Abbreviations for Insurance

Insurance is an essential part of our lives to protect us from various financial losses. It is a contract between the insured and the insurer, where the insurer promises to pay a specific sum of money on the occurrence of a certain event. Like any other industry, insurance has its own set of jargons and abbreviations that can be confusing for many. To make it easier for you, we have compiled a list of commonly used insurance abbreviations and their meanings in this journal article.

Common Abbreviations Used in Insurance Policies

Insurance policies can be lengthy and confusing, especially when they are loaded with abbreviations. Here are some of the most commonly used abbreviations in insurance policies:

Abbreviation	Meaning
ACV	Actual Cash Value
BI	Bodily Injury
COLL	Collision Coverage
COMP	Comprehensive Coverage
PIP	Personal Injury Protection
UIM	Underinsured Motorist Coverage
UM	Uninsured Motorist Coverage
AP	Agent’s Policy
BID	Brokerage Insurance Declaration
COC	Certificate of Coverage

It is important to understand these abbreviations to comprehend the terms and conditions of your insurance policy.

What is ACV?

ACV stands for Actual Cash Value. It is the amount that would be required to replace or repair an asset in case of damage or loss. It is the market value of the asset at the time of the loss.

For example, if your car is damaged in an accident, the insurance company will assess the ACV of the car and pay you the amount required to repair or replace it.

What is BI?

BI stands for Bodily Injury. It refers to the injury or damage caused to the body of a person due to an accident or a mishap.

For instance, if you hit someone with your car, and they sustain an injury, your insurance policy will cover the medical expenses of the injured person.

What is COLL?

COLL stands for Collision Coverage. It is the insurance coverage that pays for the damages caused to your car due to a collision with another vehicle or object.

For example, if you collide with another car or hit a tree, the damages to your car will be covered under the Collision Coverage.

What is COMP?

COMP stands for Comprehensive Coverage. This coverage pays for the damages caused to your car due to reasons other than a collision, such as fire, theft, or vandalism.

For example, if your car is stolen or if it catches fire, the damages will be covered under the Comprehensive Coverage.

What is PIP?

PIP stands for Personal Injury Protection. It is a coverage that pays for the medical expenses of the insured and their passengers in case of an accident, regardless of who is at fault.

For instance, if you and your passengers sustain injuries in a car accident, the insurance company will cover the medical expenses under the PIP coverage.

What is UIM?

UIM stands for Underinsured Motorist Coverage. It is a coverage that pays for the damages caused to the insured and their passengers in case of an accident with an underinsured driver.

For example, if you are in an accident with an underinsured driver, and their insurance policy is not enough to cover the damages, your insurance company will cover the rest under the UIM coverage.

What is UM?

UM stands for Uninsured Motorist Coverage. It is a coverage that pays for the damages caused to the insured and their passengers in case of an accident with an uninsured driver.

For instance, if you are in an accident with an uninsured driver, and they do not have the financial means to pay for the damages, your insurance company will cover the damages under the UM coverage.

Common Abbreviations Used in Insurance Industry

In addition to abbreviations used in insurance policies, there are some common abbreviations used in the insurance industry that you should be aware of:

Abbreviation	Meaning
ICO	Insurance Company Officer
ALAE	Allocated Loss Adjustment Expense
IBNR	Incurral Born but not Reported
LDW	Loss Damage Waiver
NOC	Non-Own Coverage
OSHA	Occupational Safety and Health Administration
PEC	Personal Effects Coverage
QC	Quality Control
ROR	Rate on Return
TPA	Third Party Administrator

Understanding these abbreviations can help you communicate with insurance professionals easily.

What is ALAE?

ALAE stands for Allocated Loss Adjustment Expense. It refers to the expenses related to the investigation, management, and settlement of an insurance claim.

For example, if you file a claim for damages to your car, the insurance company will investigate the claim, communicate with repair shops, and manage the settlement. These expenses come under the ALAE.

What is IBNR?

IBNR stands for Incurral Born but not Reported. It refers to the losses that have occurred but have not yet been reported to the insurance company.

For instance, if someone sustains an injury due to a car accident, but they do not report it to the insurance company immediately, it will come under IBNR losses.

What is LDW?

LDW stands for Loss Damage Waiver. It is a type of insurance that protects you from financial loss in case your rental car is damaged or stolen.

For example, if you rent a car, and it gets stolen or damaged, the LDW will cover the damages or the value of the car.

What is NOC?

NOC stands for Non-Own Coverage. It is the insurance coverage that provides liability and damages protection to an individual who is driving a vehicle that they do not own.

For example, if you borrow a friend’s car and get into an accident, your insurance policy will cover the damages under the NOC coverage.

Conclusion

The insurance industry is filled with jargons and abbreviations that can be confusing for many. Understanding these abbreviations is crucial to comprehend the terms and conditions of an insurance policy and communicate with insurance professionals easily. This journal article provided you with a list of commonly used abbreviations in insurance policies and the insurance industry, along with their meanings. We hope this article was helpful to you in understanding the common abbreviations used in the insurance industry.