Atlanta Car Insurance Glossary

B | C | D | E | F | G | H | I | J | L | M | N | O | P | Q | R | S | T | U | V | W

Accident: A sudden fortuitous event. Often used to refer to a collision or insurance event.

Accident Forgiveness: In most states, customers who have not had an at-fault accident in the previous five years qualify for this program. Accident forgiveness means that some insurance carriers won't add a surcharge to your premium after your next at-fault accident.

Accident Frequency: The number of times an accident occurs. Used by actuaries to predict losses and appropriately base premiums.

Accidental Death Benefit (ADB): A supplementary life insurance policy benefit that provides a death benefit in addition to the policy's basic death benefit if the insured’s death occurs as the result of an accident.

Act of God: Natural occurrence beyond human control or influence. Such acts of nature include hurricanes, earthquakes, and floods.

Actual Cash Value: The fair market value of property; technically, replacement cost less depreciation.

Actuary: A statistician who computes insurance risks and premiums. Actuaries keep insurance carriers profitable and financially stable by setting prices, assessing trends, and determining how much to hold in reserve to pay claims

Additional Insured or Additional Interest: A person or an organization, other than the named insured or covered person, who is protected under the named insured's auto policy. If an auto is leased, the leasing company may want to be listed as an Additional Insured as well as a lien holder or loss payee. This protects the leasing company if it's named in a lawsuit for an accident caused by a policyholder.

Adjuster: See Claim Adjuster.

Adverse Carrier: Term used to refer to the other party's insurance company.

Adverse Selection: The tendency of those exposed to a higher risk to seek more insurance coverage than those at a lower risk.

After-Market Parts: Parts or accessories that are not a part of the original factory installed parts.

Agent: An individual who acts as a representative for the company and sells insurance, usually on a commission basis. This individual could be an 'exclusive' or 'non-exclusive' agent.

Agreed Price: The price or cost of repairs agreed to by the Auto Damage adjuster or independent appraiser and the body shop representative.

Amendment: A change to the basic policy contract. An amendment alters the policy; an endorsement adds to it.

Appraisal: Process that determines the value of property, or the extent of damage, usually performed by an impartial expert.

Arbitration: A process of settling a dispute through an impartial party. It is used as an alternative to litigation.

Assigned Risk: A driver or vehicle owner who cannot qualify for insurance in the regular market. He or she must get coverage through a state assigned risk plan which specifies that each company must accept a proportionate share of these drivers/owners.

Assured: Means the same as an insured, policyholder, or someone who has an insurance policy.

At-Fault: The party that is legally liable for the damages in an accident.

Auto Damage Adjuster: The auto damage adjuster is responsible for writing the repair estimate for your vehicle. This adjuster will also answer your questions about the repair process, your rental vehicle, or your total loss settlement.

Auto Repair/Claim Repairs: Insurance carriers have programs that maximize convenience when you have an auto insurance claim. It allows you to complete your vehicle's repair process at one location. Some CarInsurance.com carrier's claims adjusters are on site to facilitate the repair process. Rental vehicle arrangements are available on-site through a rental car agency.

Automobile Insurance: A form of insurance that protects against losses involving autos. Auto insurance provides protection from losses resulting from owning and operating an auto. The insurance covers losses to the insured's property and losses for which the insured is liable as a result of owning or operating an auto. (See Car Insurance)

Automobile Insurance Plans: The name for "assigned risk" plans. These are plans set up and monitored by the state to help people who are unable to secure auto insurance through standard insurance carriers. See Assigned Risk.

Automobile Insurance Premium Discounts: A discount offered to drivers for such safeguards as air bags, seat belts, good driving record, anti-theft devices, multiple vehicles, training courses, good grades, group membership, employment or degrees, pre-purchasing, low mileage, and renewal or prior insurance.

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Basic Auto Policy: Although still used today to insure substandard risks, two-wheel motorized vehicles, and commercial autos, the Basic Auto Policy has been primarily replaced by the Personal Auto Policy, which combines both physical damage coverage and liability insurance for claims arising out of the ownership or use of a vehicle.

Binder: A temporary agreement declaring that the policy is in effect. Used in certain cases to protect a policyholder when it is not possible to issue or endorse the policy immediately.

Blue Book: A publication used for the determination of values for used automobiles and trucks.

Bodily Injury: An injury sustained by a person.

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Cancellation: Termination of an insurance contract before the end of the policy period, by the insured or insurer.

Car Insurance: A form of insurance that protects against losses involving cars. Car insurance provides protection from losses resulting from owning and operating a car or vehicle. The insurance covers losses to the insured's property and losses for which the insured is liable as a result of owning or operating a car.

Carrier: The insurance company or insurer.

Catastrophe: A disaster affecting a specific geographic area. Catastrophes often cause injury or even death; most result in extensive property damage. Hurricanes, floods, tornadoes, and even large hailstorms are typical examples of catastrophes.

Certificate of Financial Responsibility: Depending on the state and Motor Vehicle requirement, this is a form certifying that specific coverage has been purchased to meet the state's Financial Responsibility laws. This could be an SR-22, FR-44, SR-50, or any other State Requirement certification form.

Certificate of Satisfaction: A form signed by the insured when he or she takes delivery of the car from the repairer. It certifies that he or she is satisfied with the vehicle operations, appearance, and visible quality of the repairs.

Claim: Any request or demand for payment under the terms of the insurance policy.

Claim Adjuster: A person responsible for investigating and settling a claim.

Claimant: Individual or entity presenting a claim.

Clause: A section in an insurance policy that explains, defines or clarifies the conditions of coverage.

CLUE┬« Report: Comprehensive Loss Underwriting Exchange (CLUE) report; provides claim history information.

Combined Single Limit: Bodily Injury and Property Damage coverage expressed as one single amount of coverage.

Commercial Lines: Products designed for and bought by businesses. CarInsurance.com offers Business Auto Policies and Commercial Auto Policies.

Commission: That portion of the premium paid to the agent as compensation for the agent's services.

Comparative Negligence: A doctrine of law that, in some states, may enable claimants to recover a portion of their damages even when they are partially at fault, or negligent. Each party's negligence is compared to the others and a claimant's recovery can be reduced by the percentage of his or her own negligence.

Competitive Auto Repair Parts: Parts made by a company other than the manufacturer of the auto. Parts meet or exceed the quality of the manufacturer's parts, but cost less. Most insurance carriers guarantee these parts for as long as you own the car.

Competitive Estimate: A term used when an insurance company requests that you submit multiple repair estimates for consideration.

Conditions: The portion of the insurance contract which outlines the duties and responsibilities of both the insured and the insurance company.

Continuous Coverage or Continuous Liability Insurance: Continuous coverage refers to the length of time you have maintained insurance on your vehicle.

Contract: A legal agreement between two parties promising a certain performance in exchange for a certain consideration.

Contributory Negligence: A doctrine of law that, in some states, may prevent claimants from recovering any portion of their damages if they are even partially at fault, or negligent.

Coverage: Protection and benefits provided in an insurance contract.

Covered Person: This refers to the individuals (named insured, spouse, resident relatives, etc.) insured under a policy contract.

Customized Equipment/Special Equipment: Items not included in standard insurance options available for cars. These may include extra electronic equipment, special paint or exterior items, or amenities added to the inside of a van or truck.

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Damage: Loss or harm to a person or property.

Declaration Page: That page of the insurance policy which lists the insurance company, its address, name of the policyholder, starting and ending dates of coverage, and the actual coverages given in the contract, including the covered locations and amounts.

Declarations: The part of your policy that includes your name and address; the property that is being insured, its location and description; the policy period; the amount of insurance coverage and the applicable premiums.

Deductible: Usually, a dollar amount the insured must pay on each loss to which the deductible applies. The insurance company pays the remainder of each covered loss up to the policy limits.

Defensive Driver Course: These are classes either offered through or approved by Departments of Motor Vehicles to enhance driving skills. These courses may make drivers eligible for discounts on their premiums. Courses taken for traffic school because of a moving violation are not eligible.

Defensive Driver Discount: Certain drivers (usually over age 50) who have voluntarily taken a defensive driving course may qualify for this discount on their auto insurance premiums.

Depreciation: The decrease in value of any property due to wear, tear, and/or time. Generally, depreciation is not an insurable loss.

Discount: A reduction in your premium if you or your car meets certain conditions that are likely to reduce the insurer's losses or expenses. For example, auto insurance discounts are given for cars with auto theft devices and for drivers and passengers who use seat belts.

Drive-Other-Car Endorsement: Optional coverage that broadens the definition of a covered auto to include non-owned vehicles the insured person operates.

Driver Education: State accredited educational course that consist of at least 30 hours of professional classroom instruction.

Driver Training Discount: A discount for people who have taken an approved driver training course. This discount is not available in all states or for all individuals.

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Earned Premiums: The portion of premium that applies to the expired part of the policy period. Insurance premiums are payable in advance but the insurance company does not fully earn them until the policy period expires.

Economic Loss: Total financial loss resulting from the death or disability of a wage earner, or from the destruction of property. Includes the loss of earnings, medical expenses, funeral expenses, the cost of restoring or replacing property and legal expenses. It does not include noneconomic losses, such as pain caused by an injury.

Effective Date: The date that coverage begins on an insurance policy.

Emergency Road Service Coverage: Protection for problems that are not typically handled but your auto insurance, such as: being locked out of your car, towing not related to an accident, having a dead battery re-charged, inflating a flat tire, filling an empty gas tank. (Also referred to as Towing and Labor)

Endorsement: A document, which is attached to the policy and modifies or changes the original policy in some way.

Exclusion: Section of the insurance policy, which list property, perils, person, or situations which are not covered under the policy.

Experience Rating: Determination of the premium rate for an individual risk, made partially or wholly on the basis of that risk's own past claim experience.

Expiration Date: The date your coverage ends. There is usually a time of day associated with this date, for example, an expiration date of 5/1/2002 at 12:01am. This means your coverage ends one minute after midnight on the date listed.

Exposure: Possibility of loss. Insurance companies set rates based upon exposure.

Extended Non-Owner Liability: An endorsement that provides broader liability coverage for specifically named people operating any non-owned automobile or trailer. It covers non-owned autos, use of autos to carry people or property for a fee, and individuals driving employer-furnished cars who do not own vehicles themselves.

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Financial Responsibility Law: Financial responsibility laws require owners and operators of autos to maintain enough money to compensate those they injure. Liability insurance is the most common way to satisfy these requirements.

First Party Benefits: This pays policyholders and others covered by the policy in the event of injury, no matter who caused the accident. The benefits can include medical expenses, loss of income, funeral and death benefits. This may also be called Personal Injury Protection.

First Party Claims: A claim for damage, loss or injury made by an insured.

Flat Rate Cancellation: Termination of an insurance contract at inception. This policy is never in effect.

Forms: This can be any part of your insurance policy. This may be an SR-22 form or a policy form like your application, declaration page or policy jacket. Typically, all are available in Adobe's PDF format.

Fraud: A false statement intended to deceive the insurer and induce it to part with something of value or surrender a legal right. May void a policy.

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Gap Insurance: If you are making lease or loan payments and you experience a total loss, there may be a difference (gap) between the market value of your vehicle and what you still owe on it. This optional coverage pays the difference. Read our questions and answers section for more information.

Good Student Discount: May be awarded to full-time students who maintain a grade average of "B" or better. Each carrier has specific rules that may apply. When purchasing a CarInsurance.com policy, simply review the help next to our discount questions to see if you can get additional discounts.

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Hazard: Anything that increases the chance of an accident occurring.

Hit and Run: An accident caused by someone who does not stop to assist or provide information.

Homeowner's Insurance: Protects homeowner's from losses to their homes, personal property, and some types of damage or injury to others for which the homeowner is liable. Homeowner's insurance is subject to the terms, limits and conditions of your policy contract.

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ID Card: A card issued by your insurer containing basic information about your insurance policy. Some states require you to keep an ID card in your vehicle.

Inception Date: The date that coverage begins on an insurance policy.

Indemnification: The act of providing compensation for a loss with the intent to restore an individual or entity to the approximate financial position prior to the loss.

Indemnity: A principle of insurance which provides that when a loss occurs, the insured should be restored to the approximate financial condition occupied before the loss occurred, no better, no worse.

Insurable Interest: Exists when an individual would suffer an economic loss as the result of damage to property or bodily injury.

Insurance: Insurance is a system in which groups of people who have similar chances of suffering a loss transfer their risk of loss to an insurer who pools the risk of many people together. In exchange for payment of premium, the insurer promises to reimburse the person for their covered losses.

Insurance Fraud: The act of falsifying or exaggerating the facts of an accident to an insurance company to obtain payment that would not otherwise be made. Common types of insurance fraud are staged accidents, exaggerated injuries, and inflated medical bills.

Insurance Score: Confidential ratings used for underwriting in some states as a rating tool. It may include information about the consumer's payment history, the number of open accounts and if bankruptcy has been filed. It is a measure of how financial affairs are managed and does not include assets, income information or race information.

Insured: A person or organization covered by an insurance policy.

Insurer: An organization that provides insurance.

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Joint Underwriting Association/JUA: Insurers which join together to provide coverage for a particular type of risk or size of exposure, when there are difficulties in obtaining coverage in the regular market, and which share in the profits and losses associated with the program. JUAs may be set up to provide auto and homeowners insurance and various commercial coverages, such as medical malpractice

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Lapse in Coverage: A point in time when a policy has been canceled or terminated for failure to pay the premium, or when the policy contract is void for other reasons.

Legal Liability: Liability imposed by law, as opposed to liability arising from an agreement or contract.

Liability: Any legally enforceable obligation or responsibility for the injury or damage suffered by another person.

Liability Adjuster: The liability adjuster handles the investigation of the accident. These adjusters' responsibilities can include collision payments, property damage payments, and bodily injury settlements. In some states, these adjusters may also handle the medical portion of your claim.

Liability Insurance: Insurance providing money on behalf of the policyholder to pay because of bodily injury or property damage caused to another person and covered in the policy.

Lien holder: A person or organization with a financial interest in property up to the amount of money borrowed or still owed on the property.

Limit: The maximum amount of protection purchased by the insured for a specific coverage.

Limits of Liability: The maximum amount of insurance the insurance company will pay for a particular loss, or for a loss during a period of time.

Loss of Use: Compensation to a third-party claimant for financial consequences resulting from the inability to use property as the result of accident-related damage.

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Medical Payments Coverage: Pays medical expenses related to an automobile accident. This coverage is subject to the terms, limits and conditions of your policy contract.

Minimum Limits of Liability: The least amount of liability coverage that can be purchased, which is generally equivalent to the minimum amount required by state law. In determining rates, a carrier will use the basic limits to develop the base rates. If an insured person wants higher limits, the carrier applies an increased limits factor to the base rate in calculating the new premium for the increased coverage.

Misrepresentation: To make written or verbal statements that is untrue or misleading.

Motor Vehicle Record (MVR): A report from the agency that issues your driver's license, listing accidents and violations that appear on your driving record. This report is used to verify information provided by insurance applicants and policyholders.

Multi-car discount: A discount offered by some insurance companies for those with more than one vehicle insured on the same policy. In some cases, if you drive a company car insured by your company, your own insurance company may give you the multi-car discount.

Multi-line discount: A discount offered by some insurance companies for those with more than one line of insurance with the same company. In most cases it is home and auto together on the same policy.

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Named Insured: Any person, firm or corporation designated by name as the insured person(s) in a policy. Others may be protected by policy definition even though their names aren't on the policy, such as other drivers operating (with consent) the named insured's covered auto.

No-Fault Insurance: May pay for your medical treatment, lost wages, or other accident-related expenses regardless of who caused the accident. This coverage is subject to the terms, limits and conditions of your policy contract and is not available in all states.

Non-Renewal: When an insurer decides not to renew a policy at the end of its policy period.

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Occasional Driver: The person who is not the primary or principal driver of the vehicle.

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Per Person Limit: This refers to the cap amount an insurance company will pay for any one person's injuries arising from a single incident. In an automobile accident, it comprises bodily injuries sustained by each person. When Bodily Injury is purchased in split limits, the first limit is the "per person" limit: e.g. $100,000(per person)/$300,000(per occurrence)

Personal Auto Policy: The most common auto insurance policy sold today. Often referred to as "PAP," this policy is written in simple wording and provides coverage for liability, medical payments, uninsured/underinsured motorist coverage, and physical damage protection.

Personal Injury Protection: May pay for your medical treatment, lost wages, or other accident-related expenses regardless of who caused the accident. This coverage is subject to the terms, limits and conditions of your policy contract

Personal Property: Property that is not land or connected to land (real estate), such as furniture or jewelry.

Physical Damage: Damage to your covered vehicle from perils including (but not limited to) collision or upset with another vehicle object, fire, vandalism and theft. See our coverage definitions page for more information.

Physical Damage Coverage: Pays for damage to your car this could be through Collision Coverage or Comprehensive Coverage (Also referred to as Other Than Collision)

Policy: The written documents of a contract for insurance between the insurance company and the insured. Such documents include forms, endorsements, riders and attachments.

Policy Change: Any change made to your insurance policy during the period that the policy is in force.

Policy Lapse: A point in time when a policy has been canceled or terminated for failure to pay the premium, or when the policy contract is void for other reasons.

Policy Limit: The maximum amount a policy will pay, either overall or under a particular coverage.

Policy Period: The period of time in which a policy is in effect. (For example, six months or one year).

Policyholder: One who maintains ownership in an insurance policy. This may refer to the policy owner or those covered under the policy. See also Named Insured.

Preferred Risk: Any risk considered to be better than the standard risk on which the premium rate was calculated.

Premium: The price of insurance an insured person pays for a specified risk for a specified period of time.

Primary Insurance: Insurance that must be maintained as a condition of the most Personal Umbrella Policies. Primary insurance acts as the first layer of coverage on common types of losses. This usually includes auto, motorcycle and homeowner insurance, but may also include boat insurance, commercial liability or some other policy. Please check your insurance policy documents for more detailed information.

Primary Use: What your vehicle is mainly used for (pleasure, to and from work, business, commercial, or farm).

Principal Driver: The person who drives the car most often.

Pro Rata Cancellation: Termination of an insurance contract before the policy expiration date on which the premium returned to the insured person is adjusted in proportion to the amount of time the policy was in effect.

Proof of Loss: A statement made regarding the extent of the claim; it may be requested in accordance with the conditions of the policy.

Property Damage Liability Coverage: Pays for damage to someone else's property resulting from an accident for which you are at fault and provides you with a legal defense. This coverage is subject to the terms, limits and conditions of your policy contract.

Proximate Cause: An act or omission initiating an unbroken sequence of events resulting in injury to a person or damage to property.

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Quote: A statement of the premium that will be charged for insurance coverages based on specific information provided by the person requesting the quote including drivers, vehicles, and driving record.

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Reinstatement: The restoring of a cancelled policy to full force and effect. The reinstatement may be effective after the cancellation date, creating a lapse of coverage. Some companies require evidence of insurability and payment of past due premiums plus interest. They may also require a signed no-loss form.

Renewal: The process of keeping an active policy in force through the issuance of a renewal policy.

Renewal Date: The date that your insurance policy expires and the date that your renewed policy will begin.

Renter's Insurance: Insurance that provides protection from losses that arise out of the rental of a home. Protection covers losses to the insured's property, not to losses that occur as a result of owning a home.

Replacement Cost: The cost to repair or replace an insured item. Some insurance only pays the actual cash or market value of the item at the time of the loss, not what it would cost to fix or replace it. This will pay the full cost to repair an item or buy a new one to replace the damaged item.

Replacement Value: The full cost to repair or replace the damaged property with no deduction for depreciation, subject to policy limits and contract provisions.

Rider: In motorcycle insurance, a rider is someone who will operate the insured motorcycle. In life and health insurance, the term "rider" is often used to refer to an endorsement to an insurance policy.

Risk: The chance of suffering a loss.

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Safe Driver Plan: A rating system that assigns points for traffic convictions and certain accidents. Similar to a merit-rating plan, each point increases the surcharge percentage to the baseline rates.

Short Rate Cancellation: A policy termination in which the refunded premium is not proportional to the amount of time remaining in the policy period due to the fixed expenses incurred by the company. The insured will generally pay more for each day of coverage than if the policy had remained in force throughout the entire policy period.

Split Limit: Any insurance coverage with separately stated limits for different types of coverage. Example: an automobile liability policy of 100/300/50 provides a maximum of $100,000 bodily injury coverage per person, $300,000 bodily injury coverage per accident, and a property damage limit of $50,000 per accident.

SR-22: An SR-22 (CFR) is a certificate mandated by the state to verify that an individual is maintaining auto insurance liability coverage. If a person needs an SR-22 (CFR), they will usually be notified by their state's Motor Vehicle Department.

Subrogation: If your car is damaged because of another driver's negligence and you ask your insurance carrier to settle the claim for damage to your car, we will seek payment recovery (including your deductible) from the other party. This process of payment recovery is called subrogation.

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Term: The length of time for which a policy or bond is in force.

Total Loss: The condition of an automobile or other property when damage is so extensive that repair costs would exceed the value of the vehicle or property.

Towing and Labor Costs: This endorsement, which is added to the physical damage coverage, provides reimbursement up to a specified limit to tow your vehicle or pay for on-site labor costs.

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Umbrella Insurance: Provides high limits of additional liability coverage above the limits of your homeowner's and auto policy. In addition, it provides coverage that may be excluded by other liability policies.

Underinsured: The result of the policyholder’s failure to buy sufficient insurance. An underinsured policyholder may only receive part of the cost of replacing or repairing damaged items covered in the policy.

Underwriting: The process an insurer goes through to determine whether or not it will provide coverage for an applicant.

Unearned Premium: The portion of your premium remaining on your policy term. For example, with a six-month premium, at the end of the first month of the premium period, five-sixths of the premium is unearned by the insurance company.

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Vehicle Identification Number (VIN): A 17-digit number assigned to each vehicle manufactured in the United States after 1980. This number is used for identification purposes and is visible on the dashboard when viewed from the outside of the car. It indicates many identifiers including make, model, options, and year in official records (like a Social Security number for your car).

Void: A policy contract that for some reason specified in the policy becomes free of all legal effect. One example under which a policy could be voided is when information a policyholder provided is proven untrue.

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Waiver of Collision Deductible: This option pays your collision deductible when you carry collision coverage on a vehicle that is damaged by an uninsured or hit-and-run motorist who is at fault. Coverage applies only when there is actual physical contact and when you can identify the uninsured driver or vehicle.