Glossary Of Terms |Auto Insurance | SOS Insurance Services

Auto Insurance

A

Antitheft Recovery System
These systems consist of an electronic device that's installed in a concealed area of your car. If your car gets stolen, you can activate the device and it will emit a signal that can be used to locate your car. Such systems can be effective over a radius of several miles, depending on local geography. Ask your car dealer or nearby police department which brand of recovery systems are supported in your area. By installing an antitheft recovery system, you may be eligible for an auto insurance discount.

B

Bodily Injury / Property Damage Liability Coverage (BI/PD)
For example, 25/50/10 means $25,000 per person per accident for bodily injury/$50,000 total per accident for bodily injury/$10,000 property damage per accident.

Bodily Injury Liability
Pays when an insured person is legally liable for bodily injury or death caused by your vehicle or your operation of most nonowned vehicles. This coverage also pays for your legal defense if you are sued.

Common Exclusions: No coverage for (1) bodily injury/death when you are using your vehicle to carry persons or property for compensation or a fee; (2) liability assumed under a contract; (3) bodily injury/death to an employee; (4) bodily injury/death caused by an intentional act; (5) property owned by, rented to, or in the charge of an insured person; (6) bodily injury/death to you or relative; (7) bodily injury/death or property damage resulting from a relative's use of a vehicle, other than a covered vehicle, owned by a person who resides with you; or (8) bodily injury or property damage resulting from your operation or use of a vehicle owned by you, other than a covered vehicle.

C

Collision
Pays for loss to your covered vehicle when it collides with another object or overturns. Most auto insurers will also pay for a collision loss to any nonowned vehicle, or to a vehicle you have rented other than a vehicle rented for use in connection with your business or employment, while that vehicle is in your custody, or while you are operating it.

Common Exclusions: No coverage for damages or loss (1) to a vehicle while being used to carry persons or property for compensation or a fee; (2) resulting from intention acts, racing, or preparing for a race or stunting activity; (3) customs parts or equipment, including electronic equipment, in excess of the value declared in the application; or (4) to tapes, compact discs, other media or their carrying cases.

Combined Single Limit (CSL)
A limits structure for Bodily Injury and Property Damage Liability or Uninsured Motorist Bodily Injury coverage which provides one single limit, which is the maximum payable for all damages in any one occurrence. Most commercial auto insurance is written CSL.

Comprehensive
Pays for loss or damage to your covered vehicle caused by any event other than collision. This includes damages due to events such as fire, theft, windstorm, flood, and vandalism. Most auto insurers will also pay transportation and loss of use expenses under this coverage if your motor vehicle is stolen.

Common Exclusions: No coverage for damages or loss (1) to a vehicle while being used to carry persons or property for compensation or a fee; (2) resulting from intention acts, racing, or preparing for a race or stunting activity; (3) customs parts or equipment, including electronic equipment, in excess of the value declared in the application; or (4) to tapes, compact discs, other media or their carrying cases.

Customized Equipment/Special Equipment
Items not included in standard insurance options available for cars. These may include extra electronic equipment, special paint or exterior items, or amenities added to the inside of a van or truck.

D

Defensive Driver and Driver Improvement Courses
These courses consist of defensive driving training for drivers of all ages as well as "mature driver safety courses" intended for drivers age 55 and over. In certain states, you may qualify for an auto insurance discount if you're in the eligible age range and if you've taken one of these safety courses.

Drive-Other-Car Endorsement
Optional coverage that broadens the definition of a covered auto to include nonowned vehicles the insured person operates.

Driver Education
State accredited educational course that consist of at least 30 hours of professional classroom instruction. Driver Training State accredited training course that consists of at least six hours of behind-the-wheel professional instruction.

Driver Status
Provides information concerning whether the driver has been rated or listed on the policy.

E

Endorsements
Also known as riders, endorsements are changes to the original insurance contract. In auto insurance coverage, endorsements may include changing your deductibles or adding a new car to your auto insurance policy.

Extended Nonowner Liability
An endorsement that provides broader liability coverage for specifically named people operating any nonowned automobile or trailer. It covers nonowned autos, use of autos to carry people or property for a fee, and individuals driving employer-furnished cars who do not own vehicles themselves.

Excess Liability
Coverage Liability coverage that is written to provide higher Limits than those available in the Primary policy. This policy is only liable after the Primary policy has paid its full Limits for a covered loss. It is used where higher Limits of liability are needed, but the primary carrier is unwilling or unable to provide such Limits. The Primary policy may provide Limits of 15/30/5 and the Excess policy 85/270/45 to provide total Limits of 100/300/50.

Exclusions
Exclusions are situations that are not covered by a given auto insurance policy. Specific exclusions are listed in your auto insurance policy.

F

Financial Responsibility Laws
Financial responsibility laws require owners and operators of autos to maintain enough money to compensate those they injure. Liability insurance is the most common way to satisfy these requirements.

G

Gap Insurance
If you are making lease or loan payments and you experience a total loss, there may be a difference (gap) between the market value of your vehicle and what you still owe on it. This optional coverage pays the difference.

Good Driver
As defined in Prop. 103, a Good Driver is:
Someone who has been continuously licensed for three or more years; has been continuously licensed in the U.S. or Canada for eighteen months or more; has less that two traffic violations or only one at-fault accident not involving bodily injuries in the last 36 months; has not been convicted of a DUI or manslaughter on or after January 1, 1996.

California law states that any driver convicted of a DUI or manslaughter on or after 1/1/1996 will not be eligible for consideration as a good driver for seven years from the conviction date.
Good drivers may not be refused insurance by any auto carrier in the State of California and must be given a twenty percent (20%) discount over the carrier's best rates.

Good Student Discount
A premium discount for students with high scholastic grades. Some statistical research has shown a relationship between good grades and safe driving.

Garaging Location
The ZIP code where your vehicle is parked or garaged when not in use. This is usually your primary residence.

Gray Market
A vehicle which was built for sale outside the U.S. These vehicles (usually built by Porsche, Mercedes, or BMW) do not meet U.S. standards regarding emission control, safety glass, lighting, etc.

H

Hit and Run
An accident caused by someone who does not stop to assist or provide information.

I

ID Card
An identification card issued by your insurance company that provides evidence of liability insurance. Such evidence is required in most states.

M

Medical Payments Coverage
Pays certain medical and funeral expenses resulting from a motor vehicle accident. This coverage protects anyone occupying your vehicle. It also covers you and relatives who reside in your household while in other vehicles or if struck as a pedestrian. These benefits are payable without regard to fault. This coverage may not be available in states that require Personal Injury Protection Benefits. Common Exclusions are similar to those for Bodily Injury Liability Coverage (see above).

Multi-car Discount
A discount offered by some insurance companies for those with more than one vehicle insured on the same policy. In some cases, if you drive a company car insured by your company, your own insurance company may give you the multi-car discount.

MVR - Motor Vehicle Record
A Motor Vehicle Report (MVR) provides information on your driving record. This report includes accidents and moving violations. Auto insurance companies obtain MVRs from states where you or other insured drivers have been licensed to drive.

N

Non-owned Auto
A borrowed or rented automobile

Non-Passive Alarm A non-passive alarm has to be manually activated every time you leave the car. If someone attempts to open your car, the alarm sounds, and the system disables the automobile's starter, ignition system, and/or fuel circuit. You may qualify for an auto insurance discount if your car is equipped with such an alarm.

O

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

P

Passive Alarm
Passive alarms are automatically activated and emit warning sounds when someone tries to get into your car. Once the passive alarm has been triggered, the system disables the automobile's starter, ignition system, and/or fuel circuit. You may receive an auto insurance discount if your car is fitted with such an alarm.

Permissive User
An entity not listed on the policy, using the insured's vehicle with permission. Depending on the particular policy, certain individuals may not be covered, even if given is permission by the insured.

Private Passenger Automobile
A four-wheeled motor vehicle that is subject to motor vehicle registration and used for private personal use.

Primary Use
What your vehicle is mainly used for:

TO/FROM WORK:
If you use your vehicle to commute 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
not used to transport explosives or flammable materials
not carrying equipment weighing more than 500 lb.

Artisan occupations may include but are not limited to: appliance repair, landscapers, blacksmith, painters, cabinet makers, photographers, carpenters, plasterers, carpet installers, pool cleaners, construction workers, pool maintenance, drapery installers, radio/TV repairman, electrician, repairmen, exterminators, roofers, fence installers, tree trimmers, furniture repair, upholsterers, heating/ac repairmen, surveyors, interior decorator, welders, janitorial services.

PLEASURE: No others apply.

Principal Driver
The person who drives the car most often.

Proof of Non-Fault/No B/I
Documentation required by the insurer to support not charging for an accident or not assigning points for bodily injury in an accident. Acceptable forms are limited to a police report, a letter from the previous insurer or a letter from the carrier of the other party in the accident. The insurer may accept a copy of the claims check stub if it contains sufficient information. Property Damage Liability
Pays when an insured person is legally liable for damage to the property of others caused by your vehicle your operation of most nonowned vehicles. This coverage also pays for your legal defense costs if you are sued.

Common Exclusions: Same as Bodily Injury Liability Coverage exclusions above), but the exclusions apply to damage to property.

Rental Reimbursement
Pays expenses to rent a car if you have a loss covered under Comprehensive Coverage or Collision Coverage. Pays up to the limit selected per day to the maximum indicated.

S

SR1P
A form filed by the insurance company with the California Department of Motor Vehicles (DMV) which states that the insured has an auto insurance policy that meets California financial responsibility requirements and requires that the DMV be notified if such policy is canceled. The requirement to file such form is usually due to an uninsured accident or due a negligent operator suspension.

SR-22
A document required as proof of financial responsibility by the court or under state law for persons convicted of certain traffic violations. 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.

T

Towing and Labor
Reimburses you up to the limit selected for emergency towing of your car.

U

Underinsured Motorist Bodily Injury Coverage
Protects you, your resident relatives, and occupants of a covered vehicle if any of these insured sustain bodily injury, including any resulting death, in an accident in which the owner or operator of a motor vehicle who is legally liable does not have enough insurance.

Common Exclusions: No coverage for bodily injury/death sustained by any person while using or occupying a (1) covered vehicle while being used to carry persons or property for compensation or a fee; (2) a covered vehicle without the permission of you or a relative; or (3) a nonowned vehicle without the permission of the owner.

Underinsured Motorist Property Damage Coverage
This coverage pays you for damage to the covered vehicle that has been sustained in an accident in which the owner or operator of a motor vehicle who is legally liable is an underinsured motorist. This coverage is available in only a limited number of states.

Common Exclusions: No coverage for property damage sustained by a covered vehicle while (1) being used to carry persons or property for compensation or a fee; or (2) a covered vehicle without the permission of you or a relative.

Uninsured Motorist Property Damage Coverage
Available in some states, usually as an alternative to Collision Coverage. This coverage pays you for damage to the covered vehicle that has been sustained in an accident in which the owner or operator of a motor vehicle who is legally liable does not have insurance. In some states, it may also pay you for damage to personal property in the covered vehicle at the time of an accident. This coverage is not available in all states.
Common Exclusions: No coverage for property damage sustained by a covered vehicle while (1) being used to carry persons or property for compensation or a fee; or (2) a covered vehicle without the permission of you or a relative.

Glossary of Terms

Auto Insurance