Car Insurance Glossary |
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Additional Insured
One who qualifies as an insured under the terms
of the policy but does not have his or her name
on the policy. Corporations and businesses utilize
this in order to protect their interests in the
event of a lawsuit as a result of an accident
involving one of their employees.
Anti-Theft Devices
Devices designed to prevent theft, vandalism
or assist in its recovery of a vehicle. Examples
include car alarms, motion detectors and
starter disablers.
Assigned Risk
A risk not normally accepted by insurance providers
but under state law they must be acquired.
Auto Insurance Plan
A program set up in various states to ensure
that valid driver’s license holders
will be able to purchase auto insurance.
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Basic Limits of Liability
This is a term normally associated with the smallest
amount of coverage a person is required to have
by state law.
Bodily Injury
A term used to associate injury, sickness,
death or disease. In some jurisdictions emotional
distress may also be included.
Bodily Injury Liability
Legal liability resulting in bodily injury
or death resulting from an accident
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Collision Coverage
This covers loss of one’s personal vehicle
as a result of a collision with another vehicle
or object.
Collision Damage Waiver
A term normally associated with a car rental
agreement that waves the legal responsibility
of renter for any physical damage to the rented
vehicle.
Comprehensive Coverage
Covers damage to a vehicle other than a traditional
accident such as theft, vandalism, and falling
objects.
Covered Person
This is the person, spouse, family member, relative
that is insured under the policy contract.
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Deductible
This is the amount money that the insured is responsible
to cover before the insurer (insurance provider)
specified in the auto insurance policy.
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Earned Premium
A term that is used to identify the amount total
premium amount the insured has already paid during
a specified period of time.
Effective Date
The date shown on the declaration policy that
begins the coverage period.
Expiration Date
The date shown on the declaration policy that
ends the coverage period.
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First Party Benefits
This pays the policy holders for personal injury
or death regardless of who’s at fault.
It is also referred to as Personal Injury Protection
(PIP)
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Gap Insurance
Gap is referred to the difference between market
value of a vehicle and what is actually owned.
Gap insurance covers the difference in the event
of total loss.
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