Contract

In auto insurance terms, this refers to the agreement between two or more parties to achieve a common aim.

This can be seen from the agreement between the insurance company and the insured.

This is also evident in the agreement between the insurance company and the agent, with each party fulfilling the other's interest.

Combined Single Limit

As the name suggest, this refers to the amount (limit) of money an auto insurance company, based on the insurance policies, can pay as a liability coverage for both bodily injury and property damage.

The amount of coverage may differ from insurer to insurer, as this is based on the insurance terms and conditions as well as the policies of the insurance companies.

It is different from that of the split limit policy where the amount for liability payment limits of property damage and bodily injury are paid separately.

Coverage Forms

These are legal documents attached to an insurance policy, to put into effect the coverage of the policy, as provided by the insurance company.

These forms are really necessary for a good insurance coverage as it will determine the effectiveness of the insurance policy.

The endorsement form shows the legal and insured status of the policyholder as issued by the insurance company. Although, this may vary from policy to policy, and the insurance company as well.

Cancellation

This is the closure of an insurance policy at a date earlier than its normal annual expiration date. There are some reasons for cancellation. Here are two main reasons that call for the cancellation of a policy:

• The policyholder may not have enough money to pay for premiums. When this happens, the insured or insurer may decide to cancel the policy. 

• It may be due to the death of the insured. If the insured should loss his life as at the time his/her policy is in force, there may be a cancellation of the policy. 

Nevertheless, some insurance companies may continue with the deceased policy over the deceased next of kin for some period of time before finally taking the decision of legal cancellation.

Claimant

This is someone who gives a notice to an insurance company for an incurred loss. This is usually done for the main purpose of collecting a claim from the insurance company to cover or reimburse the incurred loss.

The insured will be covered with the claim as based on the terms and conditions of the insurance company.

In most times, the claim may be lost on the event of an incurred loss if the policyholder is no longer an active policyholder of the insurance company.

This is to motivate the policyholder to be regular in paying his premiums as this will be helpful in the event of an incurred loss.

It is reasonable for a claimant to submit a claim for incurred loss coverage as long as he/she is still an active policyholder of the insurance company.

Most often, the insurance companies do not offer claims to the insured or claimant unless on the event of an incurred loss. 

Collateral

This is an asset pledged to a creditor or lender as a security for a loan until the loan is paid. It can be in any form e.g. car, mortgage, land etc.

When there is a failure on the part of the borrower to pay back the loan, the lender may have the legal right to become the owner of the asset.

But when the borrower fulfils paying off the loan, the asset can then be fully granted him. They are usually pledged according to the loan lent.

Commission

This is the amount of money that an insurance company pays to an agent from the portion of the policy premium of the insured as a compensation for the agent's work.

The compensation may depend not just on the number of insured that subscribe or bought policy through the agent but the activeness of their (policyholders) insurance policy and the regular payment of their premiums.

Compensation varies from one insurance company to another, but the same principle of 'the more active policyholders, the more the commission of the agent' still apply.

Comprehensive Coverage

In this case, the payment for damage of the car is not as a reason of collision. Rather, the payment of the damage of the vehicle is as a result of other factors such as windstorm, vandalism, theft, flood, fire, explosion, hail etc

The car can not be comprehensively covered when there is a damage caused by collision. The damage can only be covered on the basis of other factors other than collision as mentioned above.

Collision Coverage

This is the amount of money the insurance company will pay to the policyholder for the damage of the car caused by physical contact with an external object or another vehicle.

The coverage is based on the agreed price and the terms and conditions of the insurance company which must be complied by the policyholder.

In most insurance companies, the coverage will only be paid if you are still an active policyholder of the insurance company.

Many insurance companies would also pay for the coverage of other vehicles involved in the collision if the collision is caused by the insured driver.

Claim

This is a legal request or notice by the policyholder to the insurance company, stating the need for an incurred loss to be covered.

Regardless of the insurance company there is always a claim by the policyholder when there is an incurred loss.

Normally, every insurance claim is made under the terms and conditions of the insurance company.

The process varies from insurer to insurer. The claim may most likely depend on the severity of damage and the amount of the incurred loss.

It may also depend on the type of policy the insurer holds as at the time of the incurred loss.

Broker Fee Agreement

In insurance terms, it means the contract agreement between the insured/policyholder and the licensed broker during the period of active insurance coverage.

Sometimes, this agreement may include the actual charges of the services of the broker for the insurance coverage of the policyholder.

All decisions and actions are mostly based on this agreement of the insurance policy. This helps in avoiding unnecessary disagreement and failures during the insurance coverage.

Broker-Agent

This is a licensed insurance specialist who acts as both a representative agent and a broker for one or more insurance companies.

They also ensure that the customers or policyholders get the best value for their insurance policy. They are like the middle man between you and the insurance company they represent.

They may also have to carry your complaint or feedback to the insurance companies in order to satisfy your insurance needs.

In addition, they may have to give or pass some updates of the insurance company to the policyholder during the time of which the policy is in force.

They need to be reasonable and be keenly interested in the affairs and needs of the insured. They need to be very conversant and familiar with the insurance field they represent.

Broker

In auto insurance terms, a broker simply refers to a marketing professional or consultant who represents one or more insurance companies.

They take appropriate steps and procedures to ensure the insurance customer or policyholder get the best value or auto insurance coverage.

They are primarily there to working hand in hand with companies and agents to give the best value to all active policyholders.

Blue Book

This refers to the printed book or writing of auto insurance. It is primarily used for the purpose of determining the actual market value of fairly used cars and trucks that have auto insurance coverage.

The value of the automobile or car as determined by the book is the same as that computed and indemnified to the policyholder for an accident resulting in the damage of the car or truck.

The blue book often helps in keeping the right record and value of the insured car or truck. The book is always safely kept for future references in the event of an accident resulting in car damage.

Binder

Temporary agreement stating that the auto insurance policy is under effect but may not necessarily is the case.

This agreement is based on the contract both of the policyholder and the insurance company which may not have taken into effect.

When a policy cannot be endorsed immediately, the binder is used to protect the policyholder until the insurance policy has fully gone into effect.

Bodily Injury Liability Coverage

This is also auto insurance policy coverage for the policyholder in the event of car accidents causing bodily injuries for the driver and others involved e.g. passengers and/or pedestrians.

In most cases, the coverage includes the income lost as a result of the accident and even up to medical bills for the victims having the coverage.

There are much benefits of having coverage of bodily injury. One major reason is the reduction of medical expenses.

Normally, all medical expenses of an accident resulting in bodily injury are assumed to be the primary responsibility of the victim (s) or his/her guardian.

Coverage for bodily injury can be accessed based on the severity of injuries sustained during the cause of the accident and the medical bills involved for such injuries.

As already noted, injuries can be sustained by others not in the vehicle e.g. pedestrian which may result in a legal case against the driver.

In this case, the coverage may also be used to cover the costs of any legal defence involved when the driver is actually found guilty for the injuries sustained by the victims other than him.

Bodily Injury

This is an unexpected damage or injury to the body of the car driver and/or passengers, pedestrians etc resulting from an accident, storm, wind, or any other form of casualty.

Sometimes, this could be due to negligence on the part of the car driver. Proper care should be taken by car drivers when they are driving on the road.

It could also be the result of negligence on the part of other drivers on the road. Having bodily injury liability coverage should be expected on the part of drivers.

Assigned Risk Plan

Auto insurance plan managed by the state and mostly for individuals and car owners who cannot afford to obtain or qualify for auto insurance or conventional liability coverage due to financial insufficiency or poor insurance record.

They may be placed in residual market in order to get an insurance policy with carriers or insurer but for a higher price. Their coverage is through the state.

Agreed Value

This is the value of the vehicle agreed on by the insured and the insurer which will be paid out on the event of an accident or any other form of unforeseen damage.

It is a policy available mainly for custom vehicles or collectible which actual value remains the same over time without depreciating.

Agreed Price

This is the cost of repairs of damage to property as agreed upon by the adjuster and the corresponding representative of the body shop. Whenever an incurred loss occurs resulting in an accident to a car, the cost of repair agreed on will be used as a claim to the claimant.

The cost neither increase nor decrease as the price for any resulting damage for the car has already been agreed upon.

Agent

He is a licensed insurance representative who sells insurance for an insurance company, negotiating and/or effecting insurance contracts. He serves as the middle man in providing quality insurance service to the policyholder.

Insurance agents usually carry out their work on a commission basis and in most cases they are non-exclusive or perhaps exclusive agents.

Additional Insured

It is an individual or organization who also has an auto insurance protection under the primary name insured auto policy. The protection may be extended form an auto leasing company to an individual who lends a car (s) to the primary insured.

In the event of an accident, damage or collision, the leasing person or company has protection against the specific casualty caused by the name insured.

Appraisal

It is a formally written document of the estimation of the value of property of the insured. This is done as against any future casualty resulting in the loss of property.

When an appraisal is eventually damaged, it can be completed or replaced by the adjuster of the insurance company or sometimes a vehicle repair expert.

Accident Frequency

This refers to the number of times there occur an accident. The frequency is calculated during the time of the insurance policy. The actuary normally computes the frequency of accidents to help determine possible losses.

It should be noted that the phrase may not actually mean the number of times or frequency an accident really does occur but the number of times an accident may occur due to the prediction of the actuary. Premiums can also be accurately and appropriately paid using this principle.

Actuary

This is a specialist who computes premiums and risks of insurance. They are duly involved in the calculation of loss reserving, life expectancy and determining accident frequency. They serve as one of the key ingredients in an insurance company.

They also primarily help in the profit making and financial stability of carriers (insurance companies) which they serve and involved in trends assessment as well as determining insurance prices.

These specialists also have a share in managing the carrier's expenditure and the giving of claims to claimant on any needed basis. They help in ensuring that neither the carrier nor the insured suffer unnecessary loss.

Accident

This is an unplanned, unforeseen or unintended event beyond the control of an insured, resulting in the loss of property (ies) e.g. car. The incurred loss can be compensated as a claim to the claimant by the carrier. The claim is based on what is observed and the actual cash value of the car or items involved.

Auto insurance companies try in the best of their abilities to supply sustainable, efficient, quality, and affordable policy coverage to their policyholders. They also aim at increasing the savings of their insured to meet specific needs e.g. building a big collection of policyholders.

Adjuster

Also known as claim adjuster, he is an insurance company worker who is primarily responsible for investigating and settling all claims as demanded by claimants who are under the insurance policy.

He has the responsibility of evaluating and paying the available claim to the policyholder. The payment of claim by the adjuster is only carried out after all proceedings are verified. They are majorly concerned with the reimbursement of losses.

The claims that are settled by the adjuster may be determined by the terms of policy, policy limits, or the premiums or deductible of the insurance company. The adjuster offers his service according to the policies of the insurance company.

The claim that is offered by the adjuster is tantamount to the total amount of loss suffered by the policyholder for a complete reimbursement.

Actual Cash Value

It means the actual price of the item during the event of a casualty such as fire, flood, accident, damage, collision, etc. In this case, the claimant submits a claim to the right adjuster in order to counterbalance the incurred loss caused by the specified casualty.

The claim that will be used to indemnify or reimburse the claimant over the damage or whatsoever of his property will mostly be determined by the exact market value of the item involved. This is to ensure the complete and correct or adequate compensation to the claimant.

The process also includes a proper review of the car, including the glass, tiers, the body, and some other equipment and appliances. The compensation of the car may be in the form of cash or a replacement of the car by another of the same value.

The principles and laws involved in the process may vary from place to place. The method of compensation to the payee may depend on the insurer (insurance company) of the policyholder (the person having the auto insurance) and /or the condition as at the time of the incurred loss of the property involved.

A claimant, after being compensated, may decide to continue on the premium of his item to the insurer or stop or switch to a completely different insurer.

What Is Auto Insurance?

It is a 'policy' between an individual and the carrier or insurance company to indemnify the insured or individual against any casualty to his/her 'automobile' resulting from accident, theft, collision, natural disasters etc. 

It is most important to get the right auto insurance policy. Much useful information can be found on this blog to help you get the one that's best for you. Perhaps that's why you are here.

Getting an auto insurance policy can help reduce much loss resulting from the above mentioned casualties. 

It may help counterbalance any loss from any form of casualties. Try getting the right one for your automobile from reliable auto insurance companies.

The policyholder can decide for himself whether to pay collision coverage and/or comprehensive coverage. This fully depends on the carrier and/or his ability and qualification. 

He may also have to decide for himself on the method of payment that is best for him. He may opt in paying a deductible sum on a monthly basis, every two months, quarterly, every four months, every six months, or even on a yearly basis or more.

Take your time to search for the right auto insurance to cover your auto policy. Doing this will most likely leads to a long lasting insurance policy that can boost your credibility and can help increase your indemnity against any future damage to your automobile insurance policy.

When an accident or any other form of casualty should occur, the deductible and/or premium paid can be used to compensate the insured. 

The insured or policyholder can make a claim for the incurred loss or damage of the automobile resulting from a casualty (e.g. fire, accident, flood etc). The claim is then used to restore the insured to a better condition that he previously were.