Auto Insurance Glossary

Adjuster
"An employee of the insurance company who examines, inspects and resolves car insurance claims."

Anti-Theft Recovery System
A mechanical device hidden in the car that can be activated if the car is stolen. This device produces a signal that can be used to locate the vehicle.

Auto Insurance Premium
"The price of an insurance policy that can vary depending on such characteristics as coverage type , vehicle type, driving record, driver’s age and credit history, rate of accident and theft recurrence and many other factors."

Benefit
The payment amount that you or some other beneficiary receives when the insurance calm is resolved.

Bodily Injury Liability
A part of car insurance policy that covers all injuries that the driver who holds the policy caused to some other person.

Broadform Collision Coverage
Car insurance available only in Michigan that covers collision damages that happened to the policyholder’s vehicle regardless of whose fault it was.

Business Use
Use of policyholder’s car for work related activities and business reasons (other then communing to and from work).

Car Year
An ordinary measurement for car insurance policies that represents 365 coverage days for one car.

Claim
A request of the person holding the car insurance policy to be compensated for a loss covered by the insurance.

Collision Coverage
A part of car insurance policy that covers the damage to the vehicle of the person holding the policy that results from the collision.

Commuting
The use of the policyholder’s car to drive to and from school or employment location.

Comprehensive Coverage
"A part of car insurance policy that covers the damage to the policyholder’s vehicle that results from factors other then collision or theft. For example, comprehensive coverage would include protection from such factors as fire damage, floods and earthquakes."

Compulsory Car Insurance
A minimum liability car insurance coverage that is required for all drivers by laws and regulations of each specific state.

Continuously Insured
Time period during which the policyholder held insurance coverage from one or several insurers without a gap in coverage.

Coverage
A term that is used interchangeably with insurance.

Deductible
A dollar amount or a percentage of the insurance claim that is paid directly by the person who holds the insurance. Larger deductible usually reduces the annual cost of insurance policy.

Domestic Insurance Company
An insurance company that was incorporated (or formed/legalized in any other way) in some specific state where the term is used.

Effective Date
The certain date when the car insurance policy begins to cover the policyholder.

Endorsements
"changes to the original car insurance policy. For example, deductibles change is an endorsement."

Exclusion
Insurance policy clause that specifies what items and risk factors are not covered by the insurance policy.

Extended Coverage
Insurance policy clause that specifies what additional coverage is available in addition to the basic insurance coverage.

Extraordinary Medical Coverage
Insurance coverage that provides protection for injuries that require serious and lasting medical treatment.

File-and-Use States
"States in which insurance companies are required to file changes in rates with their supervisory body or regulators, but are not required waiting for final authorization."

Financial Responsibility Law
A law passed by a state that requires all drivers to show the evidence that they have sufficient assets to cover accident claims up to the minimum amount required by law.

Full Coverage Insurance
Car insurance policy that includes all coverage that is required by state laws and regulations.

GAP Insurance
Insurance coverage available in some states that covers the difference between the car loan amount and the amount paid by the insurance company for regular claim.

Garaging Location
A location where the policyholder parks his or her car for most of the time.

HEV
"Hybrid Electric Vehicles, cars that use a mixture of battery and fuel power option."

Insurance Claim Reports
Reports that provide the details of insurance claims filed by insured drivers.

Judgment
A final decision of the court.

Liability Insurance
Coverage for the amount that the policyholder will have to pay for caused injuries of damage.

Limits
Maximum loss amount that the insurance company will cover and pay when claim is submitted.

Mediation
A process when a third party helps to resolve a certain conflict between two parties.

MVR
"Motor Vehicle Report, a document that provides details of some person’s driving record."

No-Fault
An insurance coverage that will pay for injuries of policyholders regardless of fault.

Non-Passive Alarm
An alarm system that has to be manually turned on when the driver leave the vehicle.

Passive Alarm
An alarm system that is automatically turned on and signals a siren when someone attempts to break into the vehicle.

Personal Injury Protection Coverage
A part of car insurance policy that covers medical treatment and therapy expenses for injuries to all people (both the driver and passenger) inside the policyholder’s vehicle.

Policy Expiration Date
A date when the car insurance coverage ends.

Policy Term
The time period during which the insurance policy is valid.

Primary Driver
The person (policyholder) who drives a car most often.

Primary Policyholder
The person who’s contact information is used by insurance company as the main point of contact.

Property Damage Liability Coverage
A part of car insurance policy that covers the damages that the driver who holds the policy caused to some other person’s property.

Rental Car Reimbursement
Insurance coverage that will pay for rental car expenses if the policyholder’s car is damaged or stolen.

Secondary Driver
A person who is covered by insurance policy and is authorized to drive a car but who is not listed as the primary driver.

Total Loss
A situation when the car is damaged in such a way that repairs will be more costly when the actual value of the car.

Towing Coverage
Insurance coverage that will pay for towing expenses that you may have in a case of an accident.

Vandalism
Destruction or damage to a vehicle or other property.

VIN
"Vehicle Identification Number, the distinct 17-digit number that includes abbreviations for vehicle's serial number, year, make and model."

Uninsured Motorists Coverage
A part of car insurance policy that covers the policyholder’s damages and injuries that are cased by hit-and-run drivers or by drivers who don’t have an insurance policy.

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