Glossary of Terms (click here for Commercial Glossary of Terms)
Actual Cash Value
Replacement Cost minus depreciation. The cost of a new item of similar make and model, less depreciation. (See Replacement Cost)
Agent
A licensed transactor of insurance who always represents the Insurance Company. Within the title of Agent is the authority to Bind coverage. (see Broker)
Bind
The act of effecting coverage.
Binder
A temporary contract of insurance
Binder Date
The date and time that coverage is bound or put into effect. (See Bind)
Bodily Injury
Physical injury to the person of a Third Party. This includes sickness, disease, pain and suffering, emotional distress, loss of income and even death. (See Third Party)
Broker
A licensed transactor of insurance who represents the client. (See Agent; Bind)
Broker Fee
The fee for services rendered that is charged by a Broker. (Patrion does not charge broker fees)
Cancel
The act, of either party in an insurance contract, of ending the contract prior to its expiration. Both parties are required to give written notice to the other party to effect such cancellation. The insurer is required to give at least ten- (10) days notice prior written warning of such cancellation.
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Collision
This covers your vehicle in an accident that is your fault. You have to pay your deductible to fix your vehicle.
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Collision Deductible Waiver (CDW)
That coverage which, in the event our insured's car is damaged in an accident which is the fault of an identified Uninsured Motorist, waives (or eliminates) the deductible requirement under the collision coverage when repairing the auto. (See Collision; Deductible)
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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. (See Split Limits)
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Comprehensive
That coverage which pays for direct and accidental damage to the insured's automobile, other than that caused by Collision. It covers your vehicle for fire, theft, vandalism or generally anything else that happens to your vehicle while it is standing still.
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Commercial lines coverage
Insurance coverage for businesses which includes Group Health, Property, Worker's Comp, Business Auto.
Conditions
Also referred to as Terms and Conditions. These are typically circumstances that must be present for the coverage to apply.
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Contract
A promise or series of promises that are enforceable under the law.
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Declarations
Also known as the "Dec Page" or merely the "Dec." That section of the insurance policy that distinguishes one policy from all others. It contains the insured's name, address, a description of the property insured, the premium, etc.
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Deductible
An amount of money which, in the event of a covered loss, the insured is required to pay prior to the insurer being liable for any damages. The purpose of a deductible is to eliminate the expense of processing small claims.
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Defense
Coverage provided in most liability policies, which pays for the cost of defending the insured in the event of lawsuit regarding a covered loss. Defense cost, in the auto policy, is said to be "unlimited," in that the policy requires the insurer to pay whatever is necessary, however it is actually limited in that the insurer can pay policy limits in damages and thereby avoid the defense requirement entirely.
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Down Payment
An amount of money (usually a percentage of the premium plus any fees) which the insured must pay in order for the coverage to be bound. (See Bind)
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Effective Date
The date and time (usually at 12:01 a.m.) in which the policy contract begins. Actual coverage may begin earlier than this due to a Binder. (See Binder Date)
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Excess
Coverage that applies only after some other policy has paid its full policy limit. This may result from policy structure, such as in the case of an Excess Liability or Umbrella policy, or as a result of two policies applying to the same loss. (See Primary)
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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.
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Exclusion
Language in a policy (or which may be endorsed onto a policy) which specifies that a given circumstance is not covered. An example would be intentional acts of the insured. If an insured were to damage property or cause bodily injury on purpose, the policy will not provide coverage due to the intentional acts exclusion. Another example would be the Named Driver Exclusion, which states that if a designated person specified by name is driving the automobile at the time of loss, the policy will not provide coverage.
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First Party
The insured. A first party loss is a loss that involves injury and/or damage to the property of our insured. (See Third Party)
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Good Driver
As defined in Prop. 103, a Good Driver is:
- Someone who has been continuously licensed for three or more years;
- Someone who has been continuously licensed in the U.S. or Canada for eighteen months or more; and
- 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.
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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.
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Insurance
The contractual transfer of the financial consequences of loss.
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Impound Account
Your mortgage company/financial institution that you financed your home with will pay for the insurance and taxes on the home in full and you pay them back monthly. Monthly payments get added on to your normal monthly payments of your loan. Even though your mortgage company pays your insurance, you still get to choose the insurance company and the price.
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Insured
Anyone named on the declarations page or driving the insured vehicle with the permission of an insured. (See Permissive User)
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Insured Agreement
Promise made by the insurance company, which outlines its duties. Exclusions, Conditions and definitions that appear later in the policy modify this promise.
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Liability
The legal responsibility for injury done by the insured to a Third Party, or damage done to their property. (See Third Party)
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Limits
Maximum amounts payable under a given coverage. May be per person, per occurrence, per day, or per year. (See Split Limits; Combined Single Limit)
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Losses
Any claim that your insurance company has paid out money to fix.
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Loss Payee
Typically the finance company holding title to the owned auto.
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Medical Payments
An optional auto coverage which pays for the medical expenses of the Named Insured, members of his/her family, and passengers of his/her car if injured in a Collision accident. The Named Insured and Relatives are also covered if struck as a pedestrian. This coverage is Excess to any other medical insurance. (See Excess)
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Named Insured
That person so listed on the Declarations and his/her spouse if a resident of the same household.
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Non-Owned Auto
A borrowed or rented automobile
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Occurrence
An event or series of events which causes Bodily Injury and/or Property Damage. May include repeated or continuous exposure to the same injurious condition.
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Operator
In auto insurance, that person seated immediately behind the steering controls of the automobile and no other person.
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 permission by the insured. (See Exclusions)
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Policy
A legal Contract which contains the agreement between the Insurer and the Named Insured. A Policy is made up of five (5) parts:
- The Declarations
- The Insuring Agreement(s)
- The Exclusions
- The Conditions
- The Definitions
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Policy Jacket
A preprinted brochure which contains all policy language except that contained in the Declarations Page and Endorsements. In the Policy Jacket you will find the Insuring Agreement(s), Exclusions, Conditions and Definitions.
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Premium
Consideration paid by the insured for the policy. The cost of the policy.
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Primary
That policy which must pay first in the event of loss. This would be due to the wording of the policy as in the case of an Excess Liability policy or where two policies apply to the same loss. (See Excess)
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Private Passenger Auto
A self-propelled motor vehicle, with neither more nor less than four wheels, designed for use upon streets and highways and subject to motor vehicle registration under the laws of California.
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Producer
A fire and casualty licensee who, for compensation, acts or aids in any manner of soliciting, negotiating, or procuring the making of any insurance contract on behalf of the insured.
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Producer Fee
The fee charged by the producer for services, which is in addition to the premium.
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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.
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Property Damage
Damage or destruction including loss of use of a Third Party's property. Reduction in value is the measure of Property Damage.
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Punitive and Exemplary Damage
That form of damages, awarded by the court, which is intended to punish the wrong-doer, not to compensate the injured party. This form of damages is generally not covered by a liability policy.
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Quote
An estimate of the cost of insurance given to a prospective client. This estimate does not constitute an offer and therefore is not enforceable. It is literally an invitation to the insured to make an offer. The offer, which may be accepted or rejected, is the policy application.
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Reinstate with Lapse
The act of re-activating a policy which has ceased to be valid due to expiration or cancellation. There is a period between the cessation of coverage and its reinstatement during which the carrier provided no coverage. (See Cancel)
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Rental Reimbursement
That optional coverage which will reimburse the insured for the expense of renting a vehicle while his/her vehicle is in the shop due to a covered loss. Coverage is usually written with a per day Limit and a maximum number of days per Occurrence. (See Limit; Occurrence)
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Replacement Cost
The cost of replacing the damaged property with new property of like kind and quality without deduction for depreciation. (See Actual Cash Value)
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Altura Credit Union
A full-service financial institution. Anyone who lives, works, worships or attends school in Riverside County, San Diego County, and the Orange County cities of Anaheim, Garden Grove, Irvine and Santa Ana; and the San Bernardino County cities of Rancho Cucamonga, Ontario and Fontana is eligible to become a member.
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Split Limits
A limits structure for Bodily Injury and Property Damage Liability or Uninsured Motorist coverage which provides, for Bodily Injury, one limit per person, which is the maximum payable for all damages payable to any one injured person, a separate limit per Occurrence, which is the maximum payable for all Bodily Injury in any one occurrence, and a third limit which is the maximum payable for Property Damage in any one Occurrence. Most personal lines auto insurance is written Split Limits. (See Limit; Occurrence; Combined Single Limit)
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Subrogation
The transfer of the insured's legal right against an injuring Third Party to the insurance carrier. (See Third Party)
Third Party
Someone not protected by the Insurance Policy. Typically the other party in an auto accident. (See First Party)
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Towing
The optional auto insurance coverage which will reimburse the insured for the expense of towing or repairs at the place of disablement in the event the vehicle becomes disabled. Coverage is written with a per Occurrence Limit. (See Occurrence; Limit)
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Trailer Liability
Trailer Liability is always provided by the towing vehicle. (See Liability)
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Umbrella
A broad liability coverage form that provides another layer of liability coverage over all covered personal lines exposures, (i.e., the auto policy, the homeowner liability coverage, the boat owners policy, etc.). The form also provides coverage for some exposures that are not covered by the underlying policies such as coverage for libel and slander (Personal Injury). (See Liability)
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Uninsured Motorist Waiver of Deductible (UMWD)
Only pays if you don't have full coverage and you have uninsured motorist coverage up to $3,500 to fix your vehicle if you get hit by an uninsured motorist and it is their fault.
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Uninsured Motorist Bodily Injury (UMBI)
That coverage which, in the event our insured is injured in an accident which is the fault of an Uninsured Motorist, covers the Bodily Injury expense of the Named Insured, Relatives and passengers in his/her auto. The coverage is generally written with a per person and per Occurrence limit. (See Occurrence, Limit; Named Insured)
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Uninsured Motorist Property Damage (UMPD)
That coverage which, in the event our insured's car is damaged in an accident which is the fault of an Uninsured Motorist, pays the cost of repairing the auto. This coverage is only written when the policy does not cover collision and has a variable maximum Occurrence Limit. (See Collision Deductible Waiver)
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