April 28, 2017

Insurance Terms

insurance-terms

Additional Interest Insured
A person or company named on the policy who can be held liable for an accident that involves another insured individual.

Bodily Injury Liability Coverage
Pays for injuries or death expenses that the insured driver is responsible for. Also referred to as ‘BI.’

Comprehensive Coverage
Pays for the damage caused to the insured’s automobile.

Collision Coverage
Pays for the damage caused to the insured’s vehicle if it collides with an object. In some cases, this type of coverage can extend to a vehicle the insured individual doesn’t own or is renting.

Declarations Page
The page in an insurance policy that summarizes what your coverage entails. It lists information including the contact information, the policy’s term, vehicle description and the premium and coverage amounts.  Also referred to as the ‘Dec Page.’

Deductible
The payment that the insured is responsible for before the insurance company begins to pay for damages caused.

Endorsement
Any modification made to the insured’s policy.

Limits
Indicates the maximum amount an insurance company will pay for injuries or damages.

Loan/Lease Payoff Coverage
Pays the amount the insured owes on a vehicle after insurance coverage has reached its limits.

Named Insured
The name under which the insurance policy is issued.

Medical Payments Coverage
Pays for the medical or funeral costs if the insured individual is injured as a result of a car accident. Also referred to as ‘MedPay coverage.’

Personal Injury Protection Coverage
Pays for the medical and funeral expenses within the insured’s policy limits. Also referred to as ‘PIP coverage.’

Policy Term
The length of time an insured’s policy is active.

Premium
The money paid to the insurance company in exchange for coverage and protection.

Primary Residence
Indicates the location where the insured individual lives for the majority of the policy term.

Primary Use
Indicates how the insured individual typically uses the car.

Property Damage Liability Coverage
Pays for the damages caused to the other party’s damaged property if the insured individual is at fault. Also referred to as ‘PD.’

Principal Driver
Indicated who drives the car the majority of the time.

Salvage Titles
A document that deems a vehicle beyond the point of repair. Requirements of determining a car totaled vary according to state laws.

Second Named Insured
An additional person who receives the same coverage as the named insured.

SR-22
A document that proves the financial responsibility of an individual who has committed certain traffic violations.

Uninsured Motorist Coverage
Pay for damages including injuries and death if the owner of the vehicle is uninsured and at fault. Also referred to as ‘UM.’

Underinsured Motorist Coverage (UIM)
Pays for damages including injuries and death if the owner of the vehicle does not have enough insurance coverage.  Also referred to as ‘UIM.’

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