Auto Terms Glossary

SR22FR44INSURANCE.COM INSURANCE TERMS GLOSSARY

 

Actuary: An expert that appraises, assesses and administers statistical data in order to establish rates and rating methods and determine the risks related with policies.

 

Adjuster: An expert employed by the insurance companies to evaluate the losses of their policy holders and settle claims.

 

Agent: A person who sells insurance - you can have an agent that represents only one insurance company or many.

 

Appraisal: An inspection on your vehicle that determines the insurable value of your vehicle or the amount of damage done to your vehicle.

 

Arbitration: A decision by a third party for the insurance company and the insured to agree on.

 

Arson: The purposeful setting of a fire.

 

Binder: Temporary insurance coverage that is granted before the actual auto insurance policy is written.

 

Bodily Injury: In a case of an accident caused by the insured, this portion of an auto insurance policy provides coverage to make payment up to a specified amount for injuries to another party.

 

Broker: A professional person that is the go-between for the customer and the insurance company.

 

Collision insurance: An auto insurance policy that insures and covers damage to the policy holder's vehicle that was sustained in a car accident with another vehicle or property.

 

Comprehensive insurance: An auto insurance policy that covers damage to the policy holder's vehicle that was not sustained in a motor vehicle collision, such as acts of God, impacts with an animal, fire, theft or other damage.

 

Compulsory insurance: The law requires that you have a minimum level of insurance. This is true throughout the United States and Canada.

 

Deductible: The amount the policy holder will pay when they make a claim on their collision or comprehensive insurance policy.

 

Fraud: Obtaining payment from the insurance company by lying about the cause of the claim.

 

Full Coverage: Full coverage auto insurance pays for damages to the insured's own vehicle/property and to the other party’s vehicle/property, regardless of fault. Full coverage insurance is subject to a deductible.

 

Hardship License: People who drive to work depend on their vehicles - and having valid licenses to drive those vehicles. If you get arrested for a DUI (driving while under the influence) in Florida, that privilege may be taken away. However, you may be able to obtain a hardship license for business or employment purposes.

 

Liability insurance: The part of your insurance policy that pays for the damages done to other people and their property. This extends to cover medical expenses, death benefits in the event of a fatality and reparation costs on vehicles and buildings as well as other property.

 

Limits: This is the maximum dollar amount that your insurance company will pay out in a year for your insurance coverage.

 

Loss of use: Auto insurance that enables you to have a rental car while yours is being repaired or replaced.

 

No-fault insurance: A policy that pays for each driver's injuries regardless of who is at fault in the collision. This insurance varies from state to state.

 

Personal Injury Protection (PIP): In case of accident, this portion of an auto insurance policy covers medical treatment of injuries to the policyholder (driver) and the policyholder's passengers if they are included. PIP coverage is only applicable in a few states.

 

Premium: The amount of money that you pay for your auto insurance.

 

Property Damage: In case of accident caused by the insured, this portion of an auto insurance policy provides for payment up to a specific amount for damage caused by the insured to another person's automobile or property.

 

Subrogation: A legal process in which the insurance company, after paying a loss, seeks to recover that amount from another party who is legally liable for the damage.

 

Total loss/Totaled: The absolute destroying of a vehicle so that it is not drivable or fixable. An adjuster will consider your vehicle a total loss if the cost to repair it exceeds 60 per cent of the vehicle's value. The percentage listed can vary from insurance company to insurance company - some have higher percentages while others use a lower percentage.

 

Uninsurable Driver: Not eligible for insurance coverage due to high risk.

 

Uninsured Motorist: In case of accident caused by another party who does not have auto liability insurance, this portion of an auto insurance policy pays to repair damage to the insured's own vehicle/property, and then seeks to recover the amount paid through subrogation. This coverage differs from state to state.

 

Under-Insured Motorist: In a case of accident caused by another party who does not have enough insurance to cover the total amount of damages, this portion of an auto insurance policy pays the additional, uncovered amount of damage to the insured's own vehicle/property, and then seeks to recover that amount through subrogation. This coverage differs from state to state.

 

Unsatisfied Judgements: An unsatisfied judgment is one which has not been paid or performed by the person against whom the judgment was rendered. Some states have established laws to reimburse those injured in auto accidents that have been unable to collect from the responsible party.

 

Void: This states when your insurance policy is free from being legally binding. You can have your insurance voided or canceled for many reasons, including non-payment or fraud.

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