Glossary of Auto Insurance Terms. List 1

Actual Cash Value | Fair market value of an item at the time it was damaged, stolen or destroyed. After a loss, your company will review the condition of your car's body, interior, tires, and additional equipment. Based on the pre-accident condition of the car, a claim adjuster locates similar models for sale in your area, and uses those prices to determine the Actual Cash Value. Actuary A specialist in the mathematics of risk, especially as it relates to insurance calculations such as life expectancy, prediction of accident frequency, and loss reserving. Adjuster Individual employed by an insurance company to settle claims brought by policyholders or claimants. The adjuster evaluates each claim and then makes payment based on the coverage available in its policy contract. Appraisal A professional, formal, written estimation of the value of property. Damage appraisals may be completed by an insurance adjuster or vehicle repair specialist. Assigned Risk Plan | State-managed auto insurance plan for individuals who cannot obtain conventional liability coverage because of their poor driving records. These drivers are placed in a residual market with insurance companies assigned to write policies for them at higher prices. Assigned risk plans also exist for health insurance. Attach To seize property or assets, or to obtain a legal writ granting the right to seize the property or assets. This usually occurs when an individual has outstanding debt, is financially unable to pay the debt in cash, and has assets of sufficient value to cover the amount of the debt. Bodily Injury Liability Coverage | Part of an auto insurance policy that covers you, up to the policy limits, for car accidents that result in bodily injuries to other drivers or pedestrians for which you are legally at fault. Covered losses generally include medical expenses, pain and suffering, and lost income. Legal defense costs are covered if you are sued as a result of the accident. Carrier Insurance company that actually underwrites and issues the insurance policy. The term refers to the fact that the company carries (or assumes) certain risks for the policyholder. Casualty Liability or loss resulting from an accident. Claim Request by an insured for the insurance company to cover an incurred loss. A claim may be filed online, by phone or in writing. Claimant One who submits a claim for an incurred loss. Collateral Asset pledged to a lender until a loan is repaid. If the borrower defaults, the lender has the legal right to seize the collateral and sell it to pay off the loan. Comprehensive and Collision coverages are required by lenders when a car is the collateral for a loan. Collision Coverage | Collision coverage pays for damage to your car caused by an impact with another vehicle or object or a rollover. Collision coverage includes a deductible, such $250 or $500. You are responsible for paying the deductible when you get the damage repaired. For example, if the damage was $1,500 and you have a $250 deductible, your company pays $1,250 toward the repair costs. Combined Single Limit | Combined single limit (CSL) auto insurance policies have a single amount for liability payment limits for both property damage and bodily injury. This is in contrast to a split limit policy that has separate limits for bodily injury per person, bodily injury per accident, and property damage per accident. Community Property | Marital property as defined by state law under which spouses own equal interests in property acquired during a marriage. This does not include property brought to the marriage or acquired by gift or inheritance. Comprehensive Coverage | Comprehensive coverage pays for damage caused by hazards other than collision, such as fire, theft, explosion, windstorm, hail, water or contact with an animal. Like Collision coverage, Comp coverage includes a deductible, such as $250 or $500. You pay the deductible when you get the car repaired or replaced. For example, if the cost to replace your stolen car is $10,000 and you have a $500 deductible, your company will pay you $9,500. Comprehensive Loss Underwriting Exchange (CLUE) | Claims history database created by ChoicePoint. Insurance companies can access your claims information when underwriting or rating a policy. Includes information such as date of loss, type of loss and amounts paid, and vehicle description. Consumer Price Index (CPI) | Measure of change in consumer prices, published monthly by the U.S. Bureau of Labor Statistics in the Department of Labor. This index is widely used as a cost-of-living benchmark to adjust Social Security payments and other payment schedules. The cost of insurance is part of the CPI. Coverage Forms | Attachments to an insurance policy to complete the coverage provided by the policy. Also know as endorsement forms. 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 policholders; the period for which the policy is in force; premiums payable; and the amount of coverage. Also know as a "dec page" or "dec sheet." Declination An insurer's refusal to insure an individual after careful evaluation of the application for insurance and any other relevant factors. Many states have specific rules that prohbit declination for poor credit or other factors that may be infairly discriminatory. Deductible The amount that must be paid out of pocket by the insured for covered losses before the insurance company pays a claim. Comprehensive and Collision coverages generally have a deductible of $250 or $500. Choosing a higher deductible will save money, but it’s a trade-off between saving money on your annual premium and having to pay the deductible if you have a loss. Deposit Premium | The premium deposit paid by a prospective policyholder when an application is made for an insurance policy. It is usually equal to at least the first month's estimated premium and is applied toward the total policy premium when billed. Depreciation In auto insurance, depreciation is used to determine the actual cash value of a vehicle, in the event it is determined to be a total loss. Factors such as miles driven, model year and overall condition will be used to determine the current value of the car. Dollar Threshold | In certain states with no-fault auto insurance, the dollar threshold prevents individuals from suing to recover for pain and suffering unless their medical expenses exceed a specified dollar amount, called the threshold. Driver Education Credit | Discount on auto insurance premiums for which young drivers become eligible upon completion of a driver education course. Available in certain states.