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AUTO
INSURANCE TERMS AND DEFINITIONS
(ACTUAL
CASH VALUE)
Based
on cost new less depreciation for age and condition.
More commonly known as market value.
(AGREED
VALUE)
In
the event of a total loss on your vehicle, the
insurance company will pay the full value as listed
on your insurance policy. They can not depreciate
off this value. Most companies that specialize
in collector vehicles insure them on this basis.
(COLLECTOR
VEHICLE)
Any
vehicle (regardless of age) that is appreciating
in value.
(CUSTOM)
Any
vehicle newer than 1949 that has been modified.
We consider a car modified if you have altered
the performance of the car or drastically changed
the appearance.
(EXOTIC)
A
car of less than 15 years of age that is a collectible.
Must be limited editions or sports types nature.
(METHODS
OF INSURANCE SETTLEMENTS)
1) Actual Cash value
2) Stated Amount
3) Agreed Value
(MODIFIED
VEHICLE)
If
the vehicle's body or engine has been altered
from original factory condition. The change in
the engine would increase the performance of the
vehicle. The body alterations do not need to be
related to increase performance to be considered
modified. If the modifications was a factory option,
we do not usually define it as modified (Saleen
or Calloway are examples of this).
(SPARE
PARTS)
Extra
parts that are for a motor vehicle that are not
attached to the vehicle. This would include items
picked up at a swap meet.
(STATED
AMOUNT)
In
the event of a total loss, the insurance company
will pay the LESSER OF: Actual Cash Value or Stated
Amount. Most insurance companies that do not specialize
in collector vehicles insure them on this basis.
(STOCK
VEHICLE)
A
vehicle that has the original size and horse power
engine and the body of the car has not been altered.
Are built engine can still qualify as long as
it has not been altered to increase performance.
(STREET
ROD)
1949
or older vehicle that has been modified. Modifications
can be modernization (drive train, steering, power
brakes) or radical (chopped, tubbed or shaved)
COVERAGE
TYPES
Coverage's
are broken down, according to purpose, but are
generally combined into one policy. Coverage descriptions
are general information and not statements of
contract because policy provisions, endorsements,
limits and requirements vary by state.
The
most common coverage's are:
Losses from property damage, medical and legal
costs, and lost income add up to billions of dollars
annually for automobile mishaps. Automobile insurance
plays an important role in protecting consumers
from serious financial losses that can result
from accidents. Not all states require you to
have automobile insurance, but all states do require
you to prove that you can pay specified amounts
if you cause bodily injury or property damage
while driving. Your proof would be insurance or
large amounts of cash or some other security.
Without one of these, you may lose your driver's
license and registration. Visit the Insurance
Information Institute's web site at www.iii.org
to find the specific auto insurance coverage's
required by each state.
Uninsured or Underinsured Motorist: pays
for costs related to injuries or property damage
to you or your family members and guests in your
car caused by an uninsured, underinsured, or hit-and-run
driver.
Bodily Injury Liability: Pays your legal
defense costs and claims against you if your car
injures or kills someone. Covers family members
living with you and others driving with your permission.
Property Damage Liability: Pays your legal
defense costs and claims against you if your car
damages another's property. Does not cover your
property, including your auto.
Medical Payments or Personal Injury Protection:
Pays medical expenses resulting from an accident
for you and others riding in your car. Also pays
for you or your family members injured while riding
in another's car or while walking.
Collision: Pays for repairs of damage to
your car caused by a collision with another vehicle
or any other object, regardless of who was responsible.
Comprehensive Physical Damage: Pays for
damages to your car resulting from theft, fire,
hail, vandalism, or a variety of other causes.
Premiums: The cost of the insurance policy
(usually paid out in periodic payments).
Emergency Road Service: Pays expenses incurred
for having your auto towed as a result of a breakdown.
Towing limits vary by state or policy provisions.
Deductibles: Although deductibles vary
by state, they are typically available in amounts
such as $100, $250, $500, or $1000. For example,
if you had a $500 deductible, you would need to
pay $500 of the covered loss. Generally speaking,
higher deductibles lower your premium, but increase
the amount you must pay out of your own pocket
if a loss occurs. Ask yourself how much you are
willing to pay in order to save on premium.
Auto Insurance also offers "special discounts"
for automobiles that have: Anti-Lock Brakes, automatic
seat belts and/or airbags. Anti-lock brakes improve
steering control and stability when a car is brought
to a stop, thus reducing accidents. Some states,
including Florida, New Jersey and New York, require
insurers to give discounts for cars equipped with
anti-lock brakes while some insurers have a nationwide
discount in place.
Other discounts that Auto insurance companies
provide their customer's with are; no accidents
in three years, drivers over 50 years of age,
driver training courses, antitheft devices, good
grades for students and and having more than one
car insured with that company.
Another type of Coverage is called "Specialty
Coverage". This insurance is a supplemental
insurance that covers towing, labor and car rental
reimbursement to your basic auto insurance policy.
For every dollar or two added to your basic insurance
you can purchase coverage that will pay for your
rental car while your car is being repaired from
an accident. Be sure to remind your insurance
company or agent when you file a claim that you
have this "Specialty Coverage".
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