AAccident: For insurance companies, any road incident which causes damage to your car can be called an accident. It can or cannot involve other vehicles, trees, poles, or pedestrians.
Adjuster: An employee of the insurance company who settles the claim of the policyholder. The adjuster’s work is to evaluate the claim and then decide the payment the insurance company will give to the claimant.
Agent: An insurance agent is licensed to assist you in buying the right insurance policy for your car at the best price. These agents can be associated with one insurance company or with different insurance companies.
Assigned Risk Plan: This for the drivers with poor driving records. These drivers cannot get conventional liability coverage hence they get the plan with high rates.
At-Fault: The party that is legally liable for the damages in an accident.
Auto Damage (AD): Division of the claims department that handles auto claims.
Auto Damage Adjuster: The auto damage adjuster is responsible for writing the repair estimate for your vehicle. This adjuster will also answer your questions about the repair process, your rental vehicle, or your total loss settlement.
Auto Insurance: Auto Insurance provides protection from losses resulting from owning and operating an auto. The insurance covers losses to the insured's property and losses for which the insured is liable as a result of owning or operating an auto.
BBinder: A temporary agreement declaring that the policy is in effect. Used in certain cases to protect a policyholder when it is not possible to issue or endorse the policy immediately.
Bodily Injury: An injury sustained by a person.
Bodily Injury Liability: Helps pay for their medical expenses and lost income as a result of their injuries. This coverage may also help pay for your legal fees if you’re taken to court over an accident.
CCancellation: Termination of an insurance contract before the end of the policy period, by the insured or insurer.
Casualty: The loss or liability from the accident.
Certificate of Financial Responsibility (CFR) SR-22: An SR-22 (CFR) is a certificate mandated by the state to verify that an individual is maintaining auto insurance liability coverage. If a person needs an SR-22 (CFR), they will usually be notified by their state's Motor Vehicle Department.
Collision Coverage: Collision coverage is the damage that the insurance company will cover if your car gets into an accident.
Comprehensive Physical Damage Coverage: Pays for damage to your car from theft, vandalism, flood, fire, or other covered perils. This coverage is subject to the terms, limits, and conditions of your policy contract.
Coverage: Protection and benefits provided in an insurance contract.
DDamage: Loss or harm to a person or property.
Damages: Money that one party becomes legally obligated to pay to another party.
Declarations Page: Dec page or Binder is the document that has the breakdown coverage of the policy. It contains the details of the total premium and coverage costs along with the policy term length and vehicles covered.
Declination: The refusal by an insurance company after the careful evaluation of the application. There are a few states that have banned insurance carriers to decline insurance based on factors like gender or income level.
Deductible: Is the amount paid out of pocket by the policy holder before an insurance provider will pay any expenses.
EEndorsement: It is any modification you make to your original insurance policy.
Exclusions: Some specified items which are not covered by the insurance carrier.
Extended Coverage: An extra coverage for the risks which are not covered in the policy a driver bought.
Expiration Date: This date, found on your declarations page, indicates when your policy coverage runs out. Your renewal policy will start on this date.
FFirst Party: Term used to refer to an insured.
First Party Claims: A claim for damage, loss or injury made by an insured.
First-party coverage: Coverage for the policyholder's own property or person. In no-fault auto insurance it pays for the cost of injuries. In no-fault states with the broadest coverage, the personal injury protection (PIP) part of the policy pays for medical care, lost income, funeral expenses and, where the injured person is not able to provide services such as childcare, for substitute services.
Full coverage: If a driver buys both collision and comprehensive coverage then it will be declared as full coverage insurance.
HHazard: Anything that increases the chance of an accident occurring.
IInsurance ID Card: Also known as an Insurance Card, this card is issued by your insurer and contains basic information about your insurance policy. Some states require you to keep an insurance ID card in your vehicle.
Insured: A person or organization covered by an insurance policy.
Insurer: An organization that provides insurance.
LLiability Insurance: The insurance company will cover the property or person whose liability is on your head in an accident.
Limit: The maximum amount of protection purchased by the insured for a specific coverage.
Loss: The amount an insurance company pays to the driver after a claim.
MMedical Payments Coverage: Covers insurance for all the passengers present in your vehicle at the time of the accident.
PPersonal Injury Protection (PIP) coverage: PIP insurance provides coverage for the driver and the passenger in a car accident. Most of the time it also covers the work loss up to a certain percentage.
Personal Liability Coverage: The damages other than property damage liability and bodily injury are covered in personal liability coverage.
Physical Damage Coverage: The combination of collision coverage and comprehensive coverage is called physical damage coverage. It is a more accurate term for full coverage.
Policy: A specific and detailed agreement between a driver and the insurance company that specifies the terms and coverage related information.
Policy Term: The time a driver will get the insurance coverage is called the policy term. It can be annual or bi-annual depending on the insurance provider.
Premium: The price of the insurance policy that the insured pays in exchange for insurance coverage.
QQuote: The premium price that will be charged for insurance coverages based on specific information provided by the person requesting the quote.
RRenewal: The period when your current policy will end, and you have to pay the premium to restart the same policy smoothly.
Risk: The chance of suffering a loss.
SSalvage: Damaged property which is taken over by the insurance company after payment of a claim.
State-required minimum: The car insurance coverages and limits that states require their residents to carry.
TThird party liability: Is insurance that pays third parties if the insured accidentally cause them injury, loss, or damage.
UUnderwriting: It is the process to calculate the risk involved for the insurance company when they offer insurance to a driver.
Uninsured motorist property damage (UMPD): Helps protect you on the road if someone hits you who doesn’t have insurance or is underinsured. If this happens, this coverage can help cover the repair costs to fix your car if the other driver doesn’t have enough property damage liability insurance.
VVehicle Identification Number (VIN): VIN is the serial number of a car. A driver can check the VIN on the driver’s side door interior, the place where the front window and dashboard meets.
This concludes the list of essential car insurance terms that can aid you in purchasing your insurance policy.
The information provided is for general informational purposes only and does not alter or expand coverage beyond your policy contract. To get specific details about your coverage, please refer to your policy contract.
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