| A
|
| Actual
Cash Value | Replacement
Cost minus depreciation. The cost of a new item of similar make and model,
less depreciation. (See Replacement cost). |
| Additional
Insured | In
auto insurance, a person (other than the NAMED INSURED) or organization
protected by the policy through endorsement. This is typically (on an auto
policy) an auto leasing company or may be an employer such as a real estate agency. |
| Agent | A
licensed transactor of insurance who always represents the Insurance Company.
Within the title AGENT is the authority to Bind coverage. (see BROKER) |
| Antique
Auto | An
automobile or truck, at least 25 years old which has been substantially restored
to original condition, and which is used exclusively for parades, shows, and occasional
drives. |
| Appraisal | a)
A written estimate of value of property to be insured completed by an individual
trained to render such estimate. (See Arbitration) |
| Arbitration | Non-judicial
resolution of dispute. Arbitration usually (in auto insurance) concerns
matters of at fault parties in an accident, resulting liability for injury and
levels of such injury. Arbitration is conducted by a single neutral arbitrator.
If the parties cannot agree on an arbitrator, then each shall select and the two
so selected shall appoint the single neutral arbitrator. In auto insurance
if the dispute involves the value of the vehicle or the amount of damage the resolution
may be accomplished by appraisal which is conducted by three vehicle appraisers.
(See Appraisal) |
|
B
|
| Bailee | An
entity (person or organization) having legal possession of one's property without
having title (right to sell) to such property. The best example of a Bailee is
a dry cleaner. They have legal possession of garments without having the right
to sell such garments. Baillees with regard to automobiles may be auto repair
facilities, valet parking, car washes, etc. |
| Bind | The
act of effecting coverage. |
| Binder | A
temporary contract of insurance |
| Binder
Date | The
date and time that coverage is bound or put into effect. (see Bind) |
| Bodily
Injury | Physical
injury to the person of a Third Party. This includes sickness, disease,
pain and suffering distress, loss of income and even death. (See Third Party) |
| Broker | A
lincensed transactor of insurance who represents the client. ( See Agent; Bind) |
| Broker
Fee | The
fee for services rendered that is charged by a Broker. Such a fee is is addition
to or separate from any Commission. ( See Broker, Commission) |
| C
|
| Cancel | The
act, of either party in an insurance contract, of ending the contract prior to
its expiration. Both parties are required to give written notice to the other
party to effect such cancellation. The insurer is required to give at least ten-(10)
days notice prior written warning of such cancellation. |
| Classic
Auto | An
automobile which been substantially restored to original condition, the make and
model of which the public has shown an unusual degree of interest ( i.e. 1957
Ford Thunderbird. 1964 Chevrolet Impala S/S, Early Mustang Convertibles, etc.) |
| Collision | (a)
Impact of an automobile with another object or person outside the vehicle or the
upset (overturning) of such vehicle; (b) That coverage which pays for damage to
our insured's vehicle, in the event of the above. this coverage is usually subject
to a deductible. ( See Deductible) |
| Collision
Deductible Waiver (CDW) | That
Coverage which, in the event our insured's car is damaged in an accident which
is the fault of an identified Uninsured Motorist, waives (or eliminates) the collision
coverage when repairing the auto. ( See Collision; Deductible) |
| Combined
Single Limit (CSL) | A
limits structure for Bodily Injury and Property Damage Liability or Uninsured
Motorist Bodily Injury coverage which provides one single limit, which provides
one single limit, which is the maximum payable for all damages in any one occurrence.
Most commercial auto insurance is written CSL. ( See Split Limits) |
| Commission
| Compensation
tot he producing agent, broker, or agency for writing and servicing the policy
from the insurance carrier. Generally a percentage of the Premium. ( See
Premium) |
| Comprehensive | That
coverage which pays for direct and accidental damage to the insured's automobile,
other than that caused by Collision. All losses not specifically excluded
are covered and such coverage usually has a deductible. |
| Conditions | Also
refered to as terms and conditions. These are typically circumstances that must
be present for the coverage to apply. |
| Contract | A
promise or series of promises that are enforceable under the law. |
| D
|
| Declarations
| Also
known as the "Dec Page" or merely the "Dec." That section
of the insurance policy that distinguishes one policy from all others. It contains
the insured's name, address, a description of the property insured, the premium,
etc. |
| Deductible | An
amount of money which, in the event of a covered loss, the insured is required
to pay prior to the insurer being liable for any damages. The purpose of a deductible
is to eliminate the expense of processing small claims. |
| Defense
| Coverage
provided in most liability policies, which pays for the cost of defending the
insurance in the event of lawsuit regarding a covered loss. Defense cost, in the
auto policy, is said to be "unlimited", in that the policy requires
the insurer to pay whatever is necessary, however it is actually limited in that
the insurer can pay policy limits in damages and thereby avoid the defense requirement
entirely. |
| Down
Payment | An
amount of money (usually a percentage od the premium plus any fees) which the
insured must be paid in order for the coverage to be bound. ( See Bind) |
| E
|
| Effective
Date | The
date and time (usually at 12:01 a.m.) in which the policy contract begins. Actual
coverage may begin earlier than this due to a binder. ( See Binder Date) |
| Excess | Coverage
that applies only after some other policy has said its full policy Limit. This
may result from policy structure, such as in the case of an Excess Liability
or Umbrella policy, or as a result of two policies applying to the same loss.
(See Primary) |
| Excess
Liability Coverage | Liability
coverage that is written to provide higher Limits than those available
in the Primary policy. This policy is only liable after the Primary
policy has paid its full Limits of liability are needed, but the primary
carrier is unwilling or unable to provide such limits. The Primary policy
may provide Limits of 15/30/50 and the Excess policy 85/270/45 to
provide total Limits of 100/300/50. |
| Exclusion | Language
in a policy ( or which may be endorse onto a policy) Which specifies that a given
circumstance is not covered. An example would be intentional acts of the insured.
If an insured were to damage property or cause bodily injury on purpose, the policy
will not provide coverage due to the intentional acts exclusion. another example
would be the Named Driver Exclusion, which states that if a Designated person
Specified by name is driving the automobile at the time of loss, the policy will
not provide coverage. |
|
F
|
| First
Party | The
insured. A first party loss is a loss that involves injury and/or damage to the
property of our insured. ( See Third Party) |
| G
|
| Good
Driver | As
define in Prop. 103, a Good Driver is: - Someone
who has been continuously licensed for three or more years;
- Someone
who has been continuously licensed in the U.S. or Canada for eighteen months or
more; and
- Has
less that two traffic violations or only one at-fault accident not involving bodily
injuries in the last 36 months.
- Has
not been convicted of DUI or manslaughter on or after January 1, 1996 - California
law states that any driver convicted of a DUI or manslaughter on or after 1/1/1996
will not be eligible for consideration as a good driver for seven years from the
convicted date. Good drivers may not be refused insurance by any auto carrier
in the State of California and must be given a twenty percent (20%) discount over
carrier's best rates.
|
| Gray
Market | A
vehicle which was built for sale outside the U.S. These vehicles ( usually built
by Porche, Mercedes, or BMW) do not meet U.S> standards regarding emission
control, safety glass, lighting. etc. |
| H
|
| Home
Owner | The
person who pays the mortgage on the house |
| I
|
| Insurance | The
contractual transfer of the financial consequences of loss. |
| Insured | Anyone
on the declaration page or driving the insured vehicle with the permission of
an insured. ( See Permissive User) |
| Insuring
Agreement | Promise
made by the insurance company, which outlines its duties. Exclusions, Conditions
and definition that appear later in the policy modify this promise. |
| L
|
| Liability | The
legal responsibility for injury done by the insured to a Third Party, or
damage done to their property. ( See Third Party) |
| Limits
| Maximum
amount payable under a given coverage. May be per person, per occurrence, per
day or per year. ( See Spilt Limits; Combined Single Limit) |
| Loss
Payee | Typically
the finance company holding title to the owned auto. |
| M
|
| Medical
Payments | An
optional auto coverage which pays for the medical expanses of the Named Insured,
members of his/her family, and passengers of his/her car if injured in a Collision
accident. The Named Insured and Relatives are also covered if struck
as a pedestrian. This coverage is Excess to any other medical insurance.
( See Excess) |
|
N
|
| Named
Insured | That
person so listed on the Declarations and his/her spouse if a resident of
the same household. |
| Non-Owned
Auto | A
borrowed or rented automobile. |
|
O
|
| Occurrence | An
event or series of events which cause Bodily In jury and/or Property Damage.
May Include repeated or continuous exposure to the same injurious condition. |
| Operator | In
auto insurance, that person seated immediately behind the steering control of
the automobile and no other person. |
|
P
|
| Permissive
User | An
entity not listed on the policy, using the insured's vehicle with permission.
Depending on the particular policy, certain individuals may not be covered, even
if given permission by insured. ( See Exclusions) |
| Policy | A
legal Contract with contains the agreement between the Insurer and the Named Insured.
A policy is named up of five (5) parts: - The
Declarations
- The
Insuring Agreement(s)
- The
Exclusions
- The
Conditions
- The
Definitions
|
| Policy
Jacket | A
preprinted brochure which contains all policy language except that contained in
the Declarations Page and Endorsements. In the Policy Jacket you
will find the Insuring Agreement(s), Exclusions, Conditions and Definition. |
| Premium | Consideration
paid by the policy. The cost of the policy. |
| Primary | That
policy which must pay first in the event of loss. This would be due to the wording
of the policy as in the case of an Excess Liability policy or where two
policies apply to the same loss. ( See Excess ) |
| Private
Passenger Auto | A
self propelled motor vehicle, with neither more nor less than four wheels, designed
for use upon streets and highways and subject to motor vehicle registration under
the laws of California. |
| Producer
| A
fire and casualty licensee who, for compensation, acts or aids in any manner of
soliciting, negotiating, or procuring the marking of any insurance contract on
behalf of the insured. |
| Producer
Fee | The
fee charged by the producer for services, which is in addition to the premium. |
| Proof
of Non-Fault/ No B/I | Documentation
required by the insurer to support not charging for an accident or not assigning
points for bodily injury in an accident. Acceptable forms are limited to a police
report, a letter from the previous insurer or letter from the carrier of the other
party in the accident. The insurer may accept a copy of the claim check stub if
it contains sufficient information. |
| Property
Damage | Damage
or destruction including loss of use of a Third Party's property. Reduction
in value is the measure of Property Damage. |
| Punitive
and Exemplary Damage | That
form of damage, awarded by the court, which is intended to punish the wrong-doer,
not to compensate the injured party. this from of damages is generally not covered
by a liability policy. |
|
Q
|
| Quote | An
estimate of the cost of insurance given to a prospective client. This estimate
does not constitute an offer and therefore is not enforceable. It is literally
an invitation to the insured to make an offer. The offer, which may be accepted
or rejected, is the policy application. |
| R
|
| Reinstate
with Lapse | The
act of re-activating a policy which has ceased top be valid due to expiration
or cancellation. There is a period between the cessation of coverage and its reinstatement
during which the carrier provided no coverage. ( See Cancel ) |
| Rental
Reimbursement | That
optional coverage which will reimburse the insured for the expense of renting
a vehicle while his/her vehicle is in the shop due to a covered loss. Coverage
is usually written with a per day Limit and a maximum number of days per
Occurrence. ( See Limit; Occurrence ) |
| Replacement
Cost | The
cost of replacing the damaged property with new property of like kind and quality
without deduction for depreciation. ( See Actual Cash Value ) |
| S
|
| SR1P | A
form filed by the insurance company with the California Department of Motor Vehicles
( DMV ) which states that the insured has an auto insurance policy that meets
California financial responsibility requirements and requires that the DMV be
notified if such policy is cancelled. The requirement to file such form is usually
due to an uninsured accident or due a negligent operator suspension. ( See SR22
) |
| SR22 | A
form filed by the insurance company with the California Department of Motor Vehicles
( DMV ) which is one of three (3) types: a) Owners filing - States that the person
named on the form is insured while driving any vehicle that he/she owns subject
to usual policy exclusions. b) Operators filing - States that the person
so named is insured while driving any vehicle not owned subject to usual policy
exclusions. c) Broad Form Owner/ Operator filing - States that the person so named
is insured while driving any vehicle. This form requires that in the event of
policy cancellation the DMV be notified. ( See SR1P ) |
| Split
Limit | A
limits structure for Bodily Injury and Property Damage Liability
or Uninsured Motorist coverage which provides, for Bodily Injury,
one limit person. which is the maximum payable for all damages payable to nay
one injured person, a separate limit per Occurrence, which is the maximum
payable for all Bodily Injury in any one occurrence, and third limit which
is the maximum payable for Property Damage in any one Occurrence.
Most personal lines auto insurance is written Split Limits. ( See Limit; Occurrence;
Combined Single Limit) |
| Subrogation | The
transfer of the insured's legal right against an injuring Third Party to the insurance
carrier. ( See Third Party) |
|
T
|
| Third
Party | Someone
not protected by the Insurance Policy. Typically the other party in an
auto accident. ( See First Party ) |
| Towing | The
optional auto insurance coverage which will reimburse the insured for the expense
for towing or repairs at the place of disablement in the event the vehicle becomes
disabled. Coverage is written with a per Occurrence Limit. ( See Occurrence;
Limit) |
| Trailer
Liability | Trailer
Liability is always provided by the towing vehicle. ( See Liability ) |
| U
|
| Umbrella
| A
broad liability coverage form that provides another layer of liability coverage
over all covered personal lines exposures, (i.e., the auto policy, the homeowner
liability coverage, the boatowners policy, etc.). The form also provides coverage
for some exposures that are not covered by the underlying policies such as coverage
for libel and slander ( Personal Injury). ( See Liability) |
| Uninsured
Motorist Bodily Injury (UMBI) | That
coverage which, in the event our insured is injured in an accident which is the
fault of an Uninsured Motorist, covers the Bodily Injury expense of the
Named Insured, Relatives and passengers in his/her auto. The coverage
is generally written with a per person and per Occurrence Limit. ( See
Occurrence; Limit; Named Insured) |
| Uninsured
Motorist Property Damage (UMPD) | That
coverage which, in the event our insured's car is car is damaged in an accident
which is the fault of an Uninsured Motorist, pays the cost of repairing the auto.
This coverage is only written when the policy does not cover collision and has
a variable maximum Occurrence Limit. ( See Collision Deductible Waiver
) |
| The
following definitions are offered for educational purpose only and do not represent
agreements. The definitions, terms and coverages in a given policy may be different
than the suggested here and such policy will be governed by the language contained
therein. |
