you should know.*
The amount awarded for property damage losses, usually equal
to the cost of replacing the damaged item, minus depreciation.
If an applicant for auto insurance cannot find a company able
to insure him or her voluntarily, the state assigns the risk
to an insurance company in that state.
Automobile Shared Market.
All automobile insurers in a state participate to make coverage
available to car owners who are unable to obtain insurance in
the regular marketplace. These are usually called assigned risk
plans, joint underwriting associations or reinsurance facilities
(see Assigned Risk, above).
Bodily Injury Liability.
Coverage that protects you against financial loss and pays legal
defense costs when you are legally liable for injuring other
persons in an auto accident. In auto insurance, both bodily
injury and property damage liability are usually required by
state law. The two are often referred to jointly as liability
A policyholders request to recover losses covered by an insurance
Coverage that reimburses you or damage to your own car resulting
from a rollover or collision with another object (not necessarily
Coverage that reimburses you for damage to your own car from
causes other than collision, rollover or general wear-and-tear.
It covers dangers such as hail, flood, theft, fire, glass breakage,
falling objects, missiles, explosions, earthquakes, windstorms,
vandalism or malicious mischief, riot or civil commotion, and
damage from a bird or animal.
Indicates the type of coverage and/or how much protection your
insurance policy will provide.
The amount you must pay before your insurance coverage begins
paying. For example, if you had a $250 deductible and a loss
of $800, you would pay the first $250 and the insurance company
would pay the remaining $550. However, if the loss were only
$250, you would pay the entire amount and the insurance company
would pay nothing.
The decrease in the value of your car or its parts due to age
and general wear-and-tear.
A type of loss your policy will not cover.
First Party Coverage.
Compensation for your losses by your own insurance company rather
than the insurer of the person who caused an accident (for example,
collision and comprehensive insurance).
A person covered by a policy.
Any legally enforceable obligation.
Covers accidental losses resulting from injury to body or damage
to the property of someone else for which the insured is legally
responsible (legally liable). If the loss is covered by the
insurance policy, the payment is made directly to the party
who suffered the loss.
The maximum amount of insurance that can be paid for a covered
loss. For example, if you have a $5,000 loss and the limit on
your policy is $2,500, then $2,500 is the maximum your insurance
company will pay.
The basis for an insurance claim. Insurers also refer to losses
as payments made on behalf of the insured.
Medical Payments Insurance.
Coverage that reimburses you and your passengersregardless
of legal liabilityfor medical or funeral expenses stemming
from bodily injury or death by accident.
Each insured persons insurance company pays for certain financial
losses, such as medical expenses and lost wages, regardless
of who caused the accident. In exchange for these benefits,
the right to sue may be restricted in some cases.
The cause of a loss. Perils include theft, glass breakage, floods,
hail and fire.
Personal Injury Protection (PIP).
A broader form of medical payments insurance coverage under
the no-fault concept. PIP offers protection for expenses actually
incurred, up to a specific, per-person dollar amount. States
with no-fault laws require drivers to buy PIP. It also is offered
as an optional coverage in some states without no-fault laws.
Coverage varies from state to state.
The person who pays a premium to an insurance company in exchange
for the protection outlined in an insurance policy.
The amount of money paid for an insurance policy.
Property Damage Liability.
Insurance that protects you against financial loss if you are
legally liable to others for auto-related damage to their property.
A policy renewal takes place when the coverage of a policy or
standard certificate are to continue by the insurance provider
in exchange for your payment for another policy period (typically
six months or one year).
This material is intended for educational purposes only.
All coverages are subject to availability and qualifications.
Other terms, conditions, and exclusions apply. This is
a brief description of terms, options, coverages and helpful
information. This is not, nor does it, constitute a contract.