Adjuster -- A person who
evaluates an insurance claim and determines the amount to be paid.
Agent -- A person authorized to sell and
service insurance policies.
Auto insurance score -- Like a credit score,
this score is based on information found in a consumer's credit
file. Insurance companies consider auto insurance scores when
pricing policies. Having black marks on your credit report could
really bump up your auto insurance costs. Other factors that affect
the cost of your auto insurance include your age, marital status,
driving record, the type of car you drive and whether you live
in an urban or rural area.
Binder -- A temporary insurance
contract that provides proof of coverage until a permanent policy
can be issued.
Bodily injury liability -- The part of an
auto insurance policy that pays for injuries you may cause another
driver or pedestrian. It includes medical expenses and loss of
wages.
Claim -- A financial reimbursement
requested for an insured loss.
Collision -- The part of an auto insurance
policy that pays to get your car repaired after a collision with
another vehicle or an object such as a fire hydrant or utility
pole. It is collision insurance that will get your insurance company
to seek out another driver's insurance company to pay for repairs
if they were at fault. A deductible amount will apply.
Comprehensive -- This part of an auto insurance
policy covers damages to your car caused by something other than
a crash. A vandal breaks in, a tree falls on it or floodwaters
engulf it. A deductible amount will apply.
Declarations page -- The
front page of an auto insurance policy listing the name of your
insurance company, your policy number, your coverage, the cost
of the coverage and your deductibles. This page also lists the
vehicles insured on the policy as well as vehicle identification
numbers.
Deductible amount -- The amount of money
a policyholder must pay before an insurance company steps in and
pays the rest. Deductible amounts range from $100 to $1,000. The
higher your deductible the lower your insurance premium or cost.
A higher deductible also means you'll have to pay more money out
of your own pocket if an accident or illness should occur.
Discount -- A reduction in the cost of your
auto insurance premium. Insurance companies offer discounts for
everything from a teenage driver's good grades to a car's safety
equipment including airbags, an anti-lock brake system and a security
alarm.
Emergency road service --
This part of an auto insurance policy pays for the cost of having
your car towed after it breaks down.
Exclusion -- A provision in an insurance
policy that denies coverage for certain losses, locations, people
and properties.
Gap insurance -- A type of
insurance offered to auto lease and loan customers that owe more
on a car than it's worth. Gap insurance pays the difference between
what you owe and the actual cash value of a vehicle in the event
the car is stolen or destroyed.
High risk driver -- If you
have accidents or tickets on your driving record, many insurance
companies will classify you as a high risk driver and charge you
more for an insurance.
Installment plan -- A payment
schedule that allows you to pay your insurance premium over a
period of a time for a service fee.
Insurance -- In auto terms, a contract in
which one party agrees to pay for another party's financial loss
resulting from a collision, theft or other damage. Leases and
loans generally require consumers to maintain a certain level
of insurance.
Insurance identification (ID) card -- A wallet-sized
card issued by an insurance company that lists a policyholder's
coverage and policy number.
Liability insurance -- This
part of an auto insurance policy covers the injuries and damage
you cause to other drivers and their vehicles when you are at
fault in an accident. If you are taken to court, liability coverage
will apply to your legal costs. Most states require drivers to
carry liability coverage. The amount of coverage varies by state.
Limits -- The maximum amount of benefits
your insurer will pay for a loss as designated in your insurance
policy.
Medical payments coverage --
This part of an auto insurance policy pays for medical expenses
and lost wages to you and any passengers in your vehicle after
an accident. It is also known as personal injury protection (PIP).
No fault insurance -- If
you live in a state with no fault insurance regulations, your
auto insurance policy pays for your injuries no matter who was
in the wrong in an accident. No fault insurance states include
Colorado, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan,
Minnesota, New Jersey, New York, North Dakota, Pennsylvania and
Utah.
Personal property liability
-- The part of an auto insurance policy that pays for damages
you may cause to another's car or property.
Personal injury protection (PIP) -- This
part of an auto insurance policy pays for medical expenses and
lost wages to you and any passengers in your vehicle after an
accident. PIP is also known as medical payments coverage.
Policy -- A written contract detailing your
insurance coverage and the premium you agree to pay.
Premium -- The amount charged for an insurance
policy. A premium is based on the type and amount of coverage
you choose. Other factors affecting your insurance premium include
your age, marital status, your driving and credit records, the
type of car you drive and whether you live in an urban or rural
area. Premiums vary by insurance company.
Rental reimbursement -- This
part of a policy pays for the cost of a similar-sized rental car
when your car is in a repair shop after a wreck.
Surcharge -- A charge added
to your auto policy premium after a traffic violation or an accident
in which you were at fault.
Underinsured driver -- This
part of an auto insurance policy covers injuries to you caused
by a driver without enough insurance to pay for your medical expenses.
Some states include damages to your car in this coverage.
Uninsured driver or motorist -- This
part of an auto insurance policy covers injuries to you caused
by a driver without insurance. Most states require drivers to
carry uninsured motorist coverage. Some states include damages
to your car in this coverage.
