Glossary

A

Accident

An event that happens by chance typically resulting in damage or injury.

Accident Threshold

A specific dollar amount that must be paid out on a particular claim type before it can become chargeable.

Accidental Death (AD)

This optional coverage pays for death expenses if, in a covered auto accident, bodily injury causes the death of you or a covered family member.

Active Driver’s License

A driver’s license in good standing with the DMV.

Actuary

Third-party professional who calculates premium rates, risks, etc. for the pricing of insurance policies.

Adjuster

The insurance company employee who investigates insurance claims and determines policyholder’s claims.

Applicant

The person applying for an insurance policy

B

Broker

Someone who negotiates insurance contracts on behalf of insurers

C

D

Declarations Page

The section of an insurance contract containing such information as the name, description, and location of insured property; the name and address of the policyholders; the period for which the policy is in force; premiums payable; and the amount of coverage.

Delinquent

A bill or policy that is overdue in payment

Driver Not Rated

A status given when the driver is not rated and not insured.

E

Earned Premium

The amount of premium that an insurance company has earned on your policy.

Excluded Driver

A person that is intentionally stated on the insurance policy as unprotected

F

Field Representative

An employee of the insurance company that works within a specific territory.

Flat Cancellation

The cancellation of an insurance policy before the insurance company has assumed liability, resulting in the insured getting their premium refunded.

Fraud

A deliberate misrepresentation for gain.

G

Grace Period

Some auto insurance policies have a time frame that allows customers to make a payment after the due date.

H

I

Installment Fee

A fee charged when making monthly installment payments of an insurance premium

Installment Premium

One or more payments made by the insured until the entire insurance premium is fully paid. They may be made monthly, quarterly, or semi-annually at a slight additional charge.

Insuring Agreement

The portion of an insurance policy that specifies which risks are covered and also lists the exclusions.

International License

A driver’s license issued by a country other than the United States.

L

Lapse in Coverage

A period of time when a person goes without insurance coverage

Lessor

The leasing company that owns the driver’s vehicle

M

Medical Payments Coverage

\
Helps pay for your medical and funeral expenses if you’re in a car accident.

Misrepresentation

Giving false or misleading information

Motor Vehicle Report (MVR)

A report that lists accidents, citations, and violations that appear on your motorist record.

N

NAIC Number

A number issued by the National Association of Insurance Commissioners (NAIC) for each individual underwriting company.

O

Occurrence

An occurrence policy covers claims made for injuries sustained during the life of an insurance policy. It covers losses that take place during a specific coverage period, regardless of when an incident is reported.

P

Policy Limit

The maximum amount an insurance company will pay for a loss covered by the insurance policy.

Policy Rewrite

The process of terminating a policy before the expiration date stated in the policy, and issuing a new policy.

Primary Insurance

The policy that will respond first in the event that a loss is covered by more than one policy.

Private Passenger Vehicles

A four-wheeled automobile used for private and personal use

Pro Rata Cancellation

Cancellation on an insurance policy in which the policyholder is fully refunded for premiums that have been paid in advance.

Q

Quote

An estimate of the price of your potential insurance policy.

R

Rated Driver

An active driver who is covered while driving an insured vehicle.

Rating

The determination of the cost of a premium based on risk characteristics and calculation of the chance of a loss.

Reciprocal

The information that is transferred from one state to another.

Reinstate

When a policy is reactivated without lapse after cancellation or expiration.

Renewal with Lapse

When a policy is renewed past the expiration date, after a period without coverage.

Risk

The chance of loss to the insured that’s related to the insurance policy.

S

Short Rate Cancellation

When an insured cancels the insurance policy prior to the expiration date and a penalty is applied to the refund amount based on the time remaining on the policy.

SR-22

A vehicle liability insurance document required by most DMV offices for high-risk drivers, including drivers with multiple traffic violations, driving while uninsured, or DUI.

Surcharge

An additional amount of money charged to a premium based on the actions of the insured such as accidents or moving violations.

T

Term

The period of time that the insurance policy is active.

Theft

The unlawful taking of your uninsured motorcycle

U

Uninsured and Underinsured Motorist Coverage

Provides coverage for injuries you and others suffer when you’re in an accident with an uninsured driver, or a driver without adequate insurance.