A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
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Actual Cash ValueActual Cash Value in general means fair market value. Technically, Actual Cash Value means the cost to replace lost or damaged property with new property of like kind and quality minus depreciation. Contrast Actual Cash Value with Replacement Cost; the difference is depreciation.
Additional Insured
Additional Insured refers to a person or entity which is also insured by the policy. The rights of an Additional Insured under the policy are generally less than such rights are for the Named Insured. Examples of Additional Insureds include landlords who lease space to tenants and leasing companies which lease vehicles to drivers.
Appraisal
Appraisal is used in two different contexts. One context is when the insurance company and the insured can't agree upon how much some property which has suffered a covered loss is worth. In that case, the terms of the policy establish an appraisal mechanism to resolve the dispute. The other context occurs when a person wants to insure his valuable items, such as particular pieces of jewelry or fine art. He then gets an appraisal for each such item which establishes the amount of insurance coverage for that item
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BinderA Binder is temporary insurance coverage. One receives a binder as evidence of insurance until the actual policy is issued.
Blanket Coverage
Blanket Coverage provides a specific amount of insurance to an entire group of items without requiring that the details be provided about each item. When insuring valuable articles, such as jewelry, blanket coverage can be very useful because it usually eliminates the need for the client to obtain appraisals for each item.
Bodily Injury (BI)
Bodily Injury means bodily harm, sickness or disease, including death, which results from an accident. If an insured (whether a consumer or entity) is legally liable for the accident, then Bodily Injury coverage will pay for the injured person(s) medical expenses, lost wages, and pain and suffering (up to the insurance policy's Limits). Bodily Injury coverage also will cover the legal defense costs of the insured with certain limitations.
Building Additions and Alterations
Building Additions and Alterations generally is used in the context of a condominium policy. It refers to the additions and improvements (such as wall coverings, interior walls, flooring, cabinetry, sinks, etc.) that are made to the condo and thus become fixtures of the condo. The condo owner, not the condo association, must make sure that she has sufficient insurance to repair⁄replace all of the condo's additions and alterations in the event of a fire or other covered loss.
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C
CLUE ReportA CLUE (which stands for Comprehensive Loss Underwriting Exchange) Report lists auto and property losses for each driver and residential property owner in the US. Whenever an auto insurance or homeowners insurance company rates a risk, it has a CLUE Report pulled. Thus, whether you live in California or Maine and have an auto accident or a homeowner claim, that claim will be able to be seen, for a period of 3 - 5 years, by an insurance company even if you now live in Kansas.
Combined Single Limits
Combined Single Limits refers to liability insurance that provides one sum of money, per accident, for all of the bodily injury and property damage of others for which you are legally liable. For example, if your policy has a Combined Single Limit of $300,000, then a total $300,000 is available, per accident, to pay for all of the bodily injury and property damage of everyone for whom you are legally liable. This $300,000 can be "broken up" in any manner. Contrast Combined Single Limits with Split Limits.
Comprehensive Coverage
Comprehensive Coverage insures your vehicle against any cause of loss except for a Collision. Comprehensive Coverage commonly refers to damage to your vehicle by fire, theft, vandalism, or animal hits. Comprehensive losses are considered not-at-fault events, although such losses might or might not (depending upon a number of factors) affect your rate.
Collision Coverage
Collision Coverage insures your vehicle when it overturns or collides with another object. Collision losses are considered at-fault events and do affect your rates. When the other driver is at-fault and hits your vehicle, the other driver's Property Damage Liability Coverage pays to fix your vehicle, and your Collision Coverage should not need to be used.
Continuously Insured
Continuously Insured means that your auto insurance has been in effect at all times without a lapse or gap. Maintaining Continuous Insurance is one of the most important factors in keeping the cost of your insurance down.
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Declarations Page (Dec Page)The Declarations Page is part of your insurance policy. It contains a summary of many important facts, including who is insured (your name and address); who is providing the insurance (the name of the insurance company); the policy number, the Inception Date and Expiration Date of the policy; the term of the policy (6 or 12 months); the specific types of coverage provided; the limits of coverage provided; the Deductibles; and the cost of the coverage provided.
Deductible
A Deductible is the amount of money that the insured must pay before the insurance company begins to pay for a covered loss. The higher the Deductible, the less expensive is the insurance.
Detached Structures
Detached Structures (also known as Other Structures) are structures located on the insured's property that are separated by clear space from the main residence or building. Examples include detached garages, tennis courts, pole barns, swimming courts and storage sheds. Homeowners and condo policies provide specific amounts of coverage (which can be increased or decreased) for Detached Structures.
Diminished Value
Diminished Value refers to the decrease in an automobile's value after it has been in an accident and properly repaired. For example, if a $20,000 car is involved in an accident and then is perfectly repaired, it might be worth only $18,000. Why? The answer is because most people believe that a car is worth less after is has been in an accident. In the above example, the Diminished Value is $2,000.
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Expiration DateExpiration Date is the date that an insurance policy terminates. It can be important to know that every insurance policy terminates at 12:01 AM (the first minute of the day) on the Expiration Date.
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First Named InsuredThe First Named Insured is the policyholder whose name appears first on the Declarations Page of the policy. The First Named Insured often has certain rights that extend beyond the rights of any Additional Insured (even a Second Named Insured). Thus, if the Declarations Page reads John Doe and Mary Doe, then John Doe is the First Named Insured.
FR-19
An FR-19 is an insurance form that certifies the holder has at least the minimum automobile liability limits required by the State of Maryland. An FR-19 is free, and it is valid for 30 days. An FR-19 in Maryland is analogous to an SR-22 in other states.
Full Coverage
Full Coverage is a term commonly used to mean that the policyholder has more than just liability insurance on a vehicle. Specifically, it indicates that such person also has Comprehensive Coverage and Collision Coverage on a particular vehicle.
Full PIP
Full PIP (or Full Personal Injury Protection) means that the policyholder has elected to have (rather than to reject or waive) an amount of coverage (generally $2,500 per person per accident) for medical expenses and lost wages that results from an accident. It is important to note that Full PIP is payable to the policyholder (and potentially to injured passengers and injured pedestrians) regardless of fault. Thus, even if the insured was the only at-fault driver in an accident, if he is injured and has full PIP, he is eligible to collect PIP benefits
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GAP InsuranceWhen your car it totaled, GAP Insurance pays you the difference between (a) the amount of money you owe the lender for your vehicle minus (b) your car's Actual Cash Value. For example, assume that your 1-year old car is totaled (or stolen) and that you still owe the bank $15,000 for the car. The insurance company will only pay you the vehicle's Actual Cash Value, which might be $12,500. In this example, GAP Insurance will pay you the $2,500 difference.
Garaging Location
Garaging Location is where a vehicle is parked at night. Frequently, college-age students don't live with their parents, but they are insured on their parents' policies. (Specific rules cover these situations.) Different vehicles listed on an auto insurance policy can have different Garaging Locations. It can be very important when a claim occurs that the Garaging Location of each vehicle listed on the policy is correct.
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Inception DateThe Inception Date is the date that the insurance policy begins. Some insurance policies begin immediately, while other policies incept (or begin) at 12:01 AM (the first minute of the day) of the requested effective date.
Incidental Business Liability
Homeowners policies exclude coverage for injuries and property damage you cause which relate to business. If you engage in business, especially at your residence, you might need to purchase an Incidental Business Liability endorsement (which is very cheap) to protect yourself.
Inflation Guard
Inflation Guard is a feature provided in your property insurance policy, which provides approximately 3% - 7% more coverage each year because the cost of repairing ⁄ replacing your property (whether residential or commercial) increases annually due to inflation.
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Liability Limits (or Limits of Liability)Liability Limits (or Limits of Liability) is the maximum amount of money (other than legal defense costs which are provided in addition to your Liability Limits) that the insurance policy will pay for an accident. Although States impose minimum Liability Limits for drivers, every person and business should evaluate their own situation and choose appropriate Liability Limits for their auto, homeowner, and business insurance needs.
Lienholder
Lienholder refers to the bank or other lender that lent you money and that maintains a financial interest in your property, which can be your vehicle, your other personal property, or your real property.
Limited PIP (also known as Waived PIP)
See Waived PIP.
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Medical Payments Coverage (Med Pay)Medical Payments Coverage (Med Pay) pays for the reasonable expenses incurred for medical and funeral expenses from an accident that causes Bodily Injury. In auto insurance, Med Pay is an optional coverage and is paid to the policyholder (and his passengers). In homeowners insurance, a small amount of Med Pay is automatically included, which is paid to others (not the insured or his/her family members).
Motor Vehicle Report (MVR)
A Motor Vehicle Report (MVR) contains all of a driver's moving violations during the past 3 - 5 years. (MVRs are maintained by each State's Motor Vehicle Administration or Department of Motor Vehicles.) MVRs usually do not list accidents. Virtually all States have reciprocity with each other so that a driver who gets, for example, a speeding ticket in another State 1,000 miles away will discover that that violation does appear on her MVR.
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N
Named InsuredThe Named Insured is the person or entity whose name appears on the policy. See First Named Insured and Second Named Insured.
Named Non-Owner Policy
A Named Non-Owner Policy is an auto insurance policy that provides liability only coverage for a person who doesn't own a vehicle but does drive a vehicle (other than a company-vehicle provided to such person) on a regular basis.
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Occasional Operator (Occasional Driver)An Occasional Operator (Occasional Driver) is a person who drives a particular vehicle but only infrequently. Occasional Operators are rated differently than are Principal Operators.
Ordinance or Law Coverage
Ordinance or Law Coverage is an optional coverage offered in property insurance policies for homeowners, condo owners and business owners. After a covered loss, this coverage will pay, up to specified limits, for the increased costs due to the enforcement of any ordinance or law regulating the construction, demolition, remodeling or renovation of a covered building or structure.
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Personal Injury Protection (PIP)Personal Injury Protection (PIP) is coverage contained in auto insurance policies that provides up to $2,500, per person per accident, for medical expenses and lost wages suffered by a driver, passenger or pedestrian. See Full PIP and Waived PIP.
Primary Use
The Primary Use of a vehicle is either for pleasure; for commuting to and from work and⁄or school; or for business. Rates vary depending upon the Primary Use of a vehicle.
Principal Operator (Principal Driver)
A Principal Operator (Principal Driver) is a person who drives a particular vehicle most of the time or more than any other person. Principal Operators are rated differently than are Occasional Operators.
Property Damage (PD) Liability
Property Damage (PD) Liability is that part of liability insurance that, in an accident, pays for the damage to the other person's property. When you have Split Limits, PD Liability is the third figure; that is, for example, the $50,000 when your Limits of Liability are $100,000 ⁄ $300,000 ⁄ $50,000.
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Rental Reimbursement CoverageRental Reimbursement Coverage is an optional, and inexpensive, coverage in automobile insurance that provides up to a certain amount of money per day (such as $35) for a specified number of days (such as 30 days). Rental Reimbursement Coverage only applies if your policy has Comprehensive Coverage and Collision Coverage and you have a covered Comprehensive or Collision claim.
Replacement Cost
Replacement Cost is the cost to repair or replace lost or damaged property with new property (used for the same purpose) of like kind and quality. Contrast Replacement Cost with Actual Cash Value; the difference is depreciation.
Required Underlying Coverage
Required Underlying Coverage refers to those coverages in an Umbrella Policy (either a Personal or Commercial Umbrella Policy) which must be in force before the Umbrella Policy begins to pay for a covered claim
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Scheduled PropertyScheduled Property refers to your valuable items, such as jewelry, furs and fine arts, that are specifically identified in your policy and for which you often obtain appraisals. There are significant advantages to having Scheduled Property when claims are filed for such valuable articles.
Second Named Insured
The Second Named Insured is the policyholder, if any, whose name appears second on the Declarations Page of the policy. The Second Named Insured lacks certain rights that exist only for the First Named Insured. Thus, if the Declarations Page reads John Doe and Mary Doe, then Mary Doe is the Second Named Insured.
Special Limits of Liability
Special Limits of Liability are specific dollar limits that are applied in property insurance to various items which are easily transported. Examples include $200 for money; $1,500 for theft of jewelry; and $500 for business property located at the residence premises of an insured.
Split Limits
Split Limits refers to liability insurance that provides a different sum of money, per accident, for which you are legally liable (a) for the bodily injury of any one person; (b) for the bodily injury of all people collectively; and (c) for the property damage of others. For example, if your policy has Split Limits of $100,000 ⁄ $300,000 ⁄ $50,000, then upon an accident for which you are legally liable, your policy will pay up to (a) $100,000 for the bodily injury of any one person; (b) $300,000 for the bodily injuries of everyone injured in the accident; and (c) $50,000 for the property damage of others. Contrast Split Limits with Combined Single Limits.
SR-22
An SR-22 is an insurance form that certifies the holder has at least the minimum automobile liability limits required by that particular State. An SR-22 is analogous to Maryland's Form FR-19.
Subrogation
Subrogation occurs when you assign to your insurance company your right to collect money from another party. Subrogation occurs in automobile accidents when your insurance company pays to fix your vehicle but you (and your insurance company) argue that the other driver is at fault. If the other driver's insurance company ultimately does pay to fix your vehicle (by reimbursing your insurance company), then the subrogation has been successful.
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Towing/LaborTowing/Labor is an optional, and very inexpensive, coverage in automobile insurance that provides towing and emergency roadside assistance. Towing/Labor Coverage usually only applies if your policy has Comprehensive Coverage and Collision Coverage and you have a covered Comprehensive or Collision claim.
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Umbrella PolicyAn Umbrella Policy (either Personal or Commercial) provides additional liability coverage to you or your business above and beyond your automobile, homeowner, condo owner, business owner, business automobile, and workers' compensation liability insurance. An Umbrella Policy, which is an optional (but not expensive) policy, often fills "gaps" in your insurance program.
Underinsured Motorist Coverage (UIM)
Underinsured Motorist Coverage (UIM) applies when another driver, who is legally liable for an accident, causes bodily injury and/or property damage to others in an amount which exceeds the Limits of Liability of such at-fault driver. In that case, the person who is not-at-fault can use his Underinsured Motorist Coverage (UIM) to pay for the bodily injury and property damage up to an amount which equals the difference between (a) the not-at-fault driver's Limits of Liability and (b) the at-fault driver's Limits of Liability.
Uninsured Motorist Coverage (UM)
Uninsured Motorist Coverage (UM) applies when another driver, who is legally liable for an accident and who does not have any insurance, causes bodily injury and/or property damage to others. In that case, the person who is not-at-fault can use his Uninsured Motorist Coverage (UM) to pay for the bodily injury and property damage up to his Limits of Liability.
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Vehicle Identification Number (VIN) (also known as the Serial Number)The Vehicle Identification Number (VIN) (also known as the Serial Number) is listed on the title and registration of every vehicle. The VIN, which is also located in several places on the vehicle itself, contains 17 characters (numbers and letters). The first 10 characters indicate the vehicle's country of origin, year, make, model, body style, engine type, and assembly plant. The last 7 characters are unique to that vehicle.
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Waived PIP (also known as Limited PIP)Waived PIP (or Waived Personal Injury Protection) means that the policyholder has elected to reject (or waive) an amount of coverage (generally $2,500 per person per accident) for medical expenses and lost wages that results from an accident. Only the First Named Insured can waive PIP. When a First Named Insured does waive PIP, it usually waives PIP for every other licensed driver in the household.
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