Read these 18 Car Insurance Terms Tips tips to make your life smarter, better, faster and wiser. Each tip is approved by our Editors and created by expert writers so great we call them Gurus. LifeTips is the place to go when you need to know about Car Insurance tips and hundreds of other topics.
When a loss occurs relative to your car insurance policy, Indemnity is the principle that guarantees that in the process of restoring this loss, you will be returned to the financial condition that existed before the auto insurance loss occurred. In other words, you will be no better off and no worse off than before the loss occurred.
If your auto is covered by a car insurance policy and, for any variety of reasons, you elect not to renew, the auto insurance policy is considered to be in a lapsed state. The car insurance lapse begins when the current coverage period for your auto insurance policy ends. If, after a period of lapse, you want to renew your car insurance policy, you will be required to go through the standard application process again.
If your auto is being transported on another vehicle via land or sea, Specified Perils Coverage on your car insurance policy insures your vehicle against:
* Rising water
* Riot or civil disturbance
* Falling or forced landing of aircraft or parts of an aircraft
* The stranding, sinking, burning, derailment, or collision of the transporting vehicle.
Specified Perils Coverage is optional. Find more information on optional auto insurance coverage by shopping for car insurance online.
In your policy, the car insurance term, "Actual Cash Value", is the current value of an item at the time of the loss. This value is defined as the cost of replacing the item minus any applicable depreciation.
Your auto insurance actual cash value is the reimbursement value of the loss. For example, if your car is considered a total loss after an automobile accident, the insurance company will reimburse you the cash value of the car at the time of the accident, not what you paid for the vehicle when it was new.
A car insurance binder is a temporary and immediate contract for auto insurance, even if the auto insurance premium has not been paid nor the car insurance policy issued. The auto insurance binder can be spoken or written, is valid for a specific amount of time, and is in effect until the new car insurance policy is issued.
Your car insurance policy lists items, situations, and circumstances that are NOT insured.
Examples of auto insurance Exclusions include:
* A loss that occurs when someone not insured by your car insurance is at fault;
* A loss that is deliberately caused;
* A loss that occurs during a time period when car insurance premiums are unpaid or overdue;
* A loss that occurs as the result of war, civil unrest, rebellion, or revolution.
In your policy, the car insurance Declarations Page lists the specific details of your auto insurance coverage. Examples of these declarations include: who the insured driver is; what auto and/or personal property is covered; the exact dates and locations for the auto insurance coverage; and the dollar amount of the coverage.
In your policy, the car insurance's Principal Driver is, simply put, the person who drives the insured car the most. Private passenger vehicles included in the principal driver list include ordinary cars, station wagons and jeeps, pick-ups, trucks, vans, and trailers designed to be pulled by an passenger car.
Your car insurance policy term is the time between the start, or inception, of the auto insurance policy until the end, or termination, of the policy.
A car insurance policy lapse, for example, occurs when your current auto insurance policy ends and you do not, for a variety of reasons, renew. In this example, your auto insurance policy term has ended.
Every auto has a Vehicle Identification Number (VIN). The VIN identifies the car's make, model, and year of manufacture. The VIN is a 17-character combination of letters and numbers that is most often found on a metal plate affixed to the dashboard of the car on the driver's side. You can also find the VIN on your auto registration and title.
In your policy, you determine the amount of the car insurance deductibles you pay in the event of a claim against your auto insurance. For example, if you have an auto accident that costs $1000 to repair, and your auto insurance deductible is $500, you pay the $500 deductible and your car insurance company pays the remaining $500. One way to lower your costs is to select higher car insurance deductible amounts, which result in lower monthly auto insurance premiums.
In your car insurance policy, the Principal Driver is the person who drives the car insured by your auto insurance. In comparison, the Occasional Driver is someone who is not the principal driver and, as the name infers, only drives the insured auto on infrequent occasions.
Auto insurance terms aren't just about coverages. When you know your car insurance terms beyond the basics, you can ask questions that help you get the best policy as well as a great rate.
Auto insurance term definitions are important to know when shopping for car insurance. When you know what you are buying you can make a more informed choice.
Companies define auto insurance Fraud as a willfully deceptive act that seeks to obtain an advantage or gain from the car insurance company. An intentional act of car insurance fraud can void your policy.
For example, intentionally pretending to have whiplash following an automobile accident to receive payment for medical expenses would be an instance of car insurance fraud.
When you file a claim against your car insurance policy, you will be assigned to a Car Insurance Adjuster. The auto insurance adjuster will investigate your claim and work with you to settle the claim via the terms of your car insurance policy and procedures. The car insurance adjuster and your car insurance agent are not typically the same person.
|Jennifer Mathes, Ph.D.|