Auto Dealer Exit Strategies

Car insurance terms and definitions: A-Z

Accident: An unforeseen occurrence that is out of the control of the driver and results in damages or loss.

Accident Frequency: Insurance companies will take the number of accidents in which a driver has been involved in to consideration when determining insurance premiums.

Actual Cash Value: Actual Cash Value refers to the cash value that is set by the insurance company, the replacement value of the insured automobile and the total used to determine compensation in the event of total loss of the vehicle. (less depreciation)

Anti-Theft Device: An anti-theft device is meant to reduce the risk of theft as well as assist in quick recovery of the vehicle in the event of theft. Many insurance companies over reduced rates for having an ATD in stalled.

Blue Book: Standard publication used industry why to determine market value of vehicles.

Contributory Negligence: Affective in some states this law prevents any compensatory recovery from at fault party.

Declaration Page: Document in policy which list all details of the policy, insurance company, vehicle and the insured.

Deductible: The deductible is the set cost the insured must pay in the event of a loss. The rate of the deductible will affect the premium rate, the higher the deductible the lower the premium.

Endorsement: An attachment which changes the original policy.

First Party: First party refers to the person that is insured under the policy.

Fraud: A falsification in any part of your policy or the attempt to file a fraudulent statement or claim is illegal and will result in a void policy.

Garage Location: This refers to the location where the vehicle is garaged the largest percentage of the time and correspond with your mailing zip code and will premium rate.

Good Student Discount: Some insurance companies offer discounts of students that maintain a B or better average throughout the academic year.

Lapse in Coverage: A lapse in coverage can occur for failure to make premium payments on time.

Liability Insurance: Option in an insurance policy which provides payment for damages that result for an accident.

Liability Investigation: Process that takes places after an accident.

Medical Payments Coverage: This portion of a policy cover medical costs that may arise as a result of a car accident. There are state minimum coverage that must be held in most states.

Motor Vehicle Record (MVR): A documented history of driving record compiled by the state issuing the drivers license. This driving record is used by insurance companies to determine premium rates.

Multi-car discount: Some companies offer discounts if you insure multiple vehicles with their company.

Per Occurrence Limit: This is the most an insurance company will pay for any one accident.

Per Person Limit: This is the limit set for any injuries resulting from a vehicle accident.

Rating Plan: The formula used to set premium cost.

Red Book: The Red Book is used to set market value of used trucks and automobiles.

By: Roberts Henrys

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