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Automobile Insurance Glossary
Anti-Theft Device - A device that is capable of tracking and recovering
the automobile, usually through a homing device. This type of system will
contact a response center to begin the process of recovering the stolen automobile.
automobile insurance - This is insurance which protects the insured against
losses involving the use of automobiles. Various coverages may be bought depending
on the desires of the insured. Such coverages include the liability coverages
of bodily injury, property damage, and medical payments, and the physical
damage coverages of collision and comprehensive.
Bodily Injury Coverage - This coverage pays when an insured is legally
liable for bodily injury or death caused by an insured's vehicle or an insured's
operation of most non-owned vehicles. This coverage would also pay for a legal
defense if an insured were sued.
Business Auto Coverage Form - The most recent commercial automobile
insurance coverage form to be used. It can be underwritten as a monoline
policy or as part of a commercial package.
Collision Coverage - automobile insurance that covers loss to an insured's
own automobile caused by its collision with another vehicle or object but
which does not cover bodily injury or property damage liability resulting
from the collision.
Comprehensive Coverage - Usual name for physical damage coverage
resulting from losses caused by events other than collision including fire,
theft, vandalism, falling objects and various other perils. Continuously Insured
Refers to insurance coverage being in effect from an insurer or multiple insurers
at all times, without a break or lapse in coverage at any time for any reason.
Declaration Page - This is the report from your insurance company
which includes the types, limits, and costs for each coverage as well as the
vehicles covered by the policy. It also would include the types of coverage
for each vehicle covered by the policy and other pertinent information.
Deductible - This is the amount an insured agrees to pay in the event
of a loss.
Drive Other Car Endorsement - This is a coverage that can be added
to an auto policy providing auto coverage for individuals named in the endorsement
while they are driving autos not owned by the individuals and not named in
the policy. Otherwise known as DOC coverage.
Employers Non-ownership Liability Insurance - This coverage insures
the employer for liability from the use by employees of their own autos on
company business.
Extended Non-Owner Liability - This is an endorsement to a personal
auto policy that provides broader liability coverage only for specified named
individuals. This endorsement provides cover for non-owned autos provided
for the regular use of an insured, use of autos to carry individuals or property
for a fee, and broader coverage for autos used in the course of business.
Financial Responsibility Clause - This clause states that an auto
policy conforms to the financial responsibility laws of any respective state
in which the insured is using the insured automobile.
Fleet Policy - This is an insurance policy that applies to a multiple
number of vehicles, usually five or more.
Garage Coverage Form - This is a commercial automobile insurance form that
is used to cover automobile dealers, repair shops, service stations, and garages.
Garaging Location - This is the zip code where an automobile is parked
when not being used and usually corresponds to the primary residence of the
insured.
Good Student Discount - This is a discount awarded to students with
high scholastic achievement. Hired Automobile- This coverage applies to autos
an insured leases, hires, rents, or borrows, but not to autos owned by employees
or their families.
Limits- The most an insurance company will pay for a specific insurance
coverage. Individuals can choose the limit, which meets their needs. Many
states have laws that specify the minimum limits an insured must purchase.
Livery Use- The use of an automobile for hire to carry individuals.
Livery use is excluded in auto policies unless coverage for it is specifically
stated.
Motor Vehicle Record - The driving record of an individual which
includes accidents and traffic violations. It is also known as an MVR. Named
Insured- It is the first individual in whose name the automobile insurance policy
is issued.
Named Non-Owner Policy - It is an automobile insurance policy issued to
an individual who does not own an automobile, but who drives loaned or rented
automobiles.
No-Fault Insurance - Several states have laws permitting the individual
automobile accident victim to collect monies directly from their own insurance
company for medical and hospital expenses regardless of whose fault the accident
was. The laws vary from state to state. However, most states will allow the
individual to sue the party at fault if the amount of damages is higher than
a certain stated limit.
Occasional Driver- An individual who is not the primary or principal
driver of the automobile.
Personal Injury Protection or PIP - These policies refer to no-fault
benefits in states that have enacted mandatory or optional no-fault automobile insurance
coverages. Generally, PIP includes benefits for medical expenses, loss of
work income, accidental death and funeral expenses.
Physical Damage - Damage to an automobile resulting from perils
such as collision, theft, fire or any damage to the automobile itself.
Radius of Operation - This is usually used to develop rates for autos
used in a business endeavor. The larger the radius the higher the rates.
Safe Driver Plan - This is a plan for which points are given
for traffic violations and certain types of accidents, with each point
adding a percentage surcharge to the rating factor that is used for
determining rates.
Towing Costs - This is an optional auto coverage that pays the cost
up to a fixed amount for the towing of an inoperable vehicle.
Transportation Expenses - This is coverage for transportation expenses
incurred by the named insured only when the theft of the insured's automobile
occurs. There is a daily and maximum dollar limit.
Underinsured Motorists Coverage - This is coverage in an auto policy
for which the insurer will pay claims up to certain limits for bodily injury
damages, if the limits of liability under the liable motorist's policy are
completely used up and the liable motorist can't pay the full amount for which
he is liable.
Unsatisfied Judgment Fund - Also known as UJF, many states have laws,
which provide for reimbursement to a person injured in a car accident who
has not been able to collect from the responsible party.
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