Additional Insured or Additional Interest - A person or an organization, other than the named insured or covered person, who is protected under the named insured's auto policy. If an auto is leased, the leasing company may want to be listed as an Additional Insured as well as a lienholder or loss payee. This protects the leasing company if it's named in a lawsuit for an accident caused by a policyholder.

Automobile Insurance - A form of insurance that protects against losses involving autos. Different types are available depending on the needs and wants of those buying policies. Examples of coverage types include: bodily injury liability, property damage liability, medical payments, and collision and comprehensive coverage for physical damage to the insured's vehicle.

Claim - Notice to an insurer of a loss that under the terms and conditions of a policy may be covered.

Combined Single Limit - Bodily Injury and Property Damage coverage expressed as one single amount of coverage.

Declarations(Dec) Page - The front page of your policy is called the Declarations page. It contains useful information such as:

  • the exact name of your insurance company

  • the policy number

  • your coverages and premiums

  • your deductibles, if applicable

  • the vehicles insured, their identification numbers, and the classifications for rating purposes

Deductible - The amount of the loss which the insured is responsible to pay before benefits from the insurance policy are payable. You may choose a higher deductible to lower your premium.

Endorsement - A written agreement that changes the terms of an insurance policy by adding or subtracting coverage.

Effective Date/Inspection Date - The date that coverage begins on an insurance policy.

Exclusion - A contractual provision in an insurance policy that denies coverage for certain perils, persons, property, or locations.

Expiration Date - The date your coverage ends. There is usually a time of day associated with this date, for example, an expiration date of 5/1/2007 at 12:01am. This means your coverage ends one minute after midnight on the date listed.

Financial Ratings - Financial ratings reflect a rating organization's opinion on the financial strength and ability to meet ongoing obligations to policyholders. The ratings organizations most commonly identified with the insurance industry are A.M. Best, Standard & Poor's and Moody's.

Financial Responsibility - State laws that require every driver and owner of a motor vehicle to be financially responsible for their actions.

Hit and Run - An accident caused by someone who does not stop to assist or provide information.

ID Card - An identification card issued by your insurance company that provides evidence of liability insurance. Such evidence is required in most states.

Insured - The person(s) entitled to coverage in case of an accident or loss.

Insurer - The insurance company providing the insurance.

Lapse in Coverage/ Policy Lapse - A point in time when a policy has been canceled or terminated for failure to pay the premium, or when the policy contract is void for other reasons.

Lender/ Lessor - Your lender is the institution to which you make car payments. Your lessor is the institution to which you make your lease payments.

Loss Payee/ Lienholder - A person or entity with a legally secured insurable interest in another's property, usually a financial institution that loaned money to buy a car. The car is the loan collateral. If the auto is damaged in an accident, loss payments will be made to you and to the loss payee on your policy.

Named Insured - Any person, firm or corporation designated by name as the insured person(s) in a policy. Others may be protected by policy definition even though their names aren't on the policy, such as other drivers operating (with consent) the named insured's covered auto.

Per Occurrence Limit - This refers to the cap amount an insurance company will pay for all claims arising from a single incident. In an automobile accident, it comprises bodily injuries sustained by all parties. When Bodily Injury coverage is purchased in split limits, the second limit is the "per occurrence" limit: e.g. $100,000 (per person) /$300,000 (per occurrence) .

Per Person Limit - This refers to the cap amount an insurance company will pay for any one person's injuries arising from a single incident. In an automobile accident, it comprises bodily injuries sustained by each person. When Bodily Injury is purchased in split limits, the first limit is the "per person" limit: e.g. $100,000(per person)/$300,000(per occurrence.).

Policy - The written documents of a contract for insurance between the insurance company and the insured. Such documents include forms, endorsements, riders and attachments.

Policy Period - The period of time in which a policy is in effect. For example, six months or one year.

Policyholder - One who maintains ownership in an insurance policy. This may refer to the policy owner or those covered under the policy. See also Named Insured.

Premium - The money paid for an insurance policy based upon the coverage provided.

Private Passenger Automobile - A four-wheeled motor vehicle that is subject to motor vehicle registration and used for private personal use.

Quote - An estimate of the cost of insurance based on information supplied to the insurance company.

Renewal - The process of keeping an active policy in force through the issuance of a renewal policy.

Split Limit - Any insurance coverage with separately stated limits for different types of coverage. Example: an automobile liability policy of 100/300/50 provides a maximum of $100,000 bodily injury coverage per person, $300,000 bodily injury coverage per accident, and a property damage limit of $50,000 per accident.

Term - The length of time for which an insurance policy is in force.

Tort - A private wrong or harm (other than a breach of contract) committed against another, resulting in legal liability. A tort is either intentional or accidental (negligent). Automobile liability insurance is purchased to protect one from suits arising from unintentional torts.

Tort Feasor - One who commits a tort.

VIN Vehicle Identification Number - A Vehicle Identification Number is a 17-digit alpha-numeric code that provides valuable information concerning the vehicle's serial number, make, model, options, and year in official records (like a Social Security number for your car).

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