Auto Insurance Terms
Adjuster – Car Insurance representative assigned to evaluate loss and determine damages.
Appraisal – Method of resolving a value dispute in a first-party claim.
Arbitration – Alternative to court-based litigation; an impartial third party determines damages.
Binder – Agreement putting auto insurance in force before the actual auto insurance contract is prepared.
Bodily injury coverage – Pays when you’re legally responsible for another person’s crash-related injuries.
Citations for driving while uninsured – It is against the law to drive without car insurance in Illinois. If you are stopped for another reason, and you don’t have a valid insurance I.D. card to show the police officer, you may receive a citation. If you are insured and can later provide a copy of your card to the court, that is usually the end of it. But if you were not insured at the time you were stopped, you can be convicted of driving uninsured. This carries a minimum fine of $500 and also requires a mandatory $100 fee to reinstate your registration.
Collision coverage – Pays for damage to your vehicle caused by an accident with another car or fixed object (tree). Savings tip: Raising your deductible will lower your car insurance rates.
Comprehensive coverage – Pays for damage to your vehicle caused by events such as theft, vandalism, hail, fire, or falling objects. Savings tip: Raising your deductible will lower your car insurance rates.
Coverage – Vehicle Insurance protection.
Coverage limits – Maximum amount the insurer will pay for any one claim.
Declarations – The “dec” page personalizes the policy. It’s where you’ll find your name, address, driver identification information, vehicle description, serial number, lien holder (if applicable), dollar limits and deductibles on selected coverage, beginning and ending dates when insurance is in force, policy identification number, and a list of endorsements amending the policy form.
Deductible – Amount you agree to pay out of pocket before the auto insurance company begins paying. Savings tip: Raising your deductible will lower your car insurance rates.
Endorsement – Optional coverage that alters the auto insurance contract, customizing it to the policyholder’s needs.
Exclusion – Provision in the policy that eliminates car insurance coverage for certain risks.
First-party coverage – Policyholder seeks damages through his/her auto insurance policy.
Full coverage auto insurance – Car Insurance policy that includes bodily injury, property damage, uninsured/underinsured motorist, comprehensive and
High-risk driver – Car Insurance companies may view any driver with tickets, convictions or accidents for driving under the influence (DUI) as a high-risk driver. Young and inexperienced drivers may also be classified as high-risk.
Auto insurance card – A card from your auto insurance company showing that you have car insurance. This card must be shown on request to any law enforcement officer, so keep it in your car.
Liability auto insurance – Car insurance policy that includes bodily injury, property damage, and uninsured/underinsured motorist coverage. This type of coverage will be cheap and affordable.
Medical payments – Pays medical expenses when you, resident family members, or your passengers are injured and/or die in an auto accident.
Minimum limits – Lowest amount of liability auto insurance required by the state
Motor vehicle record (MVR) – Document confirming an individual’s license status, convictions, and accidents.
Nonstandard insurers – Nonstandard car companies insure motorists with cheap quote rates for less-than-perfect driving records, as well as specialty or high-risk vehicles.
Physical damage coverage – Comprehensive and collision coverage on your vehicle.
Policyholder – The person who owns the auto insurance policy.
Premium – Price of car insurance for specific coverage during a specific period of time.
Proof of loss – Policyholder’s written statement describing the loss and amount of damage.
Property damage coverage – Pays when you’re legally responsible for damages to another person’s vehicle or property.
SR22 filing – The State of Illinois requires you to have SR22 Financial Responsibility Insurance before your driver’s license or vehicle plates can be reinstated following a suspension or revocation due to a violation of the Illinois Motor Vehicle Law. Click here for a cheap free online quote
Subrogation clause – Clause giving the auto insurance company the right to seek damages from a third party who is responsible for the loss the insurer paid the policyholder.
Territory – Location where vehicle is garaged.
Total loss – The cost to fix a vehicle would be more than it’s worth.
Underinsured motorist coverage (UIM) – Pays your injury-related damages when the at-fault driver has lower liability limits than your UIM limits.
Uninsured motorist coverage (UM) – Pays your injury-related damages when the crash is caused by an uninsured or hit-and-run driver.
Uninsured motorist property damage coverage (UMPD) – Pays when an uninsured driver damages your vehicle.
Underwriting – The process of evaluating, selecting, and pricing car insurance for new applicants and existing policyholders.
Voided policy – Auto insurance coverage is cancelled back to the policy inception date because the insured committed a specific act that violated the terms of the policy (misrepresentation, etc.).