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Auto Insurance Jargon
By: Jaci Buscher | Date January 28, 2014
Nothing is more overwhelming than receiving a new, huge insurance policy and not understanding the industry jargon contained within it. That is why we have put together this short glossary of the most common auto insurance terms. We are sure you have heard of some of these before, but perhaps you are a little unclear about what they truly mean or are referring to. We would like to help! If there are any terms not on this list which continue to befuddle you, let us know and we can translate them out of insurance gibberish into everyday language.

At Fault - The person who primarily caused an accident is deemed the "at fault" driver and their insurance company is who is responsible for the damages. In some scenarios it can be easy to identify (ex. a driver who is reversing and hits another vehicle) or it can be difficult to identify (ex. two reversing drivers who hit each other). The two responsible insurance companies determine fault based on all of the facts obtained about the accident.

Bodily Injury Coverage - This coverage, from the at-fault driver's policy, pays the costs for medical treatment for anyone hurt in the accident (excluding the at-fault driver) up to the coverage amount purchased. These payments can be made for anything from minor bumps and bruises up to funeral costs in the case of death.

Claim - Formal notice given to your insurance company that you have been involved in some sort of accident which you believe to be covered by your insurance policy.

Claims Adjuster - The person from your insurance company who is assigned to investigate and settle your claim. It is important to note that we, your insurance agent, are not your claims adjuster and that we cannot make decisions on fault or applicable coverage.

Collision Coverage - This covers your vehicle in the case of any sort of physical damage caused by colliding with another object whether it be another vehicle, building, or fence. This coverage also covers your vehicle in the case of a roll over and it is usually purchased with a deductible.

Comprehensive Coverage - This covers your vehicle for any loss that is not caused by collision, such as vandalism, fire, theft, or falling objects (hail, rocks, animals). This is also usually purchased with a deductible.

Covered Loss - Any damage done to yourself, your vehicle, or other people or property within your vehicle that is deemed to be covered under your insurance policy.

Declaration Page - This is typically the first page of your insurance policy and gives you all of the most important information about your policy. It summarizes all of the coverages you have, the dates for which they are effective, and any other unique aspects of your policy.

Deductible - Deductibles are most common for the comprehensive and collision coverage of auto insurance, but they are used for other coverages as well. A deductible is used to reduce the responsibility of the insurance company and thus reduce your insurance premium. If you purchase, say a $500 deductible, then you are agreeing to pay for the first $500 worth of damages out of your own pocket and the insurance company will cover any amount exceeding that $500.

Endorsement - Any sort of change or optional coverage added to your policy. You may endorse your policy at any time during the term by requesting to add a new driver or vehicle, change your address, adjust your limits, or any other such modification.

Exclusions - Any specifically identified situations in which the insurance company refuses to cover your losses. For example, standard auto policies typically exclude coverage if an insured has intentionally caused injury or property damage.

Independent Agent - Us! We are an independent agency because we are not directly employed by any insurance company, yet represent many. Our interests are in searching for the best rate and service for our customers rather than trying to fit each customer into one company's program.

Liability Property Damage Coverage - Similar to Bodily Injury Coverage, this coverage is for any physical damage caused by your auto to others' property.

Medical Payments Coverage - This is an optional coverage that is purchased to cover the medical payments of anyone covered under your policy (including yourself) in the event of an accident, regardless of fault. Some people opt not to purchase this coverage because they feel that their health and life insurance suffice.

Motor Vehicle Report - For every policy we issue, we pull an MVR to see the drivers' licensing status and history of violations, suspensions, and other infractions. Insurance companies use these reports to determine the likelihood of future accidents and hence determine the premium you must pay.

Premium - The amount you pay for your insurance policy. This is typically charged on a monthly, quarterly, semi-annual, or annual basis.

Policy - This is the full written agreement between you and your insurance provider. It contains all of the situations in which you are and are not covered by the policy. Although it is a good idea to read this so you know exactly what is covered, it can be quite tedious.

Road Service - This coverage reimburses you for any reasonable towing and labor costs paid if your vehicle is to break down. This is an optional coverage which many choose not to purchase in order to save money on their premium, but becomes quite helpful when needed.

Underinsured Motorist Bodily Injury Coverage - In the case that a person hits you but does not have sufficient insurance coverage to cover all of your medical costs, this coverage will kick in so that you hopefully don't have to pay the remaining balance out of your own pocket. This coverage is typically paired with the Uninsured Motorist Bodily Injury Coverage.

Uninsured Motorist Bodily Injury Coverage - Likewise, this coverage will cover you, up to the coverage amount purchased, if the person who is responsible for hitting you flat out does not have any insurance. We highly recommend this coverage considering how devastating this situation could be if it were to happen to you.
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