A.M. Best is the oldest insurance rating agency in the world and has been reporting on the financial condition of virtually all life and health insurance companies since 1899. It evaluates a company’s relative financial strength and overall performance in [...]
An accident is an unintended, unforeseen casualty or mishap. It occurs suddenly and at a definite place.
When an insurance company asks about your accident frequency, they are asking about the number of accidents you have experienced over a period of time. Insurance Companies consider your accident frequency when it comes time to writing or renewing your [...]
Some insurance companies offer a discount for having taken an accident prevention course approved by your motor vehicle department. You may need a certificate of completion as proof.
In some states, you can purchase Accidental Death Benefit coverage. It provides for payment if you or anyone covered by your insurance dies as a result of an accident within one year of the accident. This coverage will vary by [...]
Active Disabling alarms are those in which you can manually set a turn-off feature that disconnects the ignition or battery should someone try to steal your car.
Unlike accidents, these events are the result of natural causes, without human intervention, and could not have been prevented by reasonable care. Examples are floods, lightening, earthquakes, hurricanes, and tornadoes.
Actual cash value is usually defined as the fair market value of your vehicle, taking into account the mileage, age, options and condition of your vehicle.
Add-on Benefits refers to add-on plans that pay certain benefits to person injured as a result of an automobile accident, regardless of fault. However, the injured person reserves the right to sue the negligent person who has been identified as [...]
These are persons other than the policy owner, who are also protected by the terms of the policy.
This is a measure of whether a company’s assets, in excess of liabilities, are sufficient to pay your benefits even if an unexpected catastrophe occurs. For this reason, the Insurance Answer Center only offers products from companies rated B+ (very [...]
This employee of the insurance company or independent agent assesses the damage to your person or property and makes recommendations to the insurance company as to the settlement of your claim.
The process of determining the amount of a loss and settling the claim is know in insurance circles as an adjustment.
This is an insurance company that has been licensed by the insurance department of a state to do business in that state.
Based on their insurance guidelines, an insurance company might cancel an existing policy or decline a request for coverage. This is called an adverse underwriting decision.
The age at which you are granted full civil rights (e.g., able to vote, able to legally sign a contract on your own, etc.)
Alarm only means that you have an alarm that can be heard from approximately 300 feet away and lasts for at least three minutes.
This is an insurance company whose main office is located in a foreign country.
An all-terrain vehicle is a three, four or six wheel motor vehicle equipped with a motorcycle engine, balloon tires or crawler treads, and designed for off road use on rugged terrain, or rugged terrain and water.
This is a computer-controlled anti-lock braking system which, upon the driver’s application of the brake pedal, detects when a wheel is about to lock up and create a skid. The system prevents the skid and provides a smoother stop by [...]
Specific devices to discourage car thieves–such as car alarms, ignition cut-offs, wheel locks and hood locks–often will earn discounts from insurance companies on comprehensive coverage. These discounts vary from company to company and are based on the type of alarm [...]
An antique auto is a private passenger automobile twenty-five or more years of age, maintained solely for use in exhibitions, club activities and other occasions of public interest, used occasionally for other purposes, and is not driven more than 2500 [...]
The person applying for an insurance policy is an applicant. The applicant is usually the intended policyowner after a policy is issued. In automobile insurance, typically the applicant is the registered owner of the vehicle to be insured.
This represents one or more forms completed by an individual seeking to buy insurance. The purpose of the forms is to provide the insurance company with information needed to know what type of policy to issue and whether or not [...]
This authorization from an insurance company gives the insurance agent the authority to act in its behalf as an agent. Generally, agents must be appointed by at least one insurer in addition to being licensed by the state.
When more than one insurance contract covers a loss, the amount to be paid is divided amongst them. The way it is divided is called an apportionment.
This is similar to an arbitration clause. However, an appraisal clause is used for disagreements on value of property or the amount of loss under physical damage coverage.
When the insurance company and car owner disagree about the actual cash value of their loss, each party can call in an appraiser. If the appraisers cannot agree, they call in an arbitrator.
When disputes arise concerning the amount of recovery that would be paid to the insured under his or her uninsured motorist coverage, the arbitration clause would be used in settling the claim.
A craftsman or skilled worker, such as a carpenter. A few insurance companies consider special rates for the miles an artisan drives to and from a job site.
Insurance companies carry out asset-liability management by matching the maturity of their investments with their expected liabilities, benefit payments and debts (obligations). Analysts review how the investments are set up to see when they mature or pay off. The concern [...]
Analysts look at the company’s investment portfolio in terms of type and quality, security and how well investments are spread out or diversified. This is an important measure, as the company needs to assess its investment income and eventually sell [...]
When a driver cannot obtain insurance from the voluntary insurance market (preferred,standard and nonstandard insurance companies), because of an unsatisfactory driving history, he or she will be assigned to a specific insurance company under an assigned risk plan. That insurance company [...]
Drivers unable to get insurance in the voluntary market because of their driving history are assigned to a specific insurance company who must provide coverage for the assigned driver for a specific period of time. The number of drivers assigned [...]
This is an insurance company/insurer authorized by the state to transact business in that state for specific types of insurance.
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 [...]
A car can increase in value due to special added features or its popularity earned among collectors.
Beyond covering you for damage to others (liability and property damage), your policy can cover your car against accidents (collision) with other cars or objects. It can cover your cars against damage from theft, vandalism, and other mishaps (comprehensive). It can [...]
This is the process of making the effective date of an insurance policy earlier than the date the application is signed by the insured.
Minimum requirements on how much liability must be provided by an auto policy are referred to as basic limits. These limits often depend on state requirements.
In auto insurance, this is a receipt issued-by either the insurance company or an insurance agent on behalf of an insurance company-that ensures insurance coverage becomes effective immediately. Each insurance company has different rules on whether coverage is bound and the length [...]
This coverage pays up to a specific amount for injuries caused to other people when you are considered at fault in an accident. It pays for the medical treatments, ambulance service, loss of income, prosthetic devices, rehabilitation, or funeral costs [...]
This licensed broker/agent has a contractual agreement to represent you to the insurance company.
The potential insurer will want to know if your auto is for “business use.” An example of business use would be a realtor who uses her automobile to show properties or a contractor who uses his personal truck to bring [...]
This consumer guide for persons contemplating purchasing or applying for an insurance policy includes important policy information needed to compare insurance policies from different insurance companies. A buyer’s guide is generally only available to buyers who live in a state [...]
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 [...]
This is when either the policyholder or the insurance company terminates a policy. Your rights to cancel as a policyholder vary from state to state and are limited by state laws. However, here are some of the ways in which [...]
Companies raise money, or capital, by selling stock (common or preferred shares) or by borrowing money (short-or long-term debt, issuing bonds). Capital structure refers to how a company raised its capital.
Companies raise money, or capital, by selling stock (common or preferred shares) or by borrowing money (short- or long-term debt, issuing bonds). Capitalization refers to how a company raised its capital.
A carpool is a group of people who drive together to their place of employment. Members of a carpool are often eligible for a discount.
A carrier is the insurance company, also known as the provider or insurer.
This short-form documentation provides the proof of insurance often required for loan transactions or other legal documents. In many states, it can also be requested by a police officer.
This is a demand for payment from the insurance company by the policyholder, under the terms of an insurance policy. Claim payments are usually paid within 90 days of filing, depending on the claim. A claim report gives the facts [...]
This report gives the facts of a claim to the insurance company for payment of a covered loss. Sometimes called First Report.
This is the person who is requesting payment for a loss.
If a claim is made during the time period when a liability policy is in effect, an insurance company is responsible for its payment, up to the limits of the policy, regardless of when the event causing the claim occurred.
If a claim arises out of an event during the period when a policy is in force, the insurance company is responsible for its payment, up to the limits of the policy, regardless of when the insured submits the claim.
This compensates the insured or claimant for a covered loss and should usually be paid within 90 days of filing, depending on the claim.
A classic auto is an automobile which is 10 or more years of age, is of significantly higher value than the average value of other autos of the same make and model year, and is not driven more than 2,500 [...]
Also known as a form, attachment or endorsement, these are sentences and paragraphs that describe various coverages, exclusions, duties of the insured, locations covered and conditions that suspend or terminate coverage.
This covers the repair or replacement of your car as the result of an accident, regardless of who was at fault. It is usually required if your car is financed or leased. Typically, it costs about one-third of the total [...]
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 party [...]
This is a single policy that includes coverage for Auto and Homeowners (usually written as separate policies), and sometimes, umbrella (which extends the liability coverage on your Auto and Homeowners policies). It is sometimes referred to as a package policy. [...]
This is the distance you travel to your place of employment or school. When the insurance company asks how far you commute, they want the one-way rather than round-trip mileage.
These are damages that are modified in proportion to the driver’s degree of negligence or fault in an accident. For instance, if you were found to be only half at fault, you would be responsible for half the damages. Courts [...]
This coverage pays for repairs to your insured vehicle when it’s damaged in a non-collision type mishap such as theft, fire, vandalism, hitting an animal and natural disasters. It also includes the theft of factory-installed equipment that is permanently attached [...]
These laws spell out the coverages required by the laws written by your state legislature, for auto insurance. Included are rules, regulations and minimum limits of liability for auto policies by which the insurance companies’ policies must comply. These laws [...]
These are certain provisions of an insurance policy that spell out the rights and duties of the insured and the insurance company in the event of a loss, cancellation procedures and inspection of property.
The insurance company agrees, for a premium, to provide benefits, reimburse losses or provide services for you as the insured/policyholder. This agreement is called a contract, which is a legally binding agreement between two or more parties enforceable in a [...]
This is an accident or moving violation.
This is the total amount of protection provided to you by your insurance policy. It can include bodily injury, property damage, medical payments, uninsured motorist, uninsured motorist property damage, comprehensive and collision, rental reimbursement, towing and labor.
This is an injury, death, property loss or legal liability, for which an insurance company will pay benefits under the terms of the policy.
This is the person protected under the contract/policy of insurance.
These are the cars listed on your policy.
This is a confidential report made by an independent organization that has investigated the credit history of a someone requesting coverage. Credit history generally reflects the subject’s credit obligations and history of meeting those obligations.
This is the first page of your policy and contains basic information such as the names of people covered, the dates the policy is in effect, covered cars, the types and dollars limits of your coverage and short-hand references to [...]
You can request that a specified amount be allocated for the replacement of a covered vehicle. This declared value figure is stated in the coverage agreement. It’s more costly, but a popular option for owners of antique or collectible cars, [...]
This is when the insurance company rejects a request for coverage for insurance.
This is the amount you will pay out of your own pocket before the insurance company pays for a claim. For instance, if you have a $1,200 covered loss and $500 deductible, the insurance carrier pays $700. You pay the [...]
This is someone who is being sued in a court action.
This is an initial payment needed in order to put the policy in force. It is usually a percentage of the total cost of an insurance policy.
Some insurance companies, such as State Farm, Allstate, and Farmers, sell policies through salaried employees who only sell their policies. Direct writers generally do not sell their insurance through independent agents.
This is a form used in the nonstandard auto market, for people who do not qualify for automobile insurance from the usual sources because of their bad driving record. Such drivers are required to sign a disclosure authorization form before coverage [...]
Many insurers offer savings to consumers who meet certain standards. Available discounts vary with each insurance company. Percentages will differ as well depending on the company that insures you.
Discounts for students who attend school more than 100 miles from home and do not take the car along.
This consists of the various methods used by an insurer to provide life insurance policies to its customers. Companies and rating agencies want the sale of policies to be widely disbursed through a large number of agents or distribution outlets, [...]
This involves spreading one’s savings over a wide range of investment alternatives, such as savings account, common stocks, CDs, deferred annuities or real estate. At various times in a market cycle, some asset classes may do well while others do [...]
This is the state run regulatory office found in most cities where you can get your drivers license, register your vehicle, and do other things regulated by the state that are connected to your vehicle.
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, [...]
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 [...]
An insurance company formed under the laws of the state in which the insurance is written.
Auto insurance companies operate these facilities, where the extent of damages to a claimant’s automobile can be determined and, in many cases, settled on the spot.
This provision in an auto policy is designed to protect the policyholder/drivers when driving cars other than the one/s described in the policy.
Many insurers offer savings to consumers who meet certain standards. Available discounts vary with each insurance company. Percentages will differ as well depending on the company that insures you. An example of some discounts are Good Driver, Accident Prevention Course, Driver Training, Good Driver [...]
This is a class that new drivers take in order to learn how to drive and get their license. It is available to anyone and must be taught by a “Certified Instructor.”
This is a change or amendment to your policy to specifically exclude certain drivers from coverage under your auto insurance.
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 [...]
Some insurance companies offer a discount for having taken a driver training course from a certified instructor. You will need a certificate verifying that the course was completed.
Any moving violations you have been issued, and any reported accidents in which you have been involved are filed with the department of motor vehicles in your state and become part of your driving record.
This refers to the installation of an air bag system for both the driver and front seat passenger of a vehicle.
A person is considered DUI or DWI when he/she is driving a motor vehicle and has a blood alcohol level that exceeds the state limit or when he/she operates a motor vehicle after having used drugs.
A dune buggy is a motor vehicle designed or modified for use principally off road on rugged terrain.
These initials stand for “Driving While Intoxicated” due to use of alcohol or drugs. A person is considered DWI when he or she is driving a motor vehicle and has a blood alcohol or drug level that exceeds the state [...]
This refers to a portion of policy premium that has been used up during the term of the policy. For example, six months into a one-year policy, half the total premium has been earned.
This reflects the insurance company’s profits over given periods of time.
The day upon which a policy first becomes eligible to pay covered losses.
An electric auto is a motor vehicle of the private passenger type that is run by electric power and is not used for commercial purposes.
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 [...]
An estimated premium is an approximate cost for your insurance coverage. Until the insurance company performs underwriting to obtain actual premiums for your policy.
Ex gratia is Latin for “from favor.” An ex gratia payment may be made by an insurance company to an insured even if the company feels they are not really required to do so. In some cases, the company may [...]
These are losses that are not covered by your automotive policy. They can include: + Drivers excluded from the policy + A driver covered on your policy who used the car to intentionally cause bodily injury or property damage + [...]
This is an insurance policy designed to provide additional coverage over one or more primary policies, such as home and auto. It does not pay a loss until the loss amount exceeds the coverage limits on the primary policy.
An exotic vehicle is a one of a kind, irreplaceable, or one of a “limited production” of vehicles made. For example, Errol Flynn’s “Dusenberg” or the “DeLorean”. Exotic vehicles are either one-of-a-kind or limited edition vehicles that cannot be replaced.
This is the date that your insurance coverage ends.
Your potential for accidents and other losses is called exposure. It’s measured by insurance companies in determining premiums and whether or not they will offer insurance. The more you drive, the more exposure you have to accidents and other potential [...]
This means the auto is principally garaged on a farm or ranch, and is not customarily used for going to or from work or business, other than farming or ranching. It is also not used for pleasure driving, or for [...]
If you are in an accident, you may be required by your state laws to show proof of insurance or the ability to pay for damages you cause to others. This proof or evidence needs to be kept in your [...]
This is coverage provided for the insured’s property or person. Coverages under this category are: Medical, Wage Loss, Replacement Services, Survivors/Funeral Benefits, Required Optional Coverage/Required Deductibles, and Primacy of Benefits. Limits are specific to each state.
This is when the policy is cancelled as of its renewal or issue date. In such cases, there is no earned premium or any paid premium that needs to be refunded.
This is an accidental, chance happening.
This is an intentional false statement or misrepresentation of the facts made with the intent to deceive another party.
Insurance that provides payment of all possible insured losses is called full coverage. The term doesn’t in any way specify coverage limits. That means, for example, you could have full coverage, but only for the minimum limits of liability required [...]
This is typically provided if you or a family member dies in any car crash. The availability and amount of this benefit will vary by state, and will depend on the insurance company.
Funeral benefits refer to amounts that can be paid to the victim’s survivors for burial expenses. Limits are specific to each state.
This is the specific injury or medical expenses required in order for the victim or survivors to sue in tort for non-economic loss. Limits are specific to each state. See “Coverages Required in Your State”.
A golf cart is a three or four wheel motor vehicle with limited speed capabilities designed to carry golfers and their equipment around a golf course.
Generally insurers offer a discount to people who meet a certain criteria of safe driving. The definition of a good driver, however, varies from state to state and company to company.
Policies vary among insurers. Generally, in order to qualify for this discount, the insured needs to provide a current copy of the student’s report card showing a “B” grade average or better, and a signed Good Student Driver Form to [...]
This is insurance which a bank or lender puts on your auto to protect their interest in the vehicle. It is used if you do not provide insurance, or the insurance lapses, or they haven’t received proof of insurance from [...]
This refers to a driver or group of drivers who are considered to be more likely to have an accident or loss than normal drivers.
These are autos that are leased, hired, rented or borrowed, but not owned by the insured or members of the households.
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 [...]
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 [...]
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, [...]
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. [...]
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 [...]
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 [...]
A card is given to the insured as proof of insurance. In the event you’re in an accident, it contains your name and address, policy number, expiration date, insurance company and the vehicle insured. This identification card is generally issued [...]
This is a policy that has been issued and is currently providing coverage.
This coverage specifies which persons will be entitled to benefits as referenced by the No-Fault laws and the policy for an accident on the state in which the policy was written. See “Coverages Required in Your State”, in the “Library” [...]
In states where this is available, it covers a specified percentage of lost salary and wages when your injuries from a covered accident keep you from working. The covered portion is typically paid regardless of other payments you might have [...]
This is to restore the victim of a loss to the same position as before the loss occurred. However, the insured is not supposed to profit from an insured loss.
An independent contractor, hiring out to insurance companies for the investigation and settlement of claims, is known as an independent adjuster. He or she represents the interests of insurance companies.
This is a system within which independent contractors, known as agents, sell and service insurance solely on a commission or fee basis. They usually have appointments with one or more insurance companies. These carriers acknowledge that they recognize the agent’s [...]
This is the competitiveness of the insurance company’s current products compared to other products currently available in the industry.
Risks that are specific to a certain industry. For example, the profitability of insurance companies writing deferred fixed-rate annuities is more heavily impacted by large shifts up or down, in market interest rates than industrial companies or even other insurance [...]
An economic period characterized by rising prices, low unemployment, an expanding economy and erosion of consumer’s purchasing power due to the higher cost of living. Inflation implies that the value of the goods or services has not changed-only the cost [...]
This is the financial interest a person or party has in the vehicle being insured under an insurance policy.
This is a decision by the insurance company that the vehicle(s) or driver(s) being insured are an acceptable risk.
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