Glossary

The Auto Insurance Glossary A to Z

Agent:A representative for any insurance company who sells on a commission basis. An agent may be classified as an “exclusive” or “non-agent” agent.

Actual Cash Value:The fair market value of your car; replacement amount minus depreciation.

Actuary:An actuary keeps auto insurance companies profiting and financially sound by setting costs, analyzing trends and determining how much to reserve to pay claims, as well as computing insurance risks and premiums.

Accident Forgiveness:In over forty states, any accident-free policy holder of five years qualifies for the Accident Forgiveness program wherein the auto insurance company will not add surcharge to the premium after your next at-fault accident.

Adjuster:See Claim Adjuster

Adverse Carrier:Term referring to the other party’s insurance company

After-Market Parts:See Competitive Auto Repair Parts

Amendment:Any change in the basic policy contract which alters the policy or adds endorsement on any of the contract’s parts.

Anti-Theft Device:Any gadget that prevents auto theft where any car equipped with such is entitled to a discount on insurance premiums.

Agreed Price:The cost of repairs adhered to by the auto damage adjuster, body shop representative or any independent appraiser.

Appraisal:A process whereby value of property and damages incurred are determined, and which is usually performed by an impartial professional.

Anti-Lock Braking System (ABS):A mechanism which is computer controlled at high pressure to aid the vehicles normal braking system and allows all wheels to decrease speed at the same rate, thereby preventing loss of control

Arbitration:A process of settling a dispute by a disinterested and impartial party, and is usually used in place of litigation.

Assigned Risk (AIP):Any vehicle owner or drivers who do not qualify for insurance in the regular market and must secure state assigned risk plan and its coverage. This risk plan specifies that each company must accept a commensurate share of these drivers/owners.

At-Fault:Any person or party found legally liable for damages and injuries in an accident.

Auto Damage (AD):A division of the claims department handling auto claims.

Assured:Any driver or vehicle owner who is insured and has insurance policy; Also anyone who is a policy holder;

Auto Damage Adjuster: Person responsible for writing the estimated cost of repairs for damaged vehicles; Gives information of repair process, total loss settlement and rental vehicle.

Auto Insurance:Legal document that provides protection from losses resulting from owning and operating any vehicle; The insurance cover losses to the insured person’s property and losses for which he is liable as a result of owning or operating an auto.

Auto Theft:Theft of a car is a type of loss covered under comprehensive coverage.

Binder:A temporary agreement stating a policy is in effect and likely used in cases to protect a policyholder when it is not possible to immediately issue a policy.

Bodily Injury:Injury sustained by a person in a car accident.

Bodily Injury Liability Coverage: Pays cost of damages for any death or injuries resulting in an accident where a policyholder is at fault, and provides legal defense as well. This coverage is subject to the terms, limits and conditions of a policy contract.
Cancellation:The term referring to a termination of any insurance contract by an insured or insurer before end of policy period.

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