Coverage

These are the benefits and protection provided by the insurance company to a policyholder, from an insurance contract. These benefits may differ from one insurance company to the other, but may have similar underlying principles. A good example of an auto insurance coverage is the collision coverage.

Sometimes, the protection provided by the insurance company may depend on the terms of policy of the insurance company and state law and custom, as well as the regular payment of premiums and deductible by the insured.

Benefits and/or protection may be lost or reduced if the insured is no longer an active policyholder or fail to pay the required deductible on the event of an incurred loss, or if he discontinue with the policy e.g. if he sells the car or vehicle to an individual who may not continue with the policy, leaving him having no car that he makes use of, or under his control.

Conversely, if the car or vehicle is sold to someone who continues with the policy then the insurance coverage may likely continue. But this may fully depend on the insurance company under which the car is insured. If that is the case, collision coverage or the comprehensive coverage of the car may be directed to the new car owner.

Collision Damage

As the name implies, this is simply the loss or damage caused by collision of two or more moving vehicles. The damage caused by collision is one of the major concerns of auto insurance companies.

This damage can be covered under a special auto insurance field called the collision coverage, whose benefits can be enjoyed by the policyholder of the insurance company.

The damage caused by collision is one key problem that can be successfully addressed by reliable, reputable auto insurance companies to the benefit of their policyholders.

Whenever there is collision related damage, policyholders can send a notice of claim to the insurance company, which will eventually be resolved under the collision coverage policy, undertaken by the insurer or insurance company adjuster.

Collision

This is the action of two or more moving cars, vehicles hitting each other, or object. It is the physical contact of a vehicle with another or other physical object e.g. a building, pole etc. There is an increasing number  of vehicle collision, resulting in car damage, thereby causing an incurred loss.

Most auto insurance companies have a special coverage for vehicle collision that can be enjoyed by the policyholder of the insurance company. The collision of cars and vehicles can best be covered under collision coverage of auto insurance policy.

The collision coverage for vehicle collision can be determined by the insurer policy limits as well as that of the cost of collision damage. Car collision can be reimbursed by a claim as demanded by the claimant under the insurance terms of policy.

Carrier

This is the insurance company that underwrites or issues insurance policy to policyholders, but in terms of auto insurance, it may be called an auto carrier.

There are many insurance companies worldwide and have their own method of operation according to local law and custom, and economic level of the state or country at large.

The term carrier is referred to the insurance company because it is the insurance company that actually carries the risks for the policyholder.

Casualty

This refers to the loss or liability of the insured resulting from an accident, damage, storm etc.

The policyholder can then be compensated for the incurred loss of the car from such incident. This is usually done as a claim and carried out by the adjuster.

It is often one of the major causes of a claim by the policyholder. When there are more casualties, there will likely be more claims.

Conversely, when there are few casualties, there will most likely be few claims. But this is mainly based on the policyholder qualification of the conventional liability coverage and the policy terms of the insurer.

Competitive Estimate

In the auto insurance sphere, this means the request made by an insurance company to a policyholder to submit more than one repair estimates to meet his/her needs. This may involve the total estimates of repair involved.

This usually happens when there is an automobile damage resulting in incurred loss which requires some major of repair.

The policyholder should be sincere and accurate in all details which will be filled in the estimate form and later be submitted to the insurance company.

When an insurance company request for repair estimate to be submitted, the policyholder should comply and do so accordingly without any further delay.

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.