Auto Insurance Terms & Definitions

Bodily Injury Liability:

This coverage provides protection against financial loss should your auto injure others, and you are held liable. Includes such expenses as medical bills and lost wages. You are covered up to the policy limit per one individual, and to an increased limit for an accident injuring two or more people.

Property Damage Liability:

This coverage provides protection against financial loss should your auto damage the property of others, and you are held liable. This includes property such as an auto, house, fence, or building. You are covered up to the policy limit for each separate occurrence.

Medical Payments Insurance:

This coverage provides protection against financial loss when you or others in your auto are injured. It includes such expenses as medical bills and surgery. You are covered up to the policy limit, regardless of who is at fault. This coverage will help fill in the gaps you may have in your own personal or family health plan.

Uninsured Motorist:

This coverage pays for expenses that you and your passengers may incur, as a result of injury caused by an uninsured motorist. The coverage also pays you and your family members up to the policy limit if you are a victim of a hit and run accident, or are struck by a vehicle as a pedestrian.

Underinsured Motorist:

This coverage pays the difference between the amount you are entitled to receive for an injury, and the actual amount of insurance carried by the driver responsible for your injuries. You and your passengers are covered up to the policy limit.

Uninsured Motorist Property Damage:

This coverage pays for the property damage caused by an uninsured motorist, when held liable for damages.

Comprehensive Coverage:

Portion of an auto insurance policy that covers damage to the policyholder's car not involving a collision with another car (including damage from fire, explosions, earthquakes, floods and riots), and theft.

Collision:

Portion of an auto insurance policy that covers damage to the policyholder's car caused by a collision with any object, or upset of your auto. This coverage is subject to the deductible amount that you have selected.

Deductible:

The amount of an insurance claim that the insured person agrees to pay. This amount is deducted from the claim payout.

Rental Reimbursement:

This coverage pays for the rental of an auto, when your insured vehicle is disabled due to a collision or comprehensive loss. Refer to policy for exact coverages, limits and exclusions.

Towing and Labor:

Pays for towing and/or emergency labor costs when the insured auto becomes disabled, up to a stated amount.

Notice of Loss:

A written notice required by insurance companies immediately after an accident or other loss. Part of the standard provisions defining a policyholder's responsibilities after a loss.

Auto Insurance Premium:

The price an insurance company charges for coverage, based on the frequency and cost of potential accidents, theft and other losses. Prices vary from company to company, as with any product or service. Premiums also vary depending on the amount and type of coverage purchased; the make and model of the car; and the insured's driving record, years of driving and the number of miles the car is driven per year. Other factors taken into account include the driver's age and gender, where the car is most likely to be driven and the times of day. Some insurance companies may also use credit history-related information.

Insurance Score:

Insurance scores are confidential rankings based on credit information. This includes whether the consumer has made timely payments on loans, the number of open credit card accounts and whether a bankruptcy filing has been made. An insurance score is a measure of how well consumers manage their financial affairs, not of their financial assets. It does not include information about income or race.

 
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