|Jack E. Gilbert Insurance Agency Inc.
Glossary of Auto Insurance Terms
|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 lien holder or loss payee. This protects the leasing company if it’s named in a lawsuit for an accident caused by a policyholder.
Automobile Insurance Plans
|Basic Auto Policy
Although still used today to insure substandard risks, two-wheel motorized vehicles, and commercial autos, the Basic Auto Policy has been primarily replaced by the Personal Auto Policy, which combines both physical damage coverage and liability insurance for claims arising out of the ownership or use of a vehicle.
Basic Limits of Liability
Bodily Injury Liability
This covers loss to the insured person’s own auto caused by its collision with another vehicle or object.
Combined Single Limit
Continuous Coverage or Continuous Liability Insurance
Customized Equipment/Special Equipment
The amount an insured person must pay before the insurance company pays the remainder of each covered loss, up to the policy limits.
Defensive Driver Course
The portion of a premium that has been “used up” during a policy term. With a one-year policy, half of the total premium has been earned after six months.
Effective Date/Inception Date
Extended Non-Owner Liability
|Family Automobile Policy
Now replaced by the Personal Auto Policy, the Family Auto Policy was a package policy in which both liability and physical damage protection to an insured’s vehicle was offered under one policy.
Financial Responsibility Laws
First Party Benefits
If you are making lease or loan payments and you experience a total loss, there may be a difference (gap) between the market value of your vehicle and what you still owe on it. This optional coverage pays the difference.
Good Student Discount
|Hit and Run
An accident caused by someone who does not stop to assist or provide information.
An identification card issued by your insurance company that provides evidence of liability insurance. Such evidence is required in most states.
|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.
Loss Payee/Lien holder
This pays for medical and funeral expenses incurred in an auto accident, regardless of fault. It will also cover injuries sustained by passengers in your car, or while you’re operating someone else’s car (with their permission), in addition to injuries you or your family members incur when you’re pedestrians.
MVR – Motor Vehicle Record
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.
Named Non-Owner Policy
The written documents of a contract for insurance between the insurance company and the insured. Such documents include forms, endorsements, riders and attachments.
Private Passenger Automobile
Pro Rata Cancellation
Property Damage Liability Insurance
The process of keeping an active policy in force through the issuance of a renewal policy.
|Safe Driver Plan
A rating system that assigns points for traffic convictions and certain accidents. Similar to a merit-rating plan, each point increases the surcharge percentage to the baseline rates.
Short Rate Cancellation
Stacking of Limits
The length of time for which a policy or bond is in force.
Towing and Labor Costs
|Uninsured Motorists Bodily Injury
Uninsured motorists bodily injury coverage (which must be offered in most states) pays for a covered person’s bodily injuries of which an uninsured or hit-and-run motorist is legally liable, but unable to pay.
Underinsured Motorists Bodily Injury
Uninsured Motorists Property Damage
Unsatisfied Judgment Fund
|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).
|Waiver of Collision Deductible
This option pays your collision deductible when you carry collision coverage on a vehicle that is damaged by an uninsured or hit-and-run motorist who is at fault. Coverage applies only when there is actual physical contact and when you can identify the uninsured driver or vehicle.
Whole Dollar Premiu