Vehicles

Glosary:

• Deductible: The amount of money the insured must pay to the insurer before their vehicle receives repairs. The most common deductibles are $250, $500, or $1,000.
• Rental reimbursement: A daily amount set to help cover the cost of renting a car when the insured’s vehicle is unusable due to a covered incident.
• Roadside assistance: This service helps the insured in situations such as running out of fuel, losing keys, needing help to jump-start their car, refueling essential fluids, or fixing a flat tire, among others.
• State minimum coverage: The mandatory protection required by the state. It usually includes liability insurance but may not cover minor damages or collisions. It might not provide sufficient protection for some drivers.
• Towing service: Covers the costs of towing the insured’s vehicle to the nearest repair shop.
• Endorsement: A change to an active policy that can increase or decrease the premium. The most common changes include adding a second vehicle or a second driver.
• Declarations page: The first page of the policy, presenting general information such as the name of the insured(s), the premium, coverage amounts, and a description and location of the insured property.
• Insurance contract: The document that establishes the terms of the policy between the insured (client) and the insurer (insurance company), explaining all the details of the agreement.
• Liability coverage: This type of insurance covers expenses for injuries to other people or damage to their property resulting from an accident in which the policyholder is at fault.
• Full coverage insurance: A type of car insurance that offers the most comprehensive coverage available, generally including liability, comprehensive, collision, rental reimbursement, uninsured/underinsured motorist coverage, and roadside assistance.
• Cancellation: The termination of an insurance policy before its expiration date.
• Comprehensive and collision coverage: Two types of car insurance that are usually part of a full coverage plan. Comprehensive coverage pays for damages to a vehicle caused by theft, weather events, or other incidents unrelated to a collision. Collision coverage pays for damages to a vehicle resulting from a collision with another vehicle or object.
• Lienholder: An organization or bank with a financial interest in the property being insured, typically a finance or leasing company.
• Reinstatement: The process of reinstating an insurance policy after it has lapsed. If the insured fails to pay the premium on time, the policy will be canceled, but it can typically be reinstated within a predetermined number of days from the cancellation date.
• Renewal: The process of continuing an insurance policy after its expiration date. When a policy expires after six months or a year, the customer must renew it to keep it active.
• Actual cash value (ACV): The value of the property minus its depreciation or any pre-existing damage.
• Installment fee: A monthly payment fee charged by the insurance company for splitting the premium into monthly installments.
• Vehicle Identification Number (VIN): A unique code assigned to each vehicle, consisting of numbers and letters, to help insurance companies obtain specific details and characteristics of the vehicle.
• Effective date: The date on which an insurance policy starts or takes effect.
• Premium: The price of the insurance policy paid by the insured in exchange for coverage.
• Claim: A request made by the policyholder (also called the insured) to repair or fix a component under the insurance policy.
• Exclusion: Specific risks not covered by the insurance policy. Common exclusions include intentional actions not covered. A driver may also be excluded to prevent them from being covered by the car’s policy.
• Grace period: The time after a payment’s due date during which the policy remains active without any penalties. After the grace period ends, the policy will be canceled if the payment isn’t made.
• Expiration date: The date when the insurance policy ends. After it expires, the insured must restart or renew the policy.
• Policy fee: A fee charged by the insurance company to issue the policy, which is non-refundable and considered fully earned
• Concealment: Failing to disclose facts that could void the insurance policy.
• Policy period: The time during which the policy is active, between the effective and expiration dates.
• Risk assessment: The process every policy undergoes for the insurance company to decide whether to insure the risk. Risk assessment determines who will be insured and what insurance premium will be charged.
• Insured: The customer covered by the policy.
• Insurer: The insurance company providing coverage to the customer or insured.
• Uninsured motorist: A type of car insurance that offers coverage to the policyholder if they are involved in an accident with an uninsured driver.
• Customization: Additional equipment installed on the vehicle after purchase from the manufacturer, altering or modifying the original vehicle model. Coverage can be purchased to insure these additions, such as special tires or upgraded stereo systems.
• Tradesperson: A customer who, as a skilled worker, uses their vehicle for work to transport tools or distribute goods.
• Non-standard insurance: A coverage specifically designed for drivers with particular circumstances, such as poor driving records, high-risk vehicles, or other factors that may make accessing traditional coverage difficult. Non-standard insurance usually includes higher premiums and stricter policy requirements.