Agent: In insurance, the person authorized to represent the insurer in negotiating, servicing, or effecting insurance policies.
Applicant: The party
applying for an insurance policy.
Application: A printed
form developed by an insurer that includes questions about the prospective
insured and the desired insurance coverage and limits.
Auto Collision Coverage: Optional
auto insurance which pays for damage to your car caused by collision with
another car or object, or by rolling the car over. Frequently required if you
have a car loan.
Auto Comprehensive Physical
Damage Coverage: Optional auto insurance which pays for damage to your auto
caused by things other than collision or rolling the car over, such as fire,
theft, vandalism, flood or hail. Frequently required if you have a car loan.
Bodily Injury Liability Coverage: Pays when an
insured person is legally liable for bodily injury or death caused by your
vehicle or your operation of most non-owned vehicles. This coverage also pays
for your legal defense if you are sued.
Claim: A person's request
for payment from an insurer for a loss covered by the insurance policy.
Collision Coverage: Pays
for loss to your covered vehicle when it collides with another object or
overturns. We will also pay for a collision loss to any non-owned vehicle, or
to a vehicle you have rented other than a vehicle rented for use in connection
with your business or employment, while that vehicle is in your custody, or
while you are operating it.
Pays for loss or damage to your covered vehicle caused by any event other than
collision. This includes damages due to events such as fire, theft, windstorm,
flood, and vandalism. We will also pay transportation and loss of use expenses
under this coverage if your motor vehicle is stolen.
Conditions: The part of
your insurance policy that states the obligations of the person insured and
those of the insurance company.
Insurance coverage was in effect from an insurer or more than one insurer at all
times, without a break or lapse in coverage for any reason.
Contract: A legally
enforceable agreement between two or more parties.
Declarations Page: The
report from your insurance company listing:
- the types of coverage
you have elected;
- the limit for each
- the cost for each
- the specified vehicles
covered by the policy;
- the types of coverage
for each vehicle covered by the policy; and other information applicable
to the policy.
Deductibles: The portion
of the loss that the policyholder agrees to pay out of pocket, before the
insurance company pays the amount they are obligated to cover. For example, if
the covered claim is $1000 and your deductible is $250, you pay $250 and your
company will pay $750. Deductibles help to keep insurance rates reasonable.
Raising the amount of the deductible lowers the cost of insurance.
Depreciation: Reduction in
the value of property due to age and use.
Endorsement: Attachment or
addendum to an insurance policy; an endorsement changes the contract's original
Garaging Location: The ZIP
code where your vehicle is parked when not in use and usually corresponds to
your primary residence.
Insurance Company: An
organization that has been chartered by a governmental entity to transact the
business of insurance.
Insured: The person whose
insurable interest is protected under an insurance policy.
Insurer: See Insurance
Lapse: Termination of a
policy due to nonpayment of premiums.
Liability: A legal
obligation to compensate a person harmed by another's acts or omissions.
Insurance that provides compensation for a harm or wrong to a third party for
which an insured is legally obligated to pay.
Life Insurance: Insurance
that pays a specified sum of money to designated beneficiaries if the insured
person dies during the policy term.
Limits: The most we will
pay for a specific insurance coverage. You may choose the limit which meets
your needs. Most states have laws that specify the minimum limits you must
Loss: A claim either paid
or payable due to the insurer's policy obligations.
Medical Payments Coverage:
Medical and funeral expense coverage for bodily injuries sustained from or
while occupying an insured vehicle, regardless of the insured's negligence.
Named Insured: The first
person in whose name the insurance policy is issued.
Negligence: Failure to use
a generally acceptable level of care and caution.
No-fault Insurance: A
system of compensation enacted by law in many states under which
indemnification is made by the insured's own insurance company regardless of
who is at fault. Details of this system vary significantly from state to state.
Occasional Driver: The
person who is not the primary or principal driver of the vehicle.
Peril: The cause of loss
Personal Property Insurance:
Protects against the loss of, or damage to property other than real property
(real estate) caused by specific perils.
Policy Expiration Date: The
date when your current insurance policy expires. This date can be found on your
current policy, Declaration (or "DEC") page, insurance identification
card or recent cancellation notice. This date is not to be confused with the
date of your next payment or when your renewal payment is due.
Policy Term: The length of
time that the policy is in force. Usually 6 months or a year.
Primary Residence: The place
where you will reside for the majority of your policy term. If you are a
homeowner who does not reside in the home you own, please choose the
"rent" or "other" option.
Primary Use: What your
vehicle is mainly used for:
- To/From Work If
you use your vehicle to commute to and from your work and/or school.
- Business If
your vehicle is used for one or all of the following:
- used to make sales
- used as vehicle for
business trips to bank or post office, picking up supplies, going to
- owned or leased by a
partnership or corporation that have a business listed as and additional
interest on the car
- Farm If your
vehicle is used primarily on a farm, ranch or orchard
- Pleasure No
Policy: The written forms
that make up the insurance contract between an insured and insurer. A policy
includes the terms and conditions of the coverage, the perils insured or
Policy Declarations: The
part of the insurance contract that lists basic underwriting information,
including the insured's name, address and description of insured locations as
well as policy limits.
Policy Limits: The maximum
amount an insured may collect or for which an insured is protected, under the
terms of the policy.
Policyholder: The person
who buys insurance.
Policyowner: An individual
with an ownership interest in an insurance policy.
Policy Period: The amount
of time an insurance contract or policy lasts.
Premium: The price for
insurance coverage as described in the insurance policy for a specific period
Principal Driver: The
person who drives the car most often.
Proof of Loss: A sworn
statement that usually must be furnished by the insured to an insurer before any
loss under a policy may be paid.
Property Damage Liability
Coverage: Pays when an insured person is legally liable for damage to the
property of others caused by your vehicle or your operation of most non-owned
vehicles. This coverage also pays for your legal defense costs if you are sued.
Reimbursement: The payment of an amount of money by an insurance policy
for a covered loss that was initially paid by the insured or a third party.
Reinstatement: The process
by which a insurance company puts back in force a policy that has lapsed or has
been canceled for nonpayment of premium.
Riders: An addition to an
insurance policy that becomes a part of the contract.
Risk: The possibility or
chance of loss or injury.
Second Named Insured: The
named insured or listed agent on a policy may request to designate any other
person listed on the policy as a "second named insured". The second
named insured has the same coverage under the policy as the named insured.
Settlement: An agreement
between a claimant to an insurance policy and the insurance company regarding
the amount and method of a claim or benefit payment.
Theft Limit (or Inside Policy
Limits): The highest amount an insurance company will pay on certain items
of personal property. For instance, some policies have a $5,000 limit for
Underwriting: The process
of reviewing applications for coverage. Applications that are accepted are then
classified by the underwriter according to the type and degree of risk.
Uninsured Motorist Coverage:
Coverage that pays for covered damage for bodily injury that an uninsured
motorist is legally liable but unable to pay.
VIN: The vehicle
identification number (VIN) on your vehicle. This number is usually found on
the dashboard of your vehicle on the driver's side, and is usually listed on
the vehicle registration and title. The VIN number is a combination of letters
and numbers 17 characters in length that can be used to identify the make,
model, and year of your car.