Some auto insurance carriers use technical jargon that may deceive customers into expensive and unnecessary coverages. At Plymouth Rock Assurance, we understand that you most likely will never need to know how Bodily Injury differs from Collision, except when purchasing an auto insurance policy. Unlike other car insurance carriers, we make sure you know what you are buying from us and that it fits your family’s needs.
Please note these terms and definitions are provided for informational purposes only, and are not intended to alter or modify any auto insurance policy. Please review your insurance policy for full details about coverages and other terms. In the case of any inconsistency, the terms and definitions of the policy contract will control their use.
Common Auto Insurance Terms Definitions
- Additional Interest Insured: A lienholder, leasing company or person (i.e., a parent) that has an ownership interest in the car.
- Adjuster: An employee or representative of the insurance company who investigates the damage (by physical inspection of the involved vehicles and property, examination of documents and talking with involved persons) and settles the claim.
- Anti-Theft Device: A device that helps prevent or deter vehicle theft. Active devices can be used to track and find a vehicle. Passive devices prevent the vehicle from being stolen in the first place by disabling it: a steering wheel lock; a car alarm; a hidden kill switch; a fuel cutoff valve.
- Basic Limits: The minimum amount of liability limits that can be carried as determined by state regulation. See Limits.
- Bodily Injury: Means physical injuries or death suffered by a person. If an insured person is legally liable for an accident, bodily injury coverage pays for the injuries/death of persons involved in the accident other than the insured driver. Bodily injury coverage may also pay for legal defense, if the insured person is sued. Exclusions may apply.
- Cancellation: Termination of the policy before its expiration date, either by the insurance company or by the policyholder.
- Claim: A request to the insurance company by the policyholder for payment of a loss in accordance with the policy contract.
- Collision Insurance: Insurance covering physical damage to the insured’s automobile directly resulting from contact with another object
- Comprehensive Coverage: Insurance covering physical damage to the insured’s car caused by a covered event other than collision
- Continuously Insured: Having auto insurance coverage for an uninterrupted period of time.
- Covered Autos: All vehicles listed on the policy, or a substitute vehicle used under certain conditions.
- Declarations: The part of a policy contract that lists each coverage, limits for each coverage, premium for each coverage, vehicles covered by the policy, the policy term, the insured persons, and other key policy information.
- Deductible: The dollar amount an insured selects and agrees to pay out of pocket, in the event of a claim. Generally, deductibles are deducted from the claim payment, depending on coverage and fault.
- Depreciation: Reduction in the value of a vehicle due to age, wear, damage over time, and other factors.
- Drivers: Licensed operators who drive the vehicle(s) insured on the policy are listed as rated drivers on the policy. Licensed operators who live in the same household as the named insured, but do not drive the covered autos and have their own insurance, are listed on the policy but are not rated on the policy.
- Effective Date: The date on which the policy coverage begins (at 12:01 am).
- Endorsements: Changes to the original policy contract that add, reduce, or modify coverage and are made after the policy effective date. An example would be an additional car added after the policy effective date or optional and mandatory forms that amend coverage.
- Exclusion: A restriction in a policy contract that limits or excludes coverage for certain perils, persons, property or locations.
- Expiration Date: The date on which the policy coverage ends (at a specified time) if the policy is not renewed.
- Garaging Location: The location where the vehicle is parked most of the time.
- Insured (or Insured Person): A person listed on the policy to which coverage may apply.
- Liability Coverage: Protects the insured from having to pay damages for injury to others or to the property of others.
- Limit of Liability: The maximum the insurance company agrees to pay in the case of a loss in accordance with the policy contract (may be subject to restrictions).
- Limits: The amount of insurance coverage purchased. The insurance company will only pay up to the dollar value of the limit selected. See Basic Limits.
- Non-renewal: When an insurer declines to continue insurance coverage after the policy expiration date is reached.
- Peril: The cause of a possible accident, loss, or claim.
- Personal Injury Protection (PIP): Coverage for all eligible injured persons for medical expenses, loss of earnings, essential services, death benefits and funeral expenses up to limits and definitions in the policy contract. Exclusions may apply.
- Premium: The amount paid to the insurance company by the policyholder in exchange for insurance coverage.
- Property Damage Coverage: Coverage for damage to another person’s property resulting from an accident. Property damage coverage may also pay for legal defense, if the insured person is sued. Exclusions may apply.
- SR-22: Documentation required by the state demonstrating proof of financial responsibility for persons convicted of certain traffic violations
- Subrogation: The process by which an insurance company seeks reimbursement from an at-fault third-party after it has already paid a claim for an accident on behalf of its insured.
- Term: The period of time beginning with the effective date and ending with the expiration date of the policy coverage.
- Total Loss: A claim requiring the replacement of a vehicle since repair costs exceed the actual cash value of the vehicle
- Towing Coverage: Coverage that pays for towing charges and the cost of labor done at the scene of a breakdown for a covered automobile.
- Underwriting: The process of evaluating the insurability of an applicant for insurance coverage, and issuing a policy if the risk meets the Company’s acceptance criteria.
- Uninsured/Underinsured Motorist Coverage: Coverage that pays for property damage, lost wages and bodily injuries, including death, that the insured person and occupants of the insured vehicle sustain, if caused by a driver or owner of a vehicle who has no insurance (or does not have enough insurance) and is legally liable for an accident. Certain exclusions may apply.
