Coverage Definitions

Bodily injury liability:Covers other people's bodily injuries or death for which you are responsible. It also provides for a legal defense if another party in the accident files a lawsuit against you. Claims for bodily injury may be for such things as medical bills, loss of income or pain and suffering. In the event of a serious accident, you want enough insurance to cover a judgment against you in a lawsuit, without jeopardizing your personal assets. Bodily injury liability covers injury to people, not your vehicle. Therefore, it's a good idea to have the same level of coverage for all of your cars. Bodily Injury Liability does NOT cover you or other people on your policy. Coverage is limited to the terms and conditions contained in the policy.

Comprehensive physical damage coverage:Covers your vehicle, and sometimes other vehicles you may be driving for losses resulting from incidents other than collision. For example, comprehensive insurance covers damage to your car if it is stolen; or damaged by flood, fire, or animals. Pays to fix your vehicle less the deductible you choose. To keep your premiums low, select as high a deductible as you feel comfortable paying out of pocket. Coverage is limited to the terms and conditions contained in the policy.

Collision coverage:Covers damage to your car when your car hits, or is hit by, another vehicle, or other object. Pays to fix your vehicle less the deductible you choose. To keep your premiums low, select as large a deductible as you feel comfortable paying out of pocket. For older cars, consider dropping this coverage, since coverage is normally limited to the cash value of your car. Coverage is limited to the terms and conditions contained in the policy.

Medical payments:Covers medical expenses to you and your passengers injured in an accident. There may also be coverage if as a pedestrian a vehicle injures you. Does NOT matter who is at fault. Coverage is limited to the terms and conditions contained in the policy.

Uninsured motorist coverage:Covers bodily injuries to you and your passengers when the other person has no insurance or not enough insurance in a crash that is not your fault. In some states, there is also uninsured motorist coverage for damage to your vehicle. Given the large number of uninsured motorists, this is very important coverage to have, even in states with no-fault insurance. Coverage is limited to the terms and conditions contained in the policy

Personal Injury Protection coverage:Covers within the specified limits, the medical, hospital and funeral expenses of the insured, others in his vehicles and pedestrians struck by him. The basic coverage for the insured's own injuries on a first-party basis, without regard to fault. It is only available in certain states.

Property damage liability:Covers you if your car damages someone else's property. Usually it is their car, but it could be a fence, a house or any other property damaged in an accident. It also provides you with legal defense if another party files a lawsuit against you. It is a good idea to purchase enough of this insurance to cover the amount of damage your car might do to another vehicle or object. Coverage is limited to the terms and conditions contained in the policy.

Rental car reimbursement:Covers renting a car if your car isn't drivable or while your car is being repaired because of a covered accident.

Company Strength and Comparisons

A.M. Best provides an independent opinion of a company's financial strength, operating performance, and ability to meet its obligations to policyholders over the next 12 to 36 months. Their scoring of companies falls into these categories:
A++ and A+ (Superior) = superior ability to meet their ongoing obligations to policyholders
A and A- (Excellent) = excellent ability to meet their ongoing obligations to policyholders
B++ and B+ (Good) = good ability to meet their ongoing obligations to policyholders
B and B- (Fair) = fair ability to meet their ongoing obligations to policyholders
C++ and C+ (marginal) = marginal ability to meet their ongoing obligations to policyholders
C and C- (weak) = weak ability to meet their ongoing obligations to policyholders
D (poor) = weak ability to meet their ongoing obligations to policyholders

J.D. Power and Associates has developed and maintains one of the largest, most comprehensive historical customer satisfaction databases in existence, which includes feedback on virtually all aspects of the shopping, buying, and product and service ownership experience. Each Year J.D. Power and Associates surveys millions of consumers to understand their opinions and expectations regarding the products and services they purchased. Each company is then categorized by performance. Click here to view their current auto insurance provider ratings.

Weiss Ratings, Inc provides free lists of the strongest and weakest financial services companies in the nation. Those companies identified as the strongest are to be commended for this accomplishment. However, if you are doing business with a weak company, you may want to consider your other options along with the cost of making a switch. Click here to view their ratings of the strongest and weakest auto insurers.

Definition of Insurance Terms

Accident
A sudden fortuitous event.

Actual Cash Value (ACV)
The cost to replace an item of property at the time of loss, less an allowance for depreciation. Often used to determine amount of reimbursement for a loss.

Binder
An oral or written statement providing immediate insurance protection, valid for a specific period. Designed to provide temporary coverage until a policy can be issued or denied.

Bodily Injury
Usually defined to include physical harm, sickness, disease, or death resulting from any of these.

Claim
The assertion of a legal right against an insurer, that carries with it a demand for appropriate relief.

Collision
A type of physical damage insurance, which covers loss due to the insured object striking another object.

Comprehensive Coverage
A broad physical damage coverage which covers all property losses except collision and those perils or property which are specifically excluded.

Conditions
The portion of an insurance contract which sets forth the rights and duties of the insured and insurance company.

Contract
A legal agreement between two parties promising a certain performance in exchange for a certain consideration.

Declarations
The section of an insurance contract which shows who is insured, what property or risk is covered, when and where coverage is effective and how much coverage applies.

Deductible
Usually, a dollar amount the insured must pay on each loss to which the deductible applies. The insurance company pays the remainder of each covered loss up to the policy limits.

Driver Improvement Course
A voluntary refresher course available for drivers age fifty-five (55) and older to enhance their driving skills.

Endorsement
A document, which is attached to the policy and modifies or changes the original policy in some way.

Exclusion
Section of the insurance policy, which list property, perils, person, or situations which are not covered under the policy.

Financial Responsibility Law
State (applicable states) law which requires owners or operators of autos to provide evidence that they have the funds to pay for automobile losses for which they might become liable. Insurance is the usual method for providing this evidence to the state.

Fraud
A false statement intended to deceive the insurer and induce it to part with something of value or surrender a legal right. May void a policy.

Garage Location
The zip code where your vehicle is parked when not in use and usually corresponds to your primary residence.

Indemnity
A principle of insurance which provides that when a loss occurs, the insured should be restored to the approximate financial condition occupied before the loss occurred, no better, no worse.

Insurance
A contract whereby one undertakes to indemnify another, pay or allow a specified amount or a determinable benefit upon determinable contingencies.

Liability Insurance
Insures the individual for financial losses which arise out of the person's responsibilities to others imposed by law or contract.

Limits of Liability
The maximum amount of insurance the insurance company will pay for a particular loss, or for a loss during a period of time.

Named Insured
The first person in whose name the insurance policy is issued.

Occasional Driver
The person who is not the primary or principal driver of the vehicle.

Personal Injury Protection
A coverage provided in Auto policies in some states that provides coverage for the insured's own injuries on a first-party basis, without regard to fault.

Physical Damage
In auto insurance, damage or loss to the insured's own autos or autos in the insured's care, custody or control.

Policy
An insurance contract

Policy Expiration Date
The date when your current insurance policy expires. This date can be found on your current policy, Declaration page, insurance identification card or recent cancellation notice. This date is not to be confused with the date of your next payment or when your renewal payment is due.

Policy Term
The length of time that the policy is in force. Most companies offers annual and semi-annual policies.

Premium
An amount of money paid to an insurance company in return for insurance protection.

Primary Use
What your vehicle is mainly used for:
To/From Work: If you use your vehicle to drive to and from your work and/or school.
Business: If your vehicle is used for one or all of the following: used to make sales calls, used as vehicle for business trips to bank or post office, picking up supplies, going to different locations owned or leased by a partnership or corporation that have a business listed as and additional interest on the car
Farm: If your vehicle is used primarily on a farm, ranch or orchard Artisan If your vehicle is operated by you in a trade or business where the vehicle is: owned or leased by an individual operated solely by the named insured or other resident relatives used to transport tools or other materials where such transport is incidental to the insured's trade or business at no more than 2 job sites per day.

Principal Driver
The person who drives the car most often Private Passenger Autos Ordinary cars, station wagons and jeeps, utility autos (pick-ups, panel trucks and delivery vans of 1,500 lbs. or less, not used commercially) and utility trailers designed to be pulled by a private passenger auto.

Property Damage
A type of loss covered under many liability contracts. Property damage means physical injury to tangible property, including loss of use.

Salvage
Damaged property that may be retrieved, reconditioned, and sold to reduce an insured loss.

SR-22
A form which must be filed by the insurance company stating that auto liability insurance is in effect for a particular individual. Required when insurance is provided to an individual who was in an accident or was convicted of a traffic offense and was unable to show financial responsibility. Subrogation The transfer to the insurance company of the insured's right to collect for damages.

Uninsured/Underinsured Motorist
Automobile coverage designed to provide protection for the insured should he or she be included in an accident in which the driver at fault has no insurance (or not enough insurance) to cover the loss.

Vehicle Identification Number (VIN)
The vehicle identification number (VIN) on your vehicle. This number is usually found on the dashboard of your vehicle on the driver's side, and is usually listed on the vehicle registration and title. The VIN number is a combination of letters and numbers 17 characters in length that can be used to identify the make, model, and year of your car.

(Multiple Sources, including Department of Insurance: General Lines Agent and Customer Representative Manual, Tenth Edition)