Insurance Language Translation

Auto Insurance

Bodily Injury or Property Damage Liability Limits – The maximum the insurance company will pay if you hurt someone or damage their property. You could be liable for damages above this amount out of your pocket.

Uninsured and Underinsured Limit – Maximum amounts payable to you if you are hit by someone with no insurance or coverage inadequate to cover your care and/or injuries.

Comprehensive coverage – Covers damage to your car caused by losses other than collision (see policy for complete details) such as hitting animals, hail, theft, vandalism, etc.

Collision coverage – Covers damages to your car due to running into another vehicle or object.

Deductible – Amount you pay before your insurance pays.

Medical Payments – Pays for medical bills for you or passengers, when injured in your car.

Loss of use – Pays for a rental car, if your car cannot be driven due to a covered loss. Also, called Rental Reimbursement, transportation expense or rental car expense coverage.

Primary use – How a particular vehicle is used (example: “work” or “pleasure”).

SR22 – Document required to show proof of coverage for persons convicted of certain traffic violations.

VIN – Vehicle Identification Number – Manufacturers code to identify make, model, year and individual identity.

Home Insurance

Policy Form (HO-3, HO-5, etc.) – This outlines exactly what is and isn’t covered (called perils). See policy for these details.

Coverage A – Generally, the amount of coverage for the dwelling

Coverage B – Amount of coverage for other structures on your property

Coverage C – Amount of coverage for your personal possessions (with some limits as to type)

Coverage E – Maximum amount of coverage payable to others hurt on your property (or by your actions) for which you are liable.

Coverage F – The amount of medical expenses that can be paid to other hurt on your property (or by your actions) without regard to actual liability.

Insurance Score – Selected credit based characteristics report used by insurance companies as one of the risk indicators used to develop your rates. This is not the same as your credit score used by lenders.

Replacement Cost – The amount necessary to purchase brand new items to replace something that is no longer new.

Actual Cash Value – What your property and/or possessions are worth used (after depreciation)

Additional Interest – A person of company listed on your policy who has an “interest” in the policy. A good example is the lender if you borrowed to buy the car.

Loan/Lease (or Gap) Coverage – Pays the difference (if there is any) when your totaled car is worth less than what you owe on it.

Coinsurance Clause – Not like the cost sharing cause in health insurance! This says you must insure your property within a percentage (80-100% generally) of the replacement cost or you will be penalized at claim time.

Replacement Cost vs Market Value – the insurance company does not care how much your house costs to buy (market value) as this takes into consideration factors not relevant to building a new home (Replacement Cost) where the old one was (with factors such as debris removal, higher expenses in a catastrophic area claim situation and not considering values such as location, land, etc.)

Ordinance or Law Coverage – Rebuilt homes must comply to current codes or laws (sometimes leading to higher costs) That did not apply to the original building.

Earthquake & Flood Coverage – These risks are not covered under your policy unless you purchase them separately.

Loss of use – Amounts payable to you to cover expenses when you can’t live in your residence due to a covered claim.

Scheduled Property – A list of items covered for a specific amount (such as expensive jewelry, guns, art, collections, etc.)

Other Insurance Language

Umbrella – Coverage that increases the liability amount (payable to others) that extends over other coverage(s).

Declarations (or Dec) page – A summary page (included in your policy) that outlines who is covered, what is covered, limits of coverage, and other information (like premium amounts)

Exclusion – Things that are not covered (or limited in coverage) within a policy. Sometimes this is more important to know than what is covered!!

Named Insured – Exactly who is covered under a policy. You should read this! It is not always just whose name is on the policy. Good to know who is and isn’t covered!

Endorsements – Attachments to your policy that gives you additional coverage (or takes some away!). Again – very important to review!

Language translation provided as a way to help you understand what we (and/or the insurance companies) are saying. This is not legal language or a substitute for the real thing! Please see your policy for actual language.