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Additional
Insured or Additional Interest - A person or an organization, other than the named
insured or covered person, who is protected under the named insured's auto
policy. If an auto is leased, the leasing company may want to be listed as an
Additional Insured as well as a lienholder or loss payee. This protects the
leasing company if it's named in a lawsuit for an accident caused by a
policyholder.
Automobile
Insurance - A
form of insurance that protects against losses involving autos. Different types
are available depending on the needs and wants of those buying policies.
Examples of coverage types include: bodily injury liability, property damage
liability, medical payments, and collision and comprehensive coverage for physical
damage to the insured's vehicle.
Bodily Injury
Liability - Legal
liability for causing physical injury or death to another.
Claim - Notice to an insurer of a loss
that under the terms and conditions of a policy may be covered.
Collision
Insurance - This
covers loss to the insured person's own auto caused by its collision with
another vehicle or object.
Combined Single
Limit - Bodily
Injury and Property Damage coverage expressed as one single amount of coverage.
Comprehensive
Coverage - Covers
damage to a vehicle caused by an event other than a collision or overturn.
Examples include fire, theft, vandalism, and falling objects.
Customized
Equipment/ Electronic Equipment Coverage - Additional
coverage purchased by the policyholder to cover non-factory customization such
as special paint or decals, special bodywork or wheels, amenities added to the
inside of a van or truck, or extra electronic equipment.
Declarations
(Dec) Page - The front page of your policy is called the
Declarations page. It contains useful
information such as:
Deductible - The amount of the loss which the
insured is responsible to pay before benefits from the insurance policy are
payable. You may choose a higher
deductible to lower your premium.
Defensive Driver Course - These are classes either offered through or approved by Departments of Motor Vehicles to enhance driving skills. These courses may make drivers eligible for discounts on their premiums. Courses taken for traffic school because of a moving violation are not eligible. Endorsement - A written agreement that
changes the terms of an insurance policy by adding or subtracting coverage.
Effective Date/
Inception Date - The date that coverage begins on an insurance policy.
Exclusion - A contractual provision in an
insurance policy that denies coverage for certain perils, persons, property, or
locations.
Expiration Date - The
date your coverage ends. There is usually a time of day associated with this
date, for example, an expiration date of 5/1/2007 at 12:01am. This means your
coverage ends one minute after midnight on the date listed.
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Financial
Ratings - Financial
ratings reflect a rating organization's opinion on the financial strength and
ability to meet ongoing obligations to policyholders. The ratings organizations
most commonly identified with the insurance industry are A.M. Best, Standard
& Poor's and Moody's.
Financial
Responsibility - California’s Compulsory Financial Responsibility Law requires every
driver and owner of a motor vehicle to be financially responsible for their
actions. The statutory minimum
limits of liability in California are:
• $15,000
for death or injury of any one person, any one accident.
• $30,000
for all persons in any one accident.
• $5,000
for property damage in any one accident.
Good Student
Discount - A
premium discount for students with high scholastic grades. Statistical research
has shown a relationship between good grades and safe driving.
Hit and Run - An accident caused by someone
who does not stop to assist or provide information.
ID Card - An identification card issued by
your insurance company that provides evidence of liability insurance. Such
evidence is required in most states.
Insured - The person(s) entitled to
coverage in case of an accident or loss.
Insurer - The insurance company providing
the insurance.
Lapse in
Coverage/ Policy Lapse - A point in time when a policy has been canceled or
terminated for failure to pay the premium, or when the policy contract is void
for other reasons.
Lender/ Lessor - Your
lender is the institution to which you make car payments. Your lessor is the
institution to which you make your lease payments.
Liability Insurance - Coverage
for a policyholder’s legal liability resulting from injuries to other persons
or damage to their property.
Loss Payee/
Lienholder - A
person or entity with a legally secured insurable interest in another's
property, usually a financial institution that loaned money to buy a car. The
car is the loan collateral. If the auto is damaged in an accident, loss
payments will be made to you and to the loss payee on your policy.
Medical
Payments - Covers
the medical costs (up to the specified limit you choose) resulting from an auto
accident for you, your family, and others in your car. It pays regardless of fault.
Multi-Car
Discount - A
discount offered by some insurers for those with more than one vehicle insured
on the same policy.
Named Insured - Any
person, firm or corporation designated by name as the insured person(s) in a
policy. Others may be protected by policy definition even though their names
aren't on the policy, such as other drivers operating (with consent) the named
insured's covered auto.
Per Occurrence
Limit - This
refers to the cap amount an insurance company will pay for all claims arising
from a single incident. In an automobile accident, it comprises bodily injuries
sustained by all parties. When Bodily Injury coverage is purchased in split
limits, the second limit is the "per occurrence" limit: e.g.
$100,000 (per person) /$300,000 (per occurrence)
Per Person
Limit - This
refers to the cap amount an insurance company will pay for any one person's
injuries arising from a single incident. In an automobile accident, it
comprises bodily injuries sustained by each person. When Bodily Injury is
purchased in split limits, the first limit is the "per person" limit:
e.g. $100,000(per person)/$300,000(per occurrence.)
Policy - The written documents of a
contract for insurance between the insurance company and the insured. Such
documents include forms, endorsements, riders and attachments.
Policy Period - The period
of time in which a policy is in effect. For example, six months or one year.
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Policyholder - One
who maintains ownership in an insurance policy. This may refer to the policy
owner or those covered under the policy. See also Named Insured.
Premium - The money
paid for an insurance policy based upon the coverage provided.
Private Passenger Automobile - A
four-wheeled motor vehicle that is subject to motor vehicle registration and
used for private personal use.
Property Damage
Liability Insurance - Protection against liability for damage to another's tangible
property, including loss of use. Although this coverage is different than
liability for bodily injury to another person, Bodily Injury and Property
Damage Liability protection are generally written together.
Quote - An estimate of the cost of
insurance based on information supplied to the insurance company.
Renewal - The process of keeping an active policy in force through the issuance of a renewal policy. Rental Reimbursement - This
optional coverage will reimburse you for a rental car if your vehicle is
disabled due to a covered loss. This coverage will pay all or part of your
rental car costs.
Split Limit - Any insurance coverage with
separately stated limits for different types of coverage. Example: an
automobile liability policy of 100/300/50 provides a maximum of $100,000 bodily
injury coverage per person, $300,000 bodily injury coverage per accident, and a
property damage limit of $50,000 per accident.
Term - The length of time for which an
insurance policy is in force.
Tort - A private wrong or harm (other
than a breach of contract) committed against another, resulting in legal
liability. A tort is either intentional or accidental (negligent). Automobile
liability insurance is purchased to protect one from suits arising from
unintentional torts.
Tort Feasor - One who commits a tort.
Towing and
Labor Costs - This endorsement, which is added
to the physical damage coverage, provides reimbursement up to a specified limit
to tow your vehicle or pay for on-site labor costs.
Transportation
Expenses - Subject
to a daily and maximum dollar limit, this coverage (under the physical damage
portion of an automobile policy) pays for transportation expenses incurred by
the named insured only in the event of theft of an entire covered auto.
Coverage generally begins after a stated minimum waiting period.
Underinsured
Motorists Coverage - Pays for bodily injury or wrongful death caused by an underinsured
motor vehicle (that is, a vehicle which is insured, but at an amount that is
less than your uninsured motorist bodily injury (UMBI) limits).
Uninsured Motorists
Coverage - Provides coverages for a policyholder involved in a
collision with a driver who does not have liability insurance. This comes in two parts: Uninsured Motorist Bodily Injury (UMBI)
and Uninsured Motorist Property Damage (UMPD). UMBI coverage pays for injuries to you or any person in your
car when there is a collision with an uninsured driver. UMPD coverage pays for property damage
to your car when there is a collision with an identified uninsured driver.
VIN Vehicle
Identification Number - A Vehicle Identification Number is a 17-digit
alpha-numeric code that provides valuable information concerning the vehicle's serial
number, make, model, options, and year in official records (like a Social
Security number for your car).
Waiver of
Collision Deductible - This option pays your collision
deductible when you carry collision coverage on a vehicle that is damaged by an
uninsured or hit-and-run motorist who is at fault. Coverage applies only when
there is actual physical contact and when you can identify the uninsured driver
or vehicle.
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