Insurance Terms

Auto Insurance – Terms to Know

• Automobile Liability Insurance
  Coverage if an insured is legally liable for bodily injury or property damage caused by an automobile.

• Collision Insurance
  Covers physical damage to the insured’s automobile (other than that covered under comprehensive insurance) resulting from contact with another inanimate object.

• Comprehensive Insurance
  Auto insurance coverage providing protection in the event of physical damage (other than collision) or theft of the insured car. For example, fire damage or a cracked windshield would be covered under the comprehensive section.

• Personal Injury Protection
  Pays basic expenses for an insured and his or her family in states with no-fault auto insurance. No-fault laws generally require drivers to carry both liability insurance and personal injury protection coverage to pay for basic needs of the insured, such as medical expenses, in the event of an accident.

• Umbrella Policy
  Coverage for losses above the limit of an underlying policy or policies, such as homeowners and auto insurance. While it applies to losses over the dollar amount in the underlying policies, terms of coverage are sometimes broader than those of underlying policies.

• Uninsured Motorist Coverage
  Endorsement to a personal automobile policy that covers an insured involved in a collision with a driver who does not have liability insurance.

Homeowners Insurance – Terms to Know

• Extended Replacement Cost
  This option extends replacement cost loss settlement to personal property and to outdoor antennas, carpeting, domestic appliances, cloth awnings, and outdoor equipment, subject to limitations on certain kinds of personal property; includes inflation protection coverage.

• Floater
  A separate policy available to cover the value of goods beyond the coverage of a standard renters insurance policy including movable property such as jewelry or sports equipment.

• Hurricane Deductible
  Amount you must pay out-of-pocket before hurricane insurance will kick in. Many insurers in hurricane-prone states are selling homeowners insurance policies with percentage deductibles for storm damage, instead of the traditional dollar deductibles used for claims such as fire and theft. Percentage deductibles vary from one percent of a home’s insured value to 15%, depending on many factors that differ by state and insurer.

• Umbrella Policy
  Coverage for losses above the limit of an underlying policy or policies, such as homeowners and auto insurance. While it applies to losses over the dollar amount in the underlying policies, terms of coverage are sometimes broader than those of underlying policies.