Vehicle Insurance Terms And Definitions
In order to deal with your insurance agent or insurance company in a better way you should know the general insurance terms. You need not undergo any kind of formal training to get the insurance related terms into your head.
Let's take a look at the glossary of vehicle insurance terms and definitions.
1) Adjuster - The person, who is hired by the insurance company, is responsible to investigate the insurance claim. After thorough evaluation, he settles the claims of policy holder.
2) Appraisal - It is process of evaluation of damages caused to vehicle by an accident as well as the value of covered loss. This estimation is done by a third person (may be a specialist who repairs vehicle).
3) Assigned Risk Plan - Sometimes the insurance companies do not sell policy to those drivers who have poor driving records. In such situations, these drivers are assigned insurance companies who are ready to provide policies for them at higher rates.
4) Binder - A temporary agreement that takes care of insurance coverage in case of an accident until a permanent policy is ready to be issued.
5) Bodily Injury Liability - It is a type of a coverage that enables you to pay for medical expenses incurred to a person whom you injured in an accident.
6) Cancellation - The act of termination of an insurance policy either by insurance company or the person insured before its expiration date.
7) Claim - A request by policy holder to an insurance company to cover the losses incurred after an accident as per the terms and conditions of the policy. And the person who makes the claim is called 'claimant'.
8) Collision Coverage - It pays for damages occurred to your vehicle in an accident. The insurance company pays for the repair after deducting some amount from the actual value of the vehicle.
9) Declaration Page - This page in your policy contains all the details of your policy such as your name, address, expiration date, amount of premium and coverage amount, deductibles, and vehicle identification number of the vehicle(s) covered etc.
10) Deductible - The policy holder must pay a certain amount to the insurance company before the company pays him/her for the losses covered.
11) Endorsement - It is a written agreement that comes with the insurance policy and can change the policy terms by increasing or decreasing coverage amount.
12) Exclusions - A provision in the policy that limits or denies the coverage for certain accidents that occur under specific situations. It can also be denied for certain person, medical conditions or perils.
13 ) Free Examination Period - Also known as Free lock period, it is a time frame within which the insured can cancel the policy for any reason. Generally, it varies from 10 to 30 days.
14) Insured - The person who is covered by an insurance policy in case of an accident or loss.
15) Insurer - It is an insurance company that issues insurance policy and is responsible to cover the losses.
16) Limits - The benefits that an insurance company agrees to pay under the policy in case of any loss.
17) Premium - It is the price paid by the insured for an insurance policy to an insurance company.
18) Property Damage Liability - The coverage for any damages caused to a person's property in an accident occurred due to your fault.
19) Subrogation - It is process of assigning the legal right to recover the amount of loss to your insurance company. The company then ask another party, which is legally liable, to pay for the loss.
20) Underinsured and Uninsured Motorist -
Underinsured Motorist covers for bodily injury losses for you and your fellow passengers in case you are hit by any motorist who is at fault and does not have enough insurance to cover your claims.
Uninsured Motorist covers for you and your fellow passengers if you are hit any motorist who is at fault and does not have any kind of insurance policy.