injury.
- Direct Repair Program (DRP)
- A network of repairers contracted to an insurer on agreed terms, in exchange for referred volume.
- EIOPA
- European Insurance and Occupational Pensions Authority. The European Union's insurance supervisory authority.
- Équité Association
- The Canadian not-for-profit serving property and casualty insurers on insurance crime, fraud prevention and vehicle recovery.
- EU AI Act
- The European Union's Artificial Intelligence Act, in force since August 2024 and applying in stages, classifying AI systems by risk and imposing obligations accordingly.
- FCA
- Financial Conduct Authority. Conduct regulator for United Kingdom financial services, including insurance.
- First Notice Of Loss (FNOL)
- The point at which a loss is first reported to the insurer. The formal start of the claim, which is not the same moment as the loss.
- Frequency
- How often claims occur, usually expressed per unit of exposure. Paired with severity to explain loss cost.
- FSRA
- Financial Services Regulatory Authority of Ontario. Regulator of Ontario's insurance market.
- GDPR
- The European Union's General Data Protection Regulation, and in the United Kingdom the UK GDPR alongside the Data Protection Act 2018.
- Ghost Broker
- A fraudster selling fake, altered or fraudulently obtained insurance policies to consumers who believe they are insured.
- GISA
- General Insurance Statistical Agency. Collects and publishes statistical data for Canadian insurance regulators.
- IBC
- Insurance Bureau of Canada, the national association representing private home, auto and business insurers.
- ICA
- Insurance Council of Australia, the representative body of the Australian general insurance industry.
- Indemnity
- The payment that puts the insured back in their pre-loss position. Distinct from the expense of handling the claim.
- Length Of Rental (LOR)
- The number of days a replacement vehicle is supplied. A daily-accruing cost tied directly to repair duration.
- Loss Adjustment Expense (LAE)
- The cost of investigating, handling and settling claims, separate from indemnity. Rises with the number of human touches on a file.
- Loss Ratio
- Incurred losses divided by earned premium.
- NAIC
- National Association of Insurance Commissioners. United States standard-setting body whose model laws and bulletins states adopt in varying forms.
- Nuclear Verdict
- A jury award of exceptional size, commonly defined as $10 million or more, and a significant driver of liability severity in the United States.
- OEM Parts
- Parts supplied by the vehicle's original equipment manufacturer.
- OSFI
- Office of the Superintendent of Financial Institutions. Prudential regulator of federally regulated Canadian financial institutions, including insurers.
- PIPEDA
- Personal Information Protection and Electronic Documents Act. Canada's federal private-sector privacy statute.
- Proxy Discrimination
- A disparate outcome produced by variables correlated with a protected characteristic, without that characteristic being used as an input.
- Quebec Law 25
- Quebec's modernised private-sector privacy regime, phased in between 2022 and 2024, including rights in respect of automated decision-making.
- Recycled Parts
- Serviceable parts recovered from salvage vehicles, also called LKQ (like kind and quality) parts.
- Re-VINing
- Disguising a stolen vehicle by attaching the vehicle identification number of a legitimately owned one, allowing it to be registered and resold.
- Salvage
- The residual value of a total-loss vehicle, recovered by the insurer through sale after settlement.
- Severity
- The average cost of a claim. Distinct from frequency, and currently the dominant pressure in motor lines.
- Social Inflation
- Growth in liability costs beyond general economic inflation, attributed to litigation funding, changing jury behaviour and larger settlements.
- Solvency II
- The European Union's prudential regime for insurers, with a corresponding Solvency UK framework in the United Kingdom.
- Special Investigation Unit (SIU)
- The insurer function responsible for investigating suspected fraudulent claims.
- Staged Collision
- A deliberately caused or wholly fabricated collision engineered to support fraudulent claims, often involving multiple coordinated participants.
- Storage
- Daily charges accrued by a vehicle held at a yard or impound facility pending inspection, authorisation or disposal.
- Subrogation
- The insurer's right, after paying its insured, to recover from the party responsible for the loss.
- Supplement
- An addition to an original estimate once further damage or additional required operations are identified, usually after teardown.
- Third-Party Liability
- Coverage responding to injury or damage the insured causes to others.
- Total Cost Of Repair (TCOR)
- The full appraised cost of a repairable claim, including parts, labour, materials and associated operations.
- Total Loss
- A claim where repair is uneconomic or the vehicle is unrepairable, settled on value rather than repaired. Also called a write-off.
- Total Loss Threshold
- The point, set by insurer policy or by statute depending on jurisdiction, at which repair cost relative to vehicle value triggers a write-off.
- UM / UIM
- Uninsured and underinsured motorist coverage, responding where the at-fault party has no or insufficient insurance.
- Vehicle Finance Fraud
- Obtaining a vehicle through finance or lease using stolen or synthetic identity details, with no intention of repayment.