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Glossary |
Actual Cash Value
Automobile Insurance
Auto
Loan Coverage
Claim
Deductible
Effective Date
Liability
Coverage
Lien Holder
Medical
Payments Insurance
Personal
Injury Protection - PIP
Physical
Damage Coverage
Policy
Premium
Uninsured
Bodily Injury Coverage - UM/BI
Underinsured
Motorist Bodily Injury Coverage - UIM/BI
Uninsured/Underinsured
Motorist Property Damage Coverage - UM/UIM/PD
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| Actual Cash Value is the difference between
the vehicles cost new minus
the depreciation or reduction
in value due to age. Depreciation
also occurs with vehicle parts.
For example a car tire rated
to go 50,000 miles is worth
less with each passing mile.
In the event of a physical loss
to your vehicle the company
will pay the actual cash value
of the stolen or damaged property
or the amount necessary to repair
or replace the property with
other property of like kind
and quality. The purpose of
insurance is to return you to
the same financial condition
you were in prior to the loss. |
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| A contract between
you and the insurance company
in which you agree to pay a
premium in exchange for a promise
by the insurance company to
reimburse you for auto related
losses. There are four major
areas of coverage: Liability,
Physical Damage, Personal Injury
Protection or Medical Payments,
and Uninsured or Underinsured
Motorist. These coverages are
defined within this glossary. |
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| For an additional
premium you can purchase coverage
to reimburse you for the amount
of outstanding loan balance
under a finance agreement that
exceeds the value of your car.
This coverage is only available
for newly titled vehicles, acquired
by you within the prior 60 days.
The cost is 5% of the Comprehensive/Collision
premiums. Coverage for leased
vehicles is available in Oregon
and Idaho only. |
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| A demand for reimbursement for losses covered
by an insurance policy. |
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| A deductible is the
amount you are responsible for
in the event of a physical damage
loss before the insurance company
begins to pay. For example,
if you have a $500 deductible
on your Collision coverage and
your vehicle sustains $5000
in damage the insurance company
would pay $4500 and you would
pay $500 to complete repairs. |
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| The Effective Date is the date upon which coverage
begins. |
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| Liability coverage
protects you against loss due
to Bodily Injury or Property
Damage to another party for
which any insured is held legally
responsible due to an automobile
accident. This coverage also
includes the cost to settle
or defend any claim or suit
asking for these damages. Liability
coverage does not cover Bodily
Injury or Property Damage loss
that "you" sustain
in an automobile accident. |
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| This is the party that holds a loan or lease
on your vehicle. The Lien Holder has the legal right to take
possession of, or sell your car, to satisfy the debt or loan.
Lien Holders will require that you maintain physical damage
coverage to protect their financial interest in the vehicle.
The insurance company sends a copy of your policy to all parties
legally possessing a financial interest in your vehicle. |
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| Medical Payments
Coverage pays for reasonable
expenses incurred for necessary
medical and funeral services
because of bodily injury to
you or your family members when
occupying a vehicle or when
struck by a vehicle as a pedestrian.
It also covers any other person
while occupying your covered
auto. |
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| PIP provides benefits for medical and hospital
expenses, funeral expenses,
income continuation, and loss
of services. PIP pays out benefits
to covered persons, for expenses
incurred because of bodily injury
caused by an auto accident without
regard to who was at fault in
the accident. |
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| Physical Damage Coverage consists of Collision
coverage and Other than Collision coverage. This coverage
pays for loss to your vehicle regardless of fault. Collision
coverage is the physical loss to your vehicle due to impact
with another vehicle or object. Other than Collision (or Comprehensive)
coverage covers other physical loss. For example, if you hit
a pole in a parking lot the damage would be covered under
Collision. If your car is stolen the loss is covered under
Comprehensive. |
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| A Policy is a contract of insurance between
the insuring company and the policyholder. The policy details
all of the rights and obligations that must be met by both
parties. The policyholder pays a premium and the insurance
company promises to pay for losses covered in the policy.
Both parties must be competent to enter into a contract. |
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| The premium is the fee you pay for the insurance. |
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| UMBI pays for damage
you are legally entitled to
recover from the owner or operator
of an uninsured motor vehicle
because of bodily injury. The
bodily injury must be sustained
by an insured and caused by
an accident. |
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| UIM/BI pays for damage
you are legally entitled to
recover from the owner or operator
of an underinsured motor vehicle
because of bodily injury. The
bodily injury must be sustained
by an insured and caused by
an accident. |
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| UM/UIM/PD pays for
property damage you are legally
entitled to recover from the
owner or operator of an uninsured
or underinsured motor vehicle
due to an accident. |
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