Insurance Glossary

Below is a list of insurance definitions to help you gather the information you need. If you have any further questions, please contact us.

Accidental Death and Dismemberment
Optional coverage that supplements other first party benefits. Applies to designated insureds in the event of death or dismemberment resulting from injuries sustained while occupying the insured vehicle.

Additional Insured
A person or party, other than the policyholder, who is added to a policy so that they will also be covered by that policy.

After-Market
A vehicle accessory or alteration purchased from a company or vendor other than the manufacturer.

Alarm Device
A motor vehicle’s horn, bell, siren or other sounding device that is easily audible at 300 feet.

Altered Vehicle
A vehicle whose engine has been modified from manufacturer's specifications to enhance speed or performance.

Antique
A vehicle that has a model year that is over 25 years old

Anti-Hot-Wiring Circuit
A circuit or method that prevents a motor vehicle from starting, including ignition interrupts, starter interrupts, or fuel interrupts.

Anti-Theft Device
A device that helps prevent vandalism to or theft of a motor vehicle or its contents.

Anti-Theft Device Discount
This discount may be available to policyholders who can demonstrate that they have installed an anti-theft device in their automobile. The availability and the amount of this discount are contingent upon both the location of the garaging address and type of anti-theft device installed. See category descriptions for details.

Auto Death Indemnity and Total Disability Coverages
These coverages cannot be purchased individually. The specific terms and conditions of these coverages should be discussed with an agent.

     

Auto Death Indemnity pays a lump sum in the event that the named insured is killed in an auto accident.

Total Disability provides a weekly payment in the event of bodily injury to the named inured which prevents the performance of normal duties.

Automatic Shutoff and Reset
A system by which an alarm device sounds for not more than four minutes, shuts off, and immediately rearms itself.

Backup Battery
An auxiliary power source that trips an alarm device if the main power source is disconnected or if wires to the alarm device are cut or disconnected.

Carpool Discount
This discount is available to policyholders who can demonstrate they are part of a car pool. To qualify, the vehicle must be driven to work less than 50% of the time, or less than 2.5 days a week in a car pool, or use mass transit.

Category

    Texas
    Category I
Any of the following:
1.   An anti-hot-wiring circuit
2. An alarm device that is activated by a door sensor, hood sensor, and trunk sensor.
3. A window identification system.
4. An armored steel collar that covers the steering column, especially to prevent access to the ignition system.

Category II
Category I plus anti-hot-wiring circuit, automatic shutoff and reset and two or more of the following:
1.  Glass sensor.
2.  Vibration sensor.
3.  Motion sensor.
4.  Ultrasonic sensor.

Category III
Category II plus a hood restraint and backup battery.

Category IV
Category III plus a system using a passive method of activating or deactivating the alarm system.

Category V
Category IV plus a stolen vehicle recovery system.


Illinois
    Category I
A.   A non-passive anti-hot-wiring circuit. The switch must be installed so that it is not visible from the driver’s position when the driver is seated unless protected by a separately installed lock.
 
B. A non-passive operated alarm meeting the following standards:
1)   The alarm must be triggered by entry of doors, hood, and trunk.
2) The hood must be equipped with either a hood lock and latch mechanism or an inside hood control.
3) If the system is equipped with a motion detector, the alarm must sound for no more than ten minutes and upon ceasing, the alarm must reset itself.
4) The alarm must be installed in the engine compartment so as to be inaccessible without opening the hood.
5) The switch must be installed so that it is not visible from the driver’s seat unless protected by a separately installed lock.
6) If the system is internally inactivated, the maximum time delay permitted to disarm the system after re-entry is 20 seconds.
 
C. Window identification system.
This discount may be applied to a vehicle with an external hood release.

Category II
A.   A passive anti-theft system meeting the standards described in Category III (A) but which also includes a motion detection device which cannot be disarmed independently from the remainder of the system.
 
B. A non-passive internally operated alarm meeting the criteria of Category I (B) and equipped with a forced action prompter which activates the horn or flashes the headlights for a minimum of five minutes upon removing the key without first setting the alarm.
 
C. High Security Ignition Replacement Lock which cannot be removed using a conventional slide hammer or lock puller equipment installed in a vehicle with a metal steering wheel housing.

Category III
A.   A passive anti-theft system which meets the following criteria:
 
1)   The alarm must be triggered by entry of doors, hood, and trunk.
2) The hood must be equipped with either a hood lock and latch mechanism or an inside hood latch control.
3) If equipped with a motion detector, the alarm must sound for no more than ten minutes and upon ceasing, must reset itself.
4) The alarm must be installed in the engine compartment so as to be inaccessible without opening the hood.
5) The maximum time delay permitted to disarm the system after re-entry is 20 seconds.
6) If equipped with a motion detection device which sounds the alarm upon lifting or shaking the automobile, provision must be made for separately disarming the shaker switch independently of the remainder of the system.
7) The system is equipped with either a redundant starting means or an internal hood lock.
 
B.   Passive fuel cut-off switch requires the driver to trip a switch to open the fuel line each time the car is started and which meets the following criteria:
1)   The fuel line must be blocked when the power is off.
2) The switch to open the fuel line must be well hidden from view but accessible to the driver from the driver’s seat.
3) In normal operation, the automobile must not be able to be started unless the fuel cut-off switch is tripped and the fuel line is opened.
4) A parking/service attendant override switch may be provided. It must be disguised or hidden from view.
 
C.   Passive ignition cut-off system. This system disables one or more components such that the engine cannot be started or hot-wired. Such device must meet these criteria:
1)   If designed to disable the ignition circuit at a present engine speed, the ignition must cut off automatically as soon as the engine reaches a speed in the range of 1000 to 1700 RPM.
2) The disconnect/grounding wiring must blend with factory installed wiring.
3) A push button or other type of disarm switch must be disguised or hidden from view unless operated by a separately installed lock.
4) A parking service attendant overrider switch may be provided but must be disguised or hidden from view.

CB / Cell Phone Coverage
This optional coverage provides additional coverage if there is a loss or damage to a citizens band radio or similar two-way radio or cellular phone. Collision and Comprehensive coverages usually do not cover loss or damage to these devices unless they are permanently installed in your car in a location specifically designed by the auto manufacturer for the device.

Collision Coverage
See Physical Damage Coverage

Comprehensive Coverage
See Physical Damage Coverage

Condominium Insurance
Designed exclusively for you, your condominium and your personal belongings.

Construction Type
Refers to the building method used to construct your residence.

 
  • Frame - a building with frame (wood or metal) walls on wood supports.
  • Masonry - a building with brick or masonry walls.
  • Brick Veneered - a building with frame walls covered with brick or masonry.

Continuous Insurance
Policyholders who are described as continuously insured have been covered by one or more insurance companies without any lapse in coverage. Coverage must exist up to the effective date of the new coverage to qualify as continuously insured. So if your policy expired yesterday, and you are trying to secure coverage today, you have not maintained continuous insurance.

Customization
Any add-ons or accessories (not related to engine performance) that were added after the vehicle was originally manufactured.

Declarations Page
Shows the factual information essential to the insurance contract, such as the policyholder's name and address, a description of what is being insured (i.e. vehicle), the coverages that apply, the limits or deductibles of the coverages, and the premiums to be paid.

Deductible
A certain dollar amount specified in some insurance policies, beyond which insurance protection begins. The insured assumes responsibility for losses up to the deductible amount, and then the company pays losses over that amount up to the policy limit. Deductibles apply on a per occurrence basis.

Discount
A reduction in premium based upon meeting certain criteria. For example, a driver who has completed a Driver Improvement Course may be eligible for a discount.

Door Sensor
A mechanical switch that activates the alarm device.

Driver Improvement Course
A defensive driver training course typically taken by drivers age 55 or older

Driver License Number
In order to verify the information you provide, certain reports must be obtained which require a driver license number.

Driver's Education Course
A course usually taken by unlicensed drivers in order to obtain a driver's license

Effective Date
The date insurance coverage begins. This date cannot be more than 30 days from today, nor can it be prior to today.

Exclusion
An insurance policy term that details what is not covered by a given insurance policy. Some policies may not cover certain losses that are excluded. An exclusion may also be used to exclude a driver from being covered from a policy in order to meet certain eligibility requirements.

Expiration Date
The date a current insurance policy expires. Among other places, this date can be found on the Declarations page, as well as an insurance identification (ID) card

Family Compensation
This coverage is very similar to Medical Payments coverage. The primary difference is that Family Compensation coverage provides an additional payment in the event that any passengers in your vehicle are killed as a result of an accident. Family Compensation coverage can only be included if Bodily Injury and Property Damage coverages have also been purchased. Medical Payments and Family Compensation cannot exist on the same policy.

Fire Wall
A wall with qualities of fire resistance and structural stability, which subdivides a building to control the spread of fire.

Garaging Location
The address and/or ZIP code where an insured vehicle is principally parked or garaged. Usually this is the location of the policyholder's primary residence.

Glass Sensor
An electronic device that activates the alarm device if it detects the sound of breaking glass or metal in contact with glass.

Good Student Discount
This is a premium discount available to a driver who is a student and who meets at least one of the following: has a B or better grade point average, is ranked in the top 20% of their class, has a numerical GPA of at least 3.0, or is included on the "Dean's List" or "Honor Roll". In order to receive this discount, proof of qualification is required.

Hood Restraint
A device preventing full access to under-hood components, including chain restraints that allow hood opening a maximum of four inches, a mechanical or electrical device that physically locks the hood down, or a mechanical or electrical device that prevents the factory supplied hood mechanism from opening.

Hood Sensor
A mechanical switch that activates the alarm device.

Injury Liability Coverage
See Liability Coverage

Insured
An individual or group that is covered by an insurance policy

Liability Coverage (Auto)
    Liability coverage consists of two parts, a) bodily injury coverage and b) property damage coverage. Liability insurance pays the losses of other people which you cause unintentionally or through negligence.

Bodily injury liability coverage pays medical costs of others and your legal defense costs if your car injures or kills someone. The limits of coverage are usually displayed as two numbers, such as 100/300. The first number is the limit per person injured or killed, and the second number is the limit per accident.

Property damage liability coverage pays claims against you if you damage someone else's car or property.

Liability Coverage (Homeowners)
Liability insurance provides protection for the personal actions of an individual, which cause bodily injury or property damage to another, subject to exclusions.

Lienholder
In most cases, this is the provider of a car loan. The lienholder is a party to whom payment is first made when a vehicle is damaged beyond repair.

Limits
The maximum an insurance company will pay for a covered loss. Limits are specified on the Declarations page and in the policy terms.

Lock
A device primarily designed to prevent the illegal operation of a switch, latch, or other mechanism.

Loss of Use – Auto
Should your vehicle be un-driveable following a covered incident, this optional coverage will provide limited reimbursement for transportation expenses. There are two available levels of coverage: The standard level typically provides $15 a day with a maximum of $300 per accident, while the “Broad Form” normally provides $25 a day with a maximum of $800 per accident. The actual amount of coverage provided and the cost of this option, may vary by state.

Loss of Use (Rental Reimbursement) Coverage
Accepting this option provides reimbursement for transportation expenses up to $15.00 per day ($450.00 maximum) should your car be un-driveable due to a covered collision or comprehensive loss.

Medical Payments (Med Pay)
Provides payment for medical expenses resulting from an auto accident. Med Pay is intended for the immediate medical treatment of passengers in your vehicle who may have been injured in an accident without establishing fault or liability beforehand. This coverage is subject to specific dollar limits per incident. Med Pay can only be included if Bodily Injury and Property Damage coverages have also been purchased. Med Pay and Family Compensation cannot exist on the same policy.

Motion Sensor
A mechanical device that activates the alarm device if the vehicle is jacked up or towed.

MVR
Abbreviation for Motor Vehicle Report. This report contains a record of a driver's driving history and will include details of any accidents or violations.

Non-passive anti-theft device
An anti-theft device that requires manual activation.

Occasional Driver
A driver who is not the usual or most frequent driver of the vehicle. Often times this is a teenage or youthful driver living at home.

Occupancy Type

 
  • Primary - principle location where the policyholder resides
  • Secondary/Seasonal - an additional location where the policyholder resides on an occasional basis (seasonal or secondary use).

Passive anti-theft device
An anti-theft device or system which is activated automatically when the driver turns the ignition key to the off position and the key is removed.

Payment Plans
The following are the types of plans from which you may choose to pay your insurance premium.

      Full This is a method of payment in which the entire premium is charged to your credit card. Under this plan your premium is considered paid-in-full, and you will not receive any future bills during this term.

2 Payments This method charges half of the insurance premium plus a transaction fee to your credit card for the downpayment, and you will be billed for the remaining amount.

Electronic Funds Transfer (EFT) This method of payment withdraws a preset amount from your bank account each month. In order to setup this process, the Bank Name, Acount Type, Account Number, Routing Number and day of the month you would like the funds withdrawn (Deduction Day) need to be indicated. Your initial down payment of two months worth of premium will be charged to your credit card. The remaining installments will be obtained monthly from your bank account starting in the second month.

Personal Injury Protection Coverage (PIP)
This coverage pays for medical bills and/or funeral expenses if a covered driver or accompanying passengers are injured or killed while in an insured vehicle, regardless of fault of an accident. PIP sometimes covers lost wages and other losses. For an additional premium, extended limits to this coverage can sometimes be purchased, which is known as Additional PIP.

Physical Damage Coverage
     

Comprehensive coverage insures your automobile against physical damage losses other than those caused by collision or upset. Comprehensive coverage usually includes damage caused by theft, vandalism, and contact with animals or flying objects.

In some states, you may be able to select special deductible options with “Full Glass” coverage. Policyholders with full glass coverage would not be assessed a deductible amount for claims involving only the repair or replacement of their vehicle’s glass components. A policy with this option would be slightly more expensive.

Collision Coverage is optional insurance which pays for damage to your car caused by collision with another car or object, or by rolling the car over. Frequently required if you have a car loan.

Policyholder / Named Insured
The person who purchases the insurance policy and in whose name the policy is issued

Policy Term
The dates during which an insurance policy is in effect

Premium
The price of an insurance policy for a specified risk and period of time

Primary (Vehicle) Use
This is the vehicle's typical use, which may be pleasure, commute or business. Commute involves trips to and from work or school. Business use consists of any work-related use, such as deliveries or trips to the post office. (Please note that we cannot accommodate business use online at this time.) Using a vehicle for any social or fun purposes would be considered Pleasure use.

Primary Residence
The place you will live for the majority of the term of your policy

Principal Driver
The person who drives the vehicle most often

Property Damage Liability Coverage
See Liability Coverage

Redundant Starting Means
A switch in addition to the primary ignition switch which makes the ignition or starter system inoperable and which is not visible from the driver’s position or which is disguised or protected by a separately installed lock.

Resident Child
A minor child who is a resident in your household. If a driver has custody of a minor child that lives in the household, the driver may be eligible for a reduced rate.

Social Security Number
In order to verify the information you provide, certain reports must be obtained which may require a social security number to identify you.

SR-22
A document that is used to provide proof of financial responsibility. This is usually required by a court of law for a driver who has been convicted of certain traffic violations.

Stolen Vehicle Recovery System
An independently operated system that automatically notifies a monitoring center if a motor vehicle equipped with the system is started by any means other than through use of an ignition key.

Tenant Insurance
Designed exclusively for you and your personal belongings.

Total Cost of Accident
This is the total cost that was paid out by you or any other party (including insurance companies) for damage to your or any other property. This includes the amount of your deductible. For example, if you were involved in an accident in which your insurance company paid out $350 on top of your $100 deductible, then the total cost of the accident was $450.

Towing & Labor Coverage
Provides coverage for charges related to towing and labor if your vehicle is disabled. Labor costs are covered only at the place where the vehicle is disabled. Cost of repair parts is not covered. Provides up to $50.00 coverage per occurrence, ($100.00 for motorhomes).

Townhouse
One of a row of houses connected by common side-walls.

Trailing Documents
Paper documentation sent to, or from, a policyholder to verify certain pieces of information such as qualification for discount. For example, if it was indicated that a driver completed a Defensive Driver Training Course, then a certificate of completion will be required as proof.

Trunk Sensor
A mechanical switch that activates the alarm device if the trunk is opened while the alarm system is armed.

Ultrasonic Sensor
An electronic device that activates the alarm device if an ultrasonic field is disturbed inside the motor vehicle.

Underinsured Motorist Coverage
This coverage protects against the underinsured driver, or one whose limits of bodily injury liability coverage are insufficient to pay the bodily injury damages you are legally entitled to collect. This coverage pays the difference between the amount paid by the other driver and your uninsured motorist limits, or the amount of damages, whichever is less, up to the limit on the policy.

Uninsured Motorist Coverage (BI)
This coverage protects the driver and passengers in the car for injuries caused by a driver with no liability coverage. This also provides protection for injuries caused by a hit-and-run driver, or by an underinsured driver in some states.

Uninsured Motorist Coverage (PD)
This coverage pays for damage to your vehicle caused by a driver with no liability insurance.

Vibration Sensor
A mechanical or electronic device that activates the alarm device if any part of the vehicle is bumped, causing vibration.

VIN
Abbreviation for Vehicle Identification Number. This is a unique number (usually 17 digits) that contains such information as the vehicle's serial number, year, make, model and body type. It can usually be found on the vehicle at the base of the windshield on the driver's side dashboard. It can also be found on your current insurance policy or insurance identification card. Providing a VIN will allow us to give a more accurate quote.

Violation
In plain terms, any time you are cited or receive a "traffic ticket" from a law enforcement officer, it is considered a violation. These violations fall into two general categories: major and minor

     

Major Violation
A more severe traffic infraction, such as racing, Hit & Run, driving without a license or any felony involving use of the vehicle. Often times, this type of violation involves a court appearance.

Minor Violation
A less severe traffic infraction (other than speeding) such as careless driving, failure to dim lights, driving without proof of insurance or driving through a safety zone

Window Identification System
A system under which the motor vehicle identification number is permanently marked on at least two windows of the motor vehicle other than the small vent windows.

Waiver of Collision Deductible Coverage
Available only for vehicles with Collision coverage and Uninsured/Underinsured Motorists - Bodily Injury, this coverage pays the amount of your collision deductible when your vehicle is damaged by an uninsured motorist who is legally liable. Coverage applies when there is actual physical contact and the insured can identify the uninsured driver.

The purpose of this glossary is to provide you with definitions of some of the basic insurance terms. The glossary is not intended to provide you all of the information you may need, or with advice, to purchase coverage that meets your insurance needs. If you need assistance, please contact us.

 
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