6 Tricky Insurance Terms Defined

Woman reading book in libraryA party of one? A drive-in with no movies? Welcome to the world of insurance language. Here are six sometimes-confusing terms and what they really mean:


No, not the three-ring kind from high school. This binder is a temporary agreement declaring that your policy is in effect until a formal policy can be issued.


No movies here. This drive-in is a GEICO office where claimants can bring their vehicle for a damage inspection and estimate. Click here to find out how GEICO Auto Repair Xpress® makes your life easier.

First Party

Don’t bust out the dance moves just yet! A first party is the technical term for any person or organization covered by insurance.


An underwater vacation? Not even close. Subrogation describes the process of recovering money for a claim paid but for which the insured wasn’t at fault.


Not quite as delicious as the French dessert, a tort describes any wrong or injury done to a person for which someone else may be liable. Now if only it came with a slice of torte.

Umbrella Insurance

This insurance won’t keep you dry in the rain, but it can cover you above your existing homeowners, auto or boat policy. Learn more about GEICO Umbrella insurance here.

Want more definitions? Visit geico.com for our complete insurance glossary.

Have you bought a new car recently? Tell us about it below.

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  1. Sandi Feller says

    I’m planning to rent a home with my son & put some items in storage. Do we get 2 separate policies?

  2. Raylin Sutter says

    I really appreciate how clear this post is with the terminology of words such as ‘subrogation’ and ‘tort’. I am planning on getting my first car and insurance for it in April. However, right now I am in the process of just trying to figure everything out and prepare for it. What should I do if I don’t fully understand the way that terms are used in the binder or other written parts of the agreement?

  3. Deanna R. Jones says

    Thanks for the tips! I’m looking through some of the paperwork for different types of insurance, and there are several terms that are difficult to understand. I’ve seen subrogation, so knowing that it’s defined as the process of covering someone who filed a claim for an accident they weren’t responsible for. Tort was also tricky to understand, so now that I know that it’s the injury that the other party is responsible for in an accident. Now that I’m more familiar with these terms, I’ll actually be able to understand what insurers are talking about.

  4. Virginia Davis says

    Thanks for the information. Trying to figure out auto insurance has always stressed me out. Understanding some of the insurance terms will really help me to know what what is going on. As I figure out what kind of insurance is best for me, I will be sure to remember what these terms mean.