A standard renters policy doesn’t cover you for earthquakes. You’ll need special coverage for this. Water damage from flooding, drainage backing up or ground water seeping into your basement is not covered. Animals, birds and fish are not covered. Motorized [...]
Personal property-This coverage is for personal property owned by or used by you and anyone living with you (an insured) while that property is anywhere in the world. Property located away from your home is generally limited to coverage of [...]
Ask yourself this: If all your clothes, the appliances you own, your TV, stereo, jewelry, computer and that collection of Batman Detective comics were destroyed in a fire, could you afford to replace them immediately? If you said no, you [...]
A standard condominium policy doesn’t cover you for earthquakes. You’ll need special coverage for this. Water damage from flooding, drainage backing up, or ground water seeping into your basement is not covered. Animals, birds or fish are not covered. Motorized [...]
If you’re not certain you need condominium insurance, ask yourself the following questions: How would you restore your possessions if you lost everything today? Could you finance the restoration of your possessions and the building not covered in the Condo [...]
Whether or not you need earthquake insurance is up to you. Earthquake insurance can be expensive, and it does carry a much higher deductible than your regular homeowner’s insurance. Just remember, losses from earthquakes can be substantial. For insurance companies, [...]
Whether or not you need flood insurance depends on where you live. Your standard homeowners insurance policy does not cover you for damage from floods. So if you live near a large body of water, a river or the ocean, [...]
The smartest way to make sure you have the right coverage is to take an inventory of your belongings. You’ll want to do one anyway to have in case there is a loss or damage to your home or property, [...]
There are certain situations or certain items in your home that have specific limits on the amount for which you would be covered under “standard” homeowners insurance. For most people, these limits are adequate. However, if you have a home [...]
There are different types of homeowners insurance policies and as you would expect, they offer different levels of protection. There was an HO1, which was so basic and covered so little that it has been discontinued in most states. There [...]
Homeowners insurance protects you in case of damage to your dwelling or property, injury to your guests, or events for which you may be held liable. Usually, a homeowners insurance policy contains liability coverage and may provide you with options [...]
When determining how much coverage you need, again renters insurance is pretty simple. Make an inventory of all your belongings, which you’ll need anyway if you ever need to make a claim. If you have collectibles or antiques, you’ll also [...]
If you’re looking for an auto insurance site that explains auto insurance coverage terms in plain English, you’ve come to the right place. We work hard to make auto insurance as uncomplicated as possible. We also try to make the [...]
Yes, you can. We recognize that relationships come in many forms. If you’re married, in a civil union, or in a registered domestic partnership, you qualify for a discounted rate from most insurance companies we represent. When you’re going through [...]
We think it’s extremely important for auto insurance consumers to compare all their options before purchasing a policy. In fact, we hope you’ll get several auto insurance quotes with different coverage levels so you can truly make an informed decision [...]
If you share an address with other drivers, it’s important that you all have auto insurance coverage. Whether that other driver is a roommate, a spouse, a domestic partner, or a child, if he or she has a driver’s license, [...]
While the phrase “less is more” may be true when you’re decorating or accessorizing, when it comes to auto insurance, more is less: the more coverage you have, the less it will cost you if you get in an accident. [...]
This question may seem strange, but it’s actually quite typical for auto insurance companies to ask drivers how long they’ve had auto insurance coverage. Many insurance companies use information about your auto insurance history to help them determine a rate [...]
Most of us are unable to pay for a new car up front so leasing and financing have become common practices. Hence, it’s important to understand how they affect your insurance. The first thing to do is check your loan [...]
Whether you’re battling traffic on an LA freeway or cruising the back roads of Virginia, you need auto insurance. Just how much insurance coverage you need varies. Each state has different regulations governing auto insurance coverage, and your state’s department [...]
Whether you’re buying groceries or shopping for auto insurance coverage, you always want to get the best value for your dollar. So, what’s the secret to finding reliable and affordable auto insurance coverage? Answer Financial, Inc., we shop several top [...]
It’s the law! Whether you have a perfect driving record or a few violations under your belt, you will need auto insurance coverage if you want to drive a vehicle in the USA. Maybe you’ve just spent way too much [...]
Through Answer Financial, you can insure up to 4 vehicles and/or 4 drivers on one policy. If you have more than four vehicles or four drivers, please call and speak to our professional licensed agents. Even with multiple vehicles, getting [...]
One factor insurance companies take into consideration when determining rates is age. A “youthful driver” is less experienced and charged more for coverage. However, there are different categories of youthful drivers, including: + Unmarried female under 25 years of age [...]
To “write a policy” is insurance lingo for providing insurance.
This coverage is available in certain states and only if you have Uninsured Motorist Coverage. With this coverage, if an accident with an uninsured motorist causes damage to your auto, and if you have the correct documentation that the other [...]
In general, a waiver is the surrendering or giving up of a privilege that is known to exist. For example, a waiver can reject or exclude liability for a stated cause such as Uninsured Motorist Liability coverage.
This is coverage provided under First-Party Benefits to reimburse you for lost wages. In most states the amount of wages recoverable is limited to a percentage of the lost wages. These are the wages that would have been earned in [...]
A policy or other contract that has no legal validity is described as void. When an insurance company voids a life insurance policy, it is usually due to the discovery of misrepresentation of material facts by the person insured. It [...]
An accident for which no one is responsible is considered an Act of God or Vis Major.
Demerits are charged on your driving record for moving violations and accidents. How they are charged varies from state to state. For instance, in some states, a single violation can result in multiple points. For example, you can get additional [...]
This is a card or document issued by your Department of Motor Vehicles that shows the vehicle that has been registered (including year, make, model, VIN).
This is a unique number given to a vehicle by the manufacturer that can help the insurance company double-check certain characteristics of your vehicle, which affect the premium. It is found on the driver’s side of dashboard, in front of [...]
This is malicious mischief or willful physical damage to property and its damages are covered by comprehensive.
This is an agreement by an insurance company to pay a specified amount of money or “agreed value” to, or on behalf of, the insured for a defined loss.
This is when your driver’s license is in force as opposed to having expired, been suspended or revoked.
Shown as UMPD on the policy, this provides for damage to your vehicle in an accident with an uninsured motorist, but only if you do not have collision coverage. This coverage varies by state.
This coverage pays the collision deductible if the insured vehicle is damaged by an uninsured motorist. The vehicle must have Collision coverage in order to purchase Collision Deductible Waiver. The Collision Deductible Waiver limit must match the Collision deductible.
This bodily injury coverage pays for injuries, medical costs, rehabilitation, pain and suffering and any funeral costs suffered by you and/or your passengers in an accident caused by a driver that has no insurance or insufficient insurance. It is applicable [...]
The unearned premium is the portion of the written premium that has not been exposed to loss. In other words, if you have paid an annual premium and your insurance is cancelled before the term expires, then a portion of [...]
This is the process of identifying the risk of a claim by the person insured and classifying his or her potential degree of risk so that appropriate premium rates can be charged.
This person works for either an insurance company or an agency and is a specialist trained in evaluating risks and determining the appropriate premium rates.
In most states your Uninsured Motorist coverage also includes protection coverage for accidents involving individuals who do not have adequate (or enough) insurance to pay for accidents they have caused. See Uninsured Motorist Coverage.
Stacking allows you to multiply (or “stack” ) the amount of uninsured/underinsured motorist coverage by the number of vehicles on your policy. If you had 2 vehicles, you would have twice as much uninsured/underinsured motorist coverage, per vehicle, if you [...]
This can be a separate policy or an endorsement to your home or auto policy, and supplements the liability coverage you already have on your homeowners and auto policies. It will cover you if you are found at fault for [...]
This is a non-motorized portable unit and camper designed to provide temporary living quarters for recreational or camping use, or to transport a recreational vehicle, which does not require a special highway permit when towed.
Approved schools you can attend to remove a traffic violation from your motor vehicle record. You can only get violations removed by attending traffic school once every 18 months.
This is a provision included in many auto insurance policies that provides for reimbursement of towing expenses (and any labor necessary at the site of an accident) resulting from an accident.
This is a loss that is so severe that the insurance company concludes that the vehicle is not repairable, taking into account factors such as the value of the vehicle, the amount of the repairs and the salvage value of [...]
Under a state with a Tort System as opposed to No-Fault System Add-On Benefits, your liability insurance is generally designed to cover an unintentional tort action (such as accidents). In a No-fault state, an insured cannot sue for general damages [...]
There is a limit of time within which a claim and proof of loss must be submitted after the accident or loss. The limit varies and is determined by the individual insurance company.
A threshold is a boundary that must be crossed before an injured person can make a tort liability claim. A threshold can be either monetary or verbal. For example, a monetary threshold would be when the injured victim had medical [...]
The date and time the coverage under an insurance policy ends because of cancellation by the insured or insurance company.
A group, association or pool of insurance companies who join economic forces to provide coverage that may be of such total value or high hazard that it can be covered more safely on a cooperative basis. An example is the [...]
Generally, survivor benefits include compensation to dependents of the deceased victim for lost wages and replacement services. In most states, the court sets maximum limits for specific amount and/or by limitations on total benefits that can be received.
This weighs whether or not the insurance company has enough surplus to cover the risks it is assuming. For instance, a company insuring a lot of earthquake risk has a higher risk profile than one writing fire insurance and, therefore, [...]
A risk for which there is no readily available insurance market available can be placed with a nonadmitted insurance company on an unregulated basis, in accordance with the surplus or excess line provisions of the state law. For instance, to [...]
Surplus adequacy is a measure of whether a company’s assets in excess of liabilities are sufficient to pay your benefits even if an unexpected situation occurs. An example would be a very large and rapid increase or decrease in interest [...]
This is the amount by which the total company assets exceed the assets earmarked to pay future policy benefits. In other words, surplus consists of the assets that are not expected to be needed to pay future claims.
This is coverage that is not included in the standard automobile insurance policy. Examples of optional coverage are towing, rental, reimbursement, and special equipment.
A Street Rod is a vehicle or replica over 25 years old which is limited to 2,500 miles or less per year, appreciating in value, with use limited to car shows, events, and an occasional pleasure drive, but specifically not [...]
Sometimes shown as “Agreed Value,” this is the agreed amount to be paid in the event of a total loss, regardless of the actual value of the vehicle. Few auto insurance companies offer this coverage.
This is an insurance company that offers policies with all the basic and optional coverages that you would want on one policy at a competitive rate. You can expect to pay much less if you qualify for a preferred or [...]
This New York-based rating service bases its judgment of insurers on their claims paying ability. The more reliable a carrier is expected to be in covering its policy liabilities, the higher their rating. Weighing such factors as industry-specific risk, management [...]
An insurance practice that increases the money available to pay auto liability claims. In states where this practice is permitted by law, courts may allow policyholders who have several cars insured under a single policy, or multiple vehicles insured under [...]
The spread of risks refers to whether or not the risks assumed by the company are spread out or are they concentrated in one type of risk, such as earthquake insurance in California. If the latter is the case, the [...]
This coverage pays a certain amount for each injured person and a total amount per accident for all injured persons. This type of liability limit is expressed in three numbers, such as 250/500/100. Using this example, the first number means [...]
These would include equipment or accessories installed in your vehicle such as a stereo, CD player or cellular phone. In order to be covered, these must be permanently installed and you may need to request special coverage.
These are damages that can be measured, such as time off from work. Limits are specific to each state.
This type of liability limit is expressed in a single number. It is also referred to as Combined Single Limit (CSL). It is the most the insurance company is obligated to pay for damages because of bodily injury or property [...]
When an insured cancels a policy midterm or before the expiration date of the policy, the premium refunded to the insured will be surcharged or a penalty will be applied.
Usually this is a claims payment or policy benefit. It signals an agreement as to the amount and method of payment. It can also be a conclusion of legal action before the final verdict, by mutual agreement of parties involved.
These are factors, such as your sex, marital status, use of vehicles and/or where you live, that are used in addition to the primary or mandatory rating factors, such as your driving record, mileage and/or years of driving experience, to [...]
This is about managing the balance between assets and liabilities or debts and establishing the desired ratio. Capital ratios are adjusted for the soundness of the company’s assets and the predictability of its liabilities.
Your past experience in the insurance company’s eyes is all about how many automobile losses and violations you have since you began driving. This is variously referred to as the “loss record of the insured,” or “loss experience”, or “loss [...]
The chance that you will have an accident or loss is a risk and the reason why you buy automobile insurance. The extent of your risk depends on how many miles you drive, your age and experience as a driver [...]
Upon cancellation of an insurance policy prior to the expiration date, the unused portion of the premium is returned to the insured. A return premium can also be made for an overpayment or as a result of reducing your coverage.
These are air bags, seatbelts and combination of air bags, seat/shoulder belts. Depending on the state laws and individual carrier, you may need these to avoid a penalty on your premium, or to receive a discount.
This term is used to describe whether the amount of the assets are able to support future benefit payments.
This term applies to the assets that are earmarked to pay future benefits.
This designates additional deductibles, which insurers must offer and insured may accept. Limits are specific to each state.
This designates additional deductibles, which insurers must offer and insured may accept. Limits are specific to each state.
This is a required written statement by a potential policyholder, which provides that information that an insurance company relies upon to decide whether to reject or accept the risk of coverage (often an application).
These are benefits to pay someone, other than a family member, for services the victim would have normally performed without pay for the benefit of family members, if the victim hadn’t been injured. However, if the insured is collecting work [...]
This is a new policy issued to take the place of another policy currently in force. See Renewal Certificate.
This coverage provides costs for rental car coverage when, for example, the policyholder’s car is stolen or damaged in an accident. This coverage, (available only if you have comprehensive), is subject to a daily limit and maximum dollar amount, which [...]
An insurance company issues this document to its policyholder to show proof of coverage for yet another policy term (after it renews).
Coverage is automatically issued to replace an expiring policy.
Insurance companies need to limit the amount of exposure on any one claim or event to avoid large income fluctuations (or uncertainties) and possible insolvency (or bankruptcy). By sharing the risk with other insurance companies, reinsurance allows an individual insurance [...]
Putting coverage back into effect after it was cancelled or suspended is called reinstatement.
This is the person who is named as the owner or responsible party for a vehicle in the records of the state Department of Motor Vehicles.
Most insurance companies define recreational vehicles as the following: All terrain vehicles, dune buggies, golf carts, mini-bikes, motor homes, motorcycles, recreational vehicle trailers, snowmobiles, trail-bikes, off-road vehicles, antique and classic autos, and various watercraft including jet skis.
Analysts look at an insurance company’s investment in terms of type, quality and security and how well they are spread out or diversified. This is an important measure, as the company needs to assess its investment income and eventually sell [...]
Also called exemplary damages, these are awarded by the court to acknowledge and punish a negligent party for wanton, reckless or malicious acts of omissions. They are added monetary damages that are over and above the damages paid for injuries [...]
This term is used interchangeably with “coverage” and “insurance.”
When policyholders cancel a policy, they are entitled to the unearned portion of the premium for the unused period of the policy. For example, if you paid for a six-month policy, and cancel the policy after three months, you are [...]
Property Damage is the part of your liability coverage that will pay damages to another’s property (up to the limit you purchased) as a result of an accident for which you, or a covered driver on your policy, were found [...]
You must make a formal statement regarding your loss before the insurance company will pay a claim. This statement is called Proof of Loss.
This is the level of profit made by the insurance company. Profit has to be adequate so that a small adverse change in claims, for instance, will not result in losses that will negatively effect the solvency of the company.
These are the types of insurance coverage offered by an insurance company, such as term life, fixed-rate annuity, home, auto, mortgage, watercraft, etc.
An agent, solicitor or individual, licensed to sell insurance is also known as a producer.
Insurance companies usually define these as four-wheel vehicles that are not used to carry passengers for a fee. Pick-ups and vans qualify, as long as they do not exceed 10,000 lbs. and are not used in a delivery or freight [...]
This specifies the order in which different policies apply to a claim when there is more than one policy involved.
Principal Driver is the person who drives the car most frequently.
A person who fills out and signs a request for insurance coverage is usually referred to as the primary insured or applicant. This person is generally the intended policyowner and is listed as applicant on the premium due page after [...]
This is coverage, such as auto insurance, that provides benefits up to the limits of a policy, regardless of what other insurance policies are in effect. Without this primary layer of coverage, you can not purchase additional coverage such as [...]
This means that First-Party Benefits must be exhausted before other sources can be called upon when similar benefits are available. This excludes workers’ compensation insurance.
This is a vehicle that has belonged to someone else prior to your purchasing it. It is also known as a used vehicle.
Insurance companies or agents notify a policyholder that a premium will be due on a given date. Also referred to as a bill.
This is defined as the number of times during the policy year that you need to pay premiums. Frequency options are typically annual, semi-annual, quarterly and monthly.
This is the amount of money an insurance company charges to provide specific coverage for a specified period of time.
This is an insurance company that writes auto insurance policies for drivers who are considered better risks as compared to a Standard, Non-Standard, or Assigned Risk.
By accepting this option, you agree to repair your car at pre-approved auto repair shops named by the insurance company. Likewise, if you elect a PPO with Medical Coverage, your health care is received from medical doctors approved by the [...]
This is an association or syndicate of insurance companies who share proportionately in writing auto insurance for people who cannot obtain coverage from the standard sources because of a bad driving record. In some places, it is called the Auto [...]
This is the person who owns the policy. The policyholder is also often referred to as the “insured” and “named insured” or “applicant.”
This is the amount of money a company sets aside today, so that after receipt of future premiums, less expenses, the company will have the ability to pay future expected or estimated claims.
An additional premium charge added to a policy by the agent or broker to service your policy. Your insurance company may add a policy fee to service multiple billing options. See Mode of Premium Payment.
Additions, deletions, or changes to the coverage of a policy are endorsements or policy changes. These can include the correction of a misspelled name, change of an address, or addition of another vehicle, or increase of liability coverage. These also [...]
This is a printed document, which is issued by the insurance company and states the terms of the insurance contract. It includes all the attached clauses, riders, endorsements and waivers.
An auto can be for “pleasure use” if it is not used for business. At the option of the insurance company, pleasure use can include driving to or from work or school, if that location is less than a specified [...]
This is a driver with a restriction on his/her license that refers to a disability. Medical questions asked on the auto request for coverage could also identify a physically or mentally impaired driver.
This term indicates coverage from such perils as collision (accident) and comprehensive (fire and theft) to your covered vehicle. If you have borrowed money to buy or lease a car, the lender/leasee may require that you have certain minimum amounts [...]
In a No-Fault state, these are the persons to whom First-Party Benefits may or must be withheld from in the event of an accident. Persons intentionally causing injury, vehicle converters, and persons committing felonies are commonly excluded from being covered [...]
This specifies which persons may receive the First-Party Benefits under a No-Fault policy when the accident occurs in the state where the vehicle is registered (I.S.) and when the accident occurs out-of-state (O.S.). In most states the named insured, relatives, [...]
This term refers to insurance for individuals and families, including automobile, homeowners, umbrella, fine arts, watercraft, etc.
PIP is a First Party Benefit available in states with mandatory or optional No-Fault coverage. It usually includes medical expenses, loss of work income, essential services and accidental death and funeral expenses.
You may be rewarded with a credit for persistency if you have been insured with a specific company over a period of time with no losses.
People you permit to borrow your auto are covered as permissive users. However, if the person is not a named driver on the policy, some companies will drop the liability limits to the minimum required in that state.
Passive Disabling alarms automatically engage devices that disable the ignition, battery or other vehicle features that a thief would need to steal your car.
This coverage specifies which persons are entitled to benefits out of state. Example: There is an accident in a Tort state, such as California and Vermont, you No-Fault coverage would be accepted for those drivers specified by your policy and [...]
Other is a category of coverage on your premium breakdown screen, that refers to the cost of including certain state specific coverage options you’ve selected, such as PIP, Underinsured Motorist, Stacked Uninsured Motorist limits, etc.
The management of a company can influence how the company handles its daily and long-term operations. Among the management factors to be considered would be whether or not the company has an experienced management team, or does the company have [...]
This is a measure of how well the company is doing. Many different measures, such as expense ratios, sales performance and policy terminations are taken into consideration when evaluating operating performance.
This represents the extent to which a company’s costs of operating are fixed (rent, insurance, executive salaries) as opposed to variable costs (materials, direct labor). Leverage occurs because a company only increases its variable but not fixed costs. The ratio [...]
This is the instrument on a vehicle that measures distances traveled.
This is an event, such as an accident or theft that results in a loss for the insured. Coverage typically responds on a “per occurrence basis” or a single event, as opposed to a “claims-made basis”.
This is the person who drives the vehicle infrequently.
This is when you officially communicate to the insurance company that you have suffered a loss for which you are insured. Also referred to as Claim Report or First Report.
Written notice of intent to cancel insurance can come from either the company or the insured.
This pertains to a request for coverage in which the potential policyholder does not satisfy the preferred or standard risk profile of the insurance company.
An insurance company that provides coverage for those risks that cannot be placed with a preferred, standard or assigned risk insurance company. Typically, they provide coverage to an individual that is considered a higher risk.
Discounts may be available for liability, no fault medical benefits and collision to someone who has not smoked cigarettes or used tobacco products in more than five years. The availability of this discount depends on the insurance company.
This is an individual licensed in a state in which he or she does not reside.
This is a cancellation of insurance coverage at the expiration date. A nonrenewal can be initiated by the policyholder (insured) or the insurance company. Also referred to as non-renewed.
This insurance company is not licensed to do business in a particular state.
Under a state with a No-Fault system as opposed to a Tort system or Add-On Benefits Systems, your insurance company would pay for medical payments and a portion of your lost wages, regardless of who caused the accident. There are [...]
While it varies from state to state, typically no-fault coverage provides first party benefits for medical expenses, loss of income, loss of services, and funeral expenses resulting from bodily injury to occupants in an accident in a covered vehicle. It [...]
Any auto purchased after the effective date, but before the expiration date of an auto policy is considered “newly acquired.” Most companies provide automatic coverage as long as they are notified 7 to 30 days of the purchase.
The failure to exercise the care that an ordinary, reasonable person would exercise; either doing that which a prudent person would not do, or failing to do that which a prudent person would do.
This is the division within the Department of Transportation that oversees and administrates safety regulations, such as air bag deactivation, child safety restraint requirements, etc.