Glossary of Terms (Part 2)
July 2nd, 2008
Bodily Injury Coverage (BI) - BI pays for injuries to other people when the insured vehicle’s driver is legally at fault. This coverage is required in Colorado, New Mexico, Utah and Wyoming. The mandatory minimum limit is $25,000 per person.
Collision Coverage - Coverage for when your car is damaged as a result of colliding with another object-a brick wall, for example, or a rollover. This insurance applies only to the car. It doesn’t cover whatever the car collided with (that’s what your property damage liability is for). This coverage is optional.
Glossary of Terms (Part 4)
June 1st, 2008
Limits - The most an insurance company will pay for a specific insurance coverage. Individuals can choose the limit that meets their needs. Many states have laws that specify the minimum limits an insured must purchase.
No-Fault Auto Insurance - Laws permitting the individual automobile accident victim to collect monies directly from their own insurance company for medical and hospital expenses regardless of whose fault the accident was. The idea is to discourage lawsuits by allowing policyholders to recover financial losses from their own insurance company without having to prove that anyone is at fault in an accident. Motorists may only sue for severe injuries and for pain and suffering if their case meets certain conditions. Eight states, including Colorado and Utah, require that you meet a minimum dollar threshold to be able to bring a lawsuit over damages over and above your economic losses. Florida, Michigan, New Jersey, New York and Pennsylvania use a verbal description as a threshold (i.e. severe disfigurement, disability or death). In New Jersey, Pennsylvania and Kentucky, when they buy insurance, motorists may choose to reject the lawsuit threshold and keep their right to sue for any auto-related injuries.
Glossary of Terms (Part 3)
February 7th, 2008
Deductible - This is your out-of-pocket expense that you agree to pay for losses. The insurer agrees to pay for the amount of loss over the amount of the deductible. If you can afford to carry a higher deductible on collision and comprehensive coverage, you can substantially lower your costs.
Economic Benefits - Tangible, out-of-pocket expenses, such as medical expenses, rehabilitation expenses, lost wages and essential services.
Glossary of Terms (Part 1)
January 20th, 2008
If you feel like you need to take a foreign language course to “speak insurance” don’t worry, you’re not alone! But, you need to at least understand the basic auto insurance terms because they spell out what you are and aren’t covered for in your policy. Here is a translation of some basic insurance lingo:
25/50/15, 100/300/100, etc. - You will see three numbers when you are buying liability coverage. They represent (in the $ thousands) your liability limits for per person bodily injury, bodily injury for all persons injured in any one accident and property damage liability. Each state requires its own mandatory minimums.
Automobile Liability Insurance - Protection in case others hold you legally responsible for bodily injury and/or damage to property losses incurred as the result of a motor vehicle accident. In other words, coverage in case you cause an accident where there is either physical or property damage to other people. This is a general term that covers bodily injury (BI) liability and property damage (PD) liability.
Source: autoinsuranceadvocate.net
Glossary of Terms (Part 6)
January 10th, 2008
SR-22 - A document required by the court for individuals convicted of certain types of traffic violations that shows proof of financial responsibility.
Third party - In an insurance contract, a third party is anyone other than the policyholder and the family members covered under the insurance policy. The policyholder is the first party. The insurance company is the second party in the contract. Anyone else is a third party.
Glossary of Terms (Part 5)
January 5th, 2008
Preferred Provider Organization (PPO) - In 1991, Colorado enacted a statute that allows insurance companies to offer a “PPO” option. That means for a reduced rate, the consumer agrees to use a specific PPO for medical treatment for injuries suffered in auto accidents. This is an option only. Consumers can save up to 25-percent on the medical portion of their auto insurance premium.
Property Damage Liability (PD) - This coverage is for when you damage someone else’s property with your vehicle. Usually it’s someone’s car, but it includes property like buildings, utility poles and garage doors. This coverage is required in Colorado, New Mexico, Utah and Wyoming. The mandatory minimum limit is $50,000.