Car Accident Claim Glossary: Legal Terms in Plain English

General information, not legal advice. Talk to a licensed attorney in your state.

Quick answer

This glossary explains the legal and insurance words you are likely to meet after a car, truck or motorcycle crash, in plain English. Each entry gives a one-line definition, explains why the term matters in a claim, walks through a short example and lists the sources behind it. Where a rule differs by state, the entry says so and gives an example from a named state.

How terms appear across this guide#

You don't need to visit this page to look up a word. Throughout the guides, legal terms are shown with a dotted underline. Tap or click one to open a short note with its definition, in the margin on a wide screen or just below the line on a phone. The note links to the full glossary entry.

If you are new to claims, a few terms come up again and again:

Fault: negligence, comparative negligence and contributory negligence. The fault-rule explainer shows how your state applies them.
Deadlines: the statute of limitations and notice of claim rules for government defendants.
Insurance: first-party and third-party claims, policy limits and the insurance adjuster. The claim process guide puts them in order.
Money: economic and noneconomic damages, liens and subrogation. Our money guides explain how a settlement is divided.
Lawyers: contingency fees and the fee agreement, covered in more depth in choosing a lawyer.

Every term, A to Z#

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Actual cash value: What a car was worth just before the crash: the cost to replace it minus depreciation for age and wear. It is the usual measure of a total-loss payment.
Adjusted basis: For tax purposes, generally what you paid for property, plus improvements, minus certain deductions such as depreciation. It is used to work out whether money for…
Arbitration: A private process in which a neutral arbitrator hears both sides and decides the dispute. Unlike a mediator, an arbitrator makes the decision; whether it is binding…

Bad faith: An insurer's unreasonable refusal or delay in paying a valid claim. Many states allow extra penalties for it.
Barratry: Stirring up lawsuits or soliciting clients illegally, for example by paying people to sign up crash victims for a lawyer. Some states, including Texas, make it a crime.
Blood alcohol concentration: The amount of alcohol in a person's blood, measured in grams per deciliter. A breath or blood test after a crash records it.
Board certification: An optional credential showing that a lawyer met extra experience, testing and education standards in one field of law, set by a state program or an ABA-accredited…
Bodily injury liability: The part of a driver's auto policy that pays for injuries they cause to other people.

Case costs: Out-of-pocket expenses of pursuing a claim, such as filing fees, medical records, expert witnesses and court reporters. They are separate from the lawyer's fee.
Causation: The link between someone's careless act and your injury. You must show the crash caused the harm you are claiming.
Client trust account: A bank account a lawyer must keep separate from the firm's own money. Settlement checks and other client funds go into it until they are paid out.
Closing statement: A written breakdown given at the end of a contingency fee case. It shows the amount recovered, the lawyer's fee, each cost and lien paid, and what the client receives.
Collateral source rule: The rule on whether money you received from other sources, such as health insurance, reduces what the person at fault must pay. States handle it very differently.
Common-fund doctrine: A rule that someone who shares in a recovery, such as a health plan being repaid from your settlement, should pay its fair share of the lawyer's fees and costs that…
Comparative negligence: A rule that splits blame between the people involved and cuts your recovery by your own share of fault.
Complaint: The document that starts a civil lawsuit. It names the parties, describes what happened and says what the person suing asks the court to award.
Conditional payment: A payment Medicare makes for care that another payer, such as a liability insurer, may owe. It must be repaid when a settlement, judgment or award is paid.
Contingency fee: A lawyer's fee paid as a share of what you recover. If there is no recovery, there is usually no fee.
Contributory negligence: An older rule, still used in a few places, under which any fault of your own can bar you from recovering anything.
Cooperation clause: The part of an insurance policy that requires you to help your own insurer investigate, settle or defend a claim, for example by giving statements and documents.
Crash report: The official report an officer writes after investigating a crash, with the drivers, vehicles, witnesses and the officer's notes.

Damages: The money a court can award, or a settlement pays, to make up for losses caused by someone else's wrong.
Demand letter: A letter that lays out the facts, injuries and losses in a claim and asks the insurer to pay a stated amount.
Deposition: Sworn testimony given out of court, in front of a court reporter, during discovery.
Designated record set: The records a health care provider or health plan keeps about you and uses to make decisions, including medical and billing records. Your HIPAA right of access covers…
Diminished value: The drop in a car's market value after it has been damaged and repaired, because buyers often pay less for a car with a crash history.
Discovery: The stage of a lawsuit in which each side must share documents and answer questions under oath.
Disfigurement: A lasting change to how a person looks, such as scarring from burns, wounds or surgery. Some state laws name it as a type of non-economic damages or as a no-fault…
Dooring: A crash in which someone opens a parked car's door into the path of a cyclist or other road user. State laws, such as those in Texas and Florida, forbid opening a door…
Dram shop law: A law that can make a bar or store liable for serving alcohol to someone who then causes a crash.
Duty of care: The legal obligation to act with reasonable care toward others. Every driver owes it to everyone else on the road.

Economic damages: Losses with a receipt or a paycheck behind them: medical bills, lost wages, repairs and other out-of-pocket costs.
Eggshell plaintiff rule: The rule that a person who causes an injury is responsible for all the harm it does, even if the injured person was unusually fragile, for example because of an old…
Examination under oath: Formal questioning of a policyholder by their own insurer, under oath and usually recorded by a court reporter. Many policies allow the insurer to require one before it…
Exemplary damages: Texas's term for punitive damages, awarded only for fraud, malice or gross negligence, and capped by statute.

Fee agreement: The written contract that hires a lawyer. It says what work the lawyer will do, how the fee is worked out and who pays the costs of the case.
Financial responsibility: A state rule that drivers must be able to pay for crash damage they cause, usually shown with an insurance policy or other approved proof. Failing to meet it can cost…
First-party claim: A claim you make to your own insurance company under your own policy, such as a PIP or collision claim.

Gross negligence: Conduct done with conscious or reckless disregard for the rights and safety of others. It is more serious than ordinary carelessness, and in some states it changes…
Guardian ad litem: A person, often a lawyer, whom a court appoints to look after the interests of a child or another person who cannot act for themselves in a particular case, such as a…

HIPAA authorization: A signed form that lets a doctor, hospital or other provider release your health information to someone else, such as an insurer. It must say what is released, to whom…
Hit-and-run: A crash in which a driver leaves without stopping, giving information or helping the injured, as the law requires.

Impairment rating: A doctor's measure, usually a percentage, of the lasting loss of function an injury left once recovery has leveled off. It describes the body, not the value of a claim.
Independent contractor: A worker who runs their own business and controls how the work is done. The respondeat superior rule that applies to employees does not apply to independent contractors.
Independent medical exam: An exam by a doctor chosen by the insurer or the defense. Despite the name, that doctor is not your doctor.
Insurance adjuster: The insurance company employee who investigates a claim, decides what the policy covers and negotiates payment.
Interrogatories: Written questions that one side in a lawsuit sends to the other side, which must be answered in writing and under oath.

Justice court: A Texas court led by a justice of the peace. It hears small civil cases, including small claims, up to a dollar limit set by state law, with simpler procedures than…

Last clear chance: An exception to contributory negligence. An injured person who was partly at fault may still recover if the other party saw, or should have seen, their danger and had…
Lawyer referral service: A service, often run by a state or local bar association, that listens to a caller's problem and refers them to a lawyer on its panel who handles that kind of case.
Legal malpractice: A lawyer's failure to use the skill and care a reasonable lawyer would use, causing the client a loss, such as missing a filing deadline.
Liability: Legal responsibility for harm. The driver who is liable, usually through their insurer, pays the damages.
Liberative prescription: Louisiana's name for a statute of limitations: the period after which a claim can no longer be brought because it was not pursued in time.
Lien: A legal claim on part of your settlement by someone who paid for your care, such as a hospital, health plan or Medicare.
Life care plan: A report, usually prepared by a medical or rehabilitation expert, that lists the care, equipment and services a seriously injured person is expected to need over their…
Loss of consortium: A claim by the spouse (in some states, other close family members) of an injured person for the loss of companionship, care and relationship caused by the injury.
Loss of earning capacity: A lasting reduction in your ability to earn money because of an injury. It looks at what you could have earned, not only at the paychecks you have already missed.
Loss of use: Your loss from being without your car while it is repaired or replaced, often measured by the cost of a comparable rental car for a reasonable time.

Made-whole doctrine: A rule used in many states that an insurer or health plan should not be repaid from your recovery until you have been fully compensated. Policy or plan wording can…
Maximum medical improvement: The point at which doctors expect no further recovery. Claims are often valued once you reach it.
Mediation: A meeting led by a neutral mediator who helps both sides try to reach a settlement. Nothing is decided unless both agree.
Medical payments coverage: Optional or required coverage on your own auto policy that pays medical bills after a crash, up to a set limit, whoever caused it. Unlike PIP, it usually does not pay…
Mitigation of damages: Your duty to take reasonable steps to limit your losses after an injury, such as following medical advice. Losses you could reasonably have avoided may not be…
Modified comparative fault: Comparative negligence with a cut-off: once your share of blame reaches the state's bar (50% or 51%), you recover nothing.

Negligence: Failing to use the care a reasonable person would use in the same situation, such as running a red light or texting while driving.
Negligence per se: Breaking a safety law, such as a traffic or trucking rule, that was meant to prevent the kind of harm that happened. In many states it proves negligence or strongly…
Non-economic damages: Losses without a price tag, such as pain, suffering, emotional distress and loss of enjoyment of life.
Notice of claim: A written notice that must be sent to a city, county or state agency before you can sue it, often within a few months.

Personal injury protection: Coverage under your own policy that pays medical bills and some lost income after a crash, whoever caused it.
Personal representative: The executor named in a will, or an administrator a court appoints, who manages a deceased person's estate. In some states this person files the wrongful death claim.
Phantom vehicle: A vehicle that causes a crash without touching you and then leaves, such as a car that forces you off the road. Some states cover it under uninsured motorist coverage…
Policy limits: The most an insurance policy will pay for one claim or one accident, no matter how large the losses are.
Pre-existing condition: A health problem you had before the crash. You generally cannot claim for the condition itself, but you can claim for the extent to which the crash made it worse.
Preservation letter: A letter asking a person or company to keep specific evidence, such as driving logs, video or vehicle data, because a claim is likely.
Pro hac vice: Latin for "for this occasion." Permission from a court for a lawyer licensed in another state to take part in one specific case. Courts commonly require a local lawyer…
Proportionate responsibility: Texas's name for its comparative-fault system: the jury assigns each party a percentage of responsibility.
Psychotherapist-patient privilege: A rule that keeps what a patient tells a mental-health professional out of court, with exceptions, such as when the patient makes their own mental condition an issue in…
Punitive damages: Extra damages meant to punish very bad conduct, not to repay a loss. Many states cap them; Texas calls them exemplary damages.
Pure comparative fault: The version of comparative negligence that lets you recover something even if you were mostly at fault, reduced by your share.

Quantum meruit: Latin for "as much as he has earned." Payment for the reasonable value of work already done when there is no completed contract to pay under, such as a lawyer…

Recorded statement: An interview, often by phone, that an adjuster records about how the crash happened and how you were hurt.
Release: The document you sign when you settle. It usually ends your right to claim more for the same crash, so read it carefully.
Reservation of rights: A letter in which an insurer says it will keep handling or defending a claim while keeping the right to deny coverage later, for example because of a possible breach of…
Respondeat superior: The rule that makes an employer legally responsible for harm an employee causes while doing the job, that is, within the scope of employment.
Restitution: Money a criminal court orders an offender to pay a victim for losses caused by the crime, such as medical bills or lost pay. It is separate from a civil claim.
Right-of-way: The legal right to go first at a crossing, intersection or lane. Traffic laws say who has it; breaking the rule can be evidence of fault.
Runner (capper): Someone paid to find accident victims and steer them to a particular lawyer, clinic or repair shop. Using runners is illegal in some states, including California and…

Self-funded health plan: An employer health plan that pays claims from the employer's own funds instead of buying an insurance policy. It is governed mainly by federal ERISA law, not state…
Serious injury threshold: A rule in some no-fault states that lets you sue the at-fault driver for pain and suffering only if your injury meets a legal definition of serious, or a dollar level…
Service of process: Formally delivering the summons and complaint to the person being sued, in a way the court's rules allow, so they know about the lawsuit and can respond.
Settlement: An agreement to resolve a claim for an agreed payment, usually in exchange for giving up the right to sue.
Small claims court: A simpler court, or part of a court, for money disputes below a set dollar limit. Its procedures are informal, and people usually represent themselves.
Social host liability: Legal responsibility of a private person who serves alcohol, for example at a party, for harm a drunk guest later causes. The rules vary a lot by state.
Soft-tissue injury: An injury to muscles, ligaments or tendons rather than to bones, such as whiplash, which is a sprain or strain of the neck.
Sovereign immunity: The rule that governments cannot be sued unless a law allows it. Tort claims acts allow some claims, with limits.
Spoliation of evidence: Destroying, losing or altering evidence that should have been kept for a likely claim. Courts can penalize it, for example by telling the jury it may assume the…
Stacking: Adding together the uninsured or underinsured motorist limits for more than one vehicle or policy, where state law and the policy allow it.
Statute of limitations: The law that sets the last day to file a lawsuit. After it passes, a court will usually dismiss the case, however strong it is.
Structured settlement: A settlement paid as a series of future payments, often funded by an annuity, instead of one lump sum. The amounts and dates are fixed when the settlement is signed.
Subpoena: A court order that requires a person to appear and testify, or to hand over documents. Witnesses who are not parties are usually brought to a deposition with a subpoena.
Subrogation: An insurer's right to be repaid from your settlement for what it already paid on your behalf.
Substitution of counsel: A filing, sometimes needing a judge's approval, that replaces one lawyer with another as the lawyer of record in a pending lawsuit.
Summary judgment: A ruling that decides a case, or part of it, without a trial because the important facts are not genuinely disputed and one side is entitled to win under the law.
Survival action: A claim the person who died could have brought if they had lived, such as for their medical bills and lost pay before death. It is usually brought for the estate.

Third-party claim: A claim you make against the other driver's insurance because their driver caused your losses.
Time-limited demand: A settlement offer to an insurer that must be accepted within a stated period. Some states set rules for what such a demand must contain and how long it must stay open.
Tolling: Pausing the limitations clock, for example while the injured person is a child.
Tort: A wrong that causes harm to someone and lets them sue for compensation. A car-crash injury claim is a tort claim.
Total loss: When an insurer decides a damaged car is not worth repairing, usually because repairs would cost about as much as the car is worth or more. The insurer pays the car's…
Transportation network company (TNC): The legal name for a rideshare company, such as Uber or Lyft, that uses an app to connect riders with drivers who use their own cars.

Uninsured motorist coverage: Coverage under your own policy that pays when the at-fault driver has no insurance, or too little.

Venue: The county or court location where a lawsuit is filed and heard. State rules decide the proper venue, often the place where the events happened or where the defendant…

Workers' compensation: State insurance systems that pay medical care and part of lost wages to workers hurt on the job, usually whoever was at fault.
Wrongful death: A claim brought by family members or the estate when someone dies because of another person's wrongful act.

Questions people ask

Is this glossary legal advice?

No. The entries explain general legal ideas and give examples from particular states. How a term applies to your situation depends on your state's law and the facts of your case, which a licensed attorney in your state can assess.

Why do some definitions say the rule varies by state?

Many terms, such as negligence or damages, are general legal ideas used across the country. But the details that change outcomes, like filing deadlines, fault rules and damage caps, are set by each state's statutes and courts.

Where do the definitions come from?

Each entry is based on sources such as the Legal Information Institute's Wex dictionary at Cornell Law School, the federal courts' glossary, state statutes and guidance from insurance regulators. The sources for each entry are listed at the bottom of its page.

Sources

Cornell Law School, Legal Information Institute, Wex legal dictionary — general legal definitions
United States Courts, Glossary of legal terms — court and lawsuit terms

Last reviewed October 29, 2026 by the Accident Claim Facts editorial team. Found an error? Tell us.

Glossary of car accident claim terms