Complete List of Auto Insurance Policy Terms

A Complete List of Auto Insurance Policy Terms

 

Accident

A collision of a vehicle with any object, for example, another vehicle, a fence or tree.

Accidental Death Benefit

A death benefit pays if bodily injury causes the death of you or any family member within 24 months from the date of a covered accident.

Anti-theft Devices

A device that deters a vehicle from being stolen, for example, a car alarm or a special key for the ignition. Cars with hood locks and ignition alarms can save up to 15% comprehensive premiums.

At Fault Accidents

A driver presumed to be more than 50% responsible for an accident is considered to be “at fault” and his/her insurance premium is adjusted accordingly. In accident cases where a driver is “cited” by the police, that driver is automatically presumed to be “at-fault”.

Auto Policy Discounts

You could pay a lower premium on your auto insurance policy if you qualify for any of several discounts offered Electric Insurance. Scroll to find the definitions for Anti-theft Device, Driver Training, Defensive Driver, Good Student, Multi-Car, and Safe Driver Discounts.

Basic Reparations Benefit

An optional coverage that covers you, the members of your household and your passengers for medical expenses, rehabilitation services, lost wages and funeral expenses caused by auto accidents. Coverage and availability varies by state and is not available in all states.

Bodily Injury Liability

Pays damages awarded if you are held legally responsible for injury or death caused by a vehicle driven by you or by a covered family member. Single Limit Liability and Split Limit Liability.

Collision Coverage

Covers the physical damage done to your car because of a collision with another vehicle or object, regardless of who is at fault. Collision does not cover bodily injury or property damage liability — it protects your vehicle only, and is usually subject to a deductible.

Comprehensive Coverage

Sometimes called “Other than Collision,” Comprehensive Coverage pays for damages resulting from fire, theft, vandalism, falling objects, hailstorms, floods, and various other perils. For example, hitting a deer can cause a lot of damage to your car-comprehensive takes care of it. Loss of auto glass or windshield is also covered under Comprehensive.

Comprehensive Loss

Any damage done to a vehicle that is caused by something other than a collision. This includes damage to the vehicle by theft, vandalism, fire and flood. Glass loss is a comprehensive loss.

Declarations Page

The declarations page tells you who and/or what is covered by the insurance, the amount of coverage purchased and the conditions-the “when” and “where”-covered by the purchased insurance.

Deductible

This is the amount you agree to pay out of your own pocket before the insurance company reimburses you for damage expenses. If you had an accident with damages totaling $1,700, and carry a $350 deductible on your collision coverage, you would pay the first $350, and the insurance company would cover the difference, the remaining $1,350. Raising the amount of your deductible saves you money on the cost of your insurance.

Defensive Driver Discount

In some states, individuals who successfully complete an authorized defensive driver course are eligible for further credits.

Direct Writer

An insurance company that offers its policies directly to consumers through its own employees is called a “direct writer.” Electric Insurance is a direct writer.

Driver Training Discount

Safety is the first rule of the road. To encourage good driving habits in young people, drivers under 21 who complete a driver-training course can often save up to 15% on their insurance premiums. Discounts vary by state and are typically good for 2-3 years.

DUI

Driving Under the Influence.

DWI

Driving While Intoxicated.

Financial Responsibility Clause

In your insurance agreement, the financial responsibility clause shows that your policy conforms to state financial responsibility requirements.

Financial Responsibility Required

Drivers in most states are required by law to demonstrate their ability to pay for bodily injury or property damage for which they are responsible. In most cases, this “financial responsibility” is fulfilled by purchasing insurance with limits of liability equal to or greater than the amounts required by the state. In some states, you must carry proof of financial responsibility, in the form of an insurance policy, before you can register a vehicle.

Full / Limited Tort Threshold Options

Limited Tort, if selected, applies to the named insured and other household members. The tort threshold determines when an insured may sue for damages. While Full Tort, if selected, does not put a limitation on when an insured may sue for damages.

Funeral Expenses

Funeral or burial expenses actually incurred if “bodily injury” causes an “insured’s” death within 24 months from the date of a covered accident.

Garaging Location

When is a garage not a garage? In this case, it refers to where you usually keep your car when you’re not driving it, whether in a building or not. If you normally keep your vehicle in a town other than the one you live in, you must notify your insurance company.

Good Student Discount

Since studies have proven a link between good grades and good, safe driving, some insurance companies offer reduced premiums to students with high scholastic ratings. To be eligible for reduced premiums, simply provide Electric Insurance with a recent transcript showing a B average or better. Good Student discount regulations vary among states and the discount is not available in all states.

Limit of Liability

The ceiling set on the amount an insurer will pay for a loss. See Single Limit Liability and Split Limit Liability.

Livery Use

This is use of a vehicle to carry passengers for a fee, as in a taxicab or a rented limousine. Unless specified in your policy, livery use is not covered by your auto insurance. Carpooling is not considered livery use.

Medical Payments / Personal Injury Protection

Covers you, the members of your household and your passengers for medical and funeral expenses resulting from an auto accident, regardless of who is at fault. Personal Injury Protection is not applicable in all states.

Motor Vehicle Record (MVR)

Your state’s record of your auto accidents and/or traffic violations. Your insurance rates are based on, among other factors, the quality of your driving history-a good record can mean lower rates! When you accept a policy with Electric Insurance, for example, Electric Insurance uses your driver’s license number to review your MVR for claims, losses and violations you may have had in the past five years.

Multi-Car Discount

If you have more than one car insured with Electric Insurance, you probably qualify for a 20% discount (available in most states)!

No Fault

See PIP (Personal Injury Protection)

Other than Collision

See Comprehensive Coverage.

Ownership

The Personal Auto Policy covers cars owned by an individual, or a husband and wife residing in the same household. These requirements exclude coverage for cars owned by businesses or groups of people.

Personal Injury Protection Deductible

Deductible Under your Personal Injury Protection (PIP) coverage, you may have the option of choosing a deductible or co-payment amount. These are amounts that you would pay out of pocket (in exchange for a reduced premium) before you were entitled to any recovery payment under your PIP coverage. These options are not available in all states.

Personal Injury Protection (PIP)

Waiver of Work Loss Under the Personal Injury Protection coverage, selecting Waiver of Work Loss will eliminate coverage for any work loss due to the covered accident. You may waive the Work Loss coverage only if you and your resident spouse (if applicable) have not received any earned income from wages during the thirty-one days prior to your policy’s effective date and none is expected in the next one hundred eight days. (This waiver applies only to the named insured and resident spouse. All other covered persons will be entitled to basic PIP benefits for Work Loss). This option does not apply to all states with Personal Injury Protection coverage options.

Property Damage

Damage to the property of others, including loss of use, caused by your car or another person’s car driven by you or a family member.

Rental Reimbursement

An accident shouldn’t leave you stranded without transportation. Rental Reimbursement coverage helps pay for the cost of a rental vehicle while yours is being repaired. In most states, coverage options range from $20/day up to $50/day. This coverage is optional. When you carry physical damage coverage for theft, you may be entitled to reimbursement of rental expenses if your car is stolen even if you don’t carry Rental Reimbursement Coverage. Also called Transportation Expense Coverage or Substitute Transportation.

Safe Driver Insurance Plan

To encourage safe driving-and penalize unsafe drivers-most states assign “points” to traffic violations and certain accidents. Each point adds a percentage surcharge to your insurance policy. Specific surcharge guidelines vary by state.

Single Limit Liability

Insurance policies covering both bodily injury and property damage can be limited in two ways. A single limit liability has one limit for both injury and property damage combined. For example, if a policy had a $60,000 liability limit, the maximum amount the policy would pay for the total injury and property damage would be $60,000.

Split Limit Liability

A split limit liability policy has separate limits per person and per accident for bodily injury, and a per accident limit for property damage.

Stacked / Non-Stacked Uninsured / Underinsured Motorist

When Stacked Uninsured/Underinsured coverage is selected, the limits of coverage available for Uninsured Motorists Coverage are the sum of limits for each motor vehicle insured under the policy. For Non-Stacked Uninsured/Underinsured coverage, the maximum limit of liability for each covered accident is the limit of liability shown in the Declarations Page, regardless of the number of vehicles or premiums shown in the Declarations Page.

Standard / Conversion Underinsured Motorist

Standard Underinsured Coverage (UIM) coverage is usually reduced by amounts paid by workers’ compensation, or by or on behalf of the person at fault. Conversion Underinsured Motorist (UIMC) is not reduced by payments from any source. Both Standard (UIM) and Conversion (UIMC) coverages only become available after the liability insurance of the at-fault person has been fully paid. Not available in all states.

Substitute Transportation

An accident shouldn’t leave you stranded without transportation. Substitute Transportation coverage helps pay for the cost of a rental vehicle while yours is being repaired. In most states, coverage options range from $20/day up to $50/day. This coverage is optional. When you carry physical damage coverage for theft, you may be entitled to reimbursement of substitute transportation expenses if your car is stolen, even if you don’t carry Substitute Transportation Coverage. Also called Transportation Expense Coverage or Rental Reimbursement.

Towing

For more peace of mind when you’re on the road, many policies include coverage for towing and/or repair at point of breakdown. This is an optional coverage-call and add it to your policy. You’ll be surprised how inexpensive this convenience can be!

Transportation Expense

An accident shouldn’t leave you stranded without transportation. Transportation Expense coverage helps pay for the cost of a rental vehicle while yours is being repaired. In most states, coverage options range from $20/day up to $50/day. This coverage is optional. When you carry physical damage coverage for theft, you may be entitled to reimbursement of transportation expenses if your car is stolen, even if you don’t carry Transportation Expense Coverage. Also called Substitute Transportation or Rental Reimbursement.

Type of Vehicle

The terms of your insurance policy vary with the type of vehicle you wish to cover. In order to qualify for Personal Auto Coverage, for example, your vehicle must be a private passenger auto or a motor vehicle considered to be a private passenger auto. (A “private passenger auto” is defined as a four-wheel motor vehicle, other than a truck, owned or leased for at least six continuous months.) Pickups and vans may be considered private passenger autos under the following conditions: they must have a gross vehicle weight (GVW) of less than 10,000 pounds and must not be used for the delivery or transportation of goods or materials, unless such use is incidental to an insured’s business of installing, maintaining or repairing equipment, or such use is for farming or ranching.

Underinsured Motorist Property Damage (UIMPD)

Underinsured Motorist Property Damage Coverage provides coverage when property damage is sustained by an insured and the negligent operator possesses insurance, but the limits of liability carried by the negligent driver are not sufficient to cover the damages.

Underinsured Motorist (UIM)

Insurance provisions for the “underinsured motorist” cover you, the insured members of your household and your passengers for injuries, damages or death caused by the negligence of a person with insufficient insurance. Should you have a valid claim against a person whose coverage cannot meet your damages, your policy will meet the difference-up to the limit of liability listed on your policy.

Uninsured Motorist Property Damage Deductible

Uninsured Motorist Property Damage coverage may be subject to a deductible at the option of the insured. This option may not be available in all states.

Uninsured Motorist (UM)

In your policy, the “uninsured motorist” provision covers you, the insured members of your household and your passengers for bodily/personal injuries, damages or death caused by an at-fault uninsured or hit-and-run driver. For example, if you are involved in an accident where the other driver is at fault but has no insurance, your policy will cover your medical expenses, up to the limit on your policy.

Uninsured Property Damage (UMPD)

Property Damage Uninsured Motorists Coverage provides coverage for your auto when property damage is sustained by an insured and the negligent operator does not possess insurance.

VIN (Vehicle Identification Number)

This is a 17-character number that is unique to each vehicle and identifies characteristics of the vehicle such as year, make, model and engine specifics. The VIN is usually located on the driver’s side of the dashboard.

Violation(s)

Any driving offense for which you are issued a ticket. (Does not include parking tickets.) When applying for insurance, you must disclose all violations received within the specified time frame. The completion of safe or defensive driving courses does not negate the fact that a ticket was received.

Window Etching

Window Etching is a vehicle identification system in which letters, numbers, or the Vehicle Identification Number (VIN) is etched into the vehicle. Specific states have specific requirements. Please contact an Electric Insurance account specialist for additional information. The Electric Insurance FAQ section can answer commonly asked questions. Definitions offered in this section are meant to provide generic insurance information to consumers. They are not complete descriptions of all terms, exclusions and conditions applicable to the products and services offered by Electric Insurance. The terms and conditions of the policies issued are controlling in all cases. Product availability varies by state.

 

This List of Auto Insurance Policy Terms From Electric Insurance Company