Glossary

ADJUSTER

An individual employed by an insurer to evaluate losses and settle policyholder claims. Also see "public insurance adjuster."

AGENT

A person who sells insurance policies.

APPLICATION

A form you fill out with information about you that an insurance company will use to decide whether to issue you a policy and determine how to rate.

CANCELLATION

Termination of an insurance policy by the company or insured before the renewal date.

CLAIMANT

A person who makes an insurance claim.

COLLISION COVERAGE

Pays for damage to your car without regard to who caused an accident. The company must pay for the repair or up to the actual cash value of your vehicle, minus your deductible.

COMPREHENSIVE COVERAGE

(physical damage other than collision)
Pays for damage to or loss of your automobile from causes other than accidents. These include hail, vandalism, flood, fire and theft.

CONTRACT

In most cases, the term "contract" refers to an insurance policy. A policy is considered to be a contract between the insurance company and the policyholder.

DECLARATIONS PAGE

The page in your policy that shows the name and address of the insurer, the period of time a policy is in force, the amount of the premium, and the amount of coverage.

DEDUCTIBLE

The amount the insured must pay in a loss before any payment is due from the company.

DEPRECIATION

Decrease in the value of property over time due to use or wear and tear.

DIVIDEND
A dividend is a payment made by a company to its shareholders, usually as a distribution of profits.

LAPSE

The termination of an insurance policy because a renewal premium is not paid by the end of the grace period.

LIABILITY INSURANCE
An auto insurance coverage that pays for injuries to the other party and damages to the other vehicle resulting from an accident the policyholder caused. It also pays if the accident was caused by someone covered by the policyholder's policy.

 

LIABILITY LIMITS

The maximum amount your liability policy will pay. Your policy must pay at least $30,000 for each injured person, up to a total of $60,000 per accident, and $25,000 for property damage per accident. This basic coverage is called "30/60/25" coverage.

LOSS

The amount an insurance company pays on a claim.

POLICY PERIOD

The period a policy is in force, from the beginning or effective date to the expiration date.

PREMIUM

The amount paid by an insured to an insurance company to obtain or maintain an insurance policy.

RENTAL REIMBURSEMENT COVERAGE

Auto insurance coverage that pays a set daily amount for a rental car if the policyholder's car is being repaired because of damage covered by the auto policy.

RIDER

A written agreement attached to the policy expanding or limiting the benefits otherwise payable under the policy. Also called an "endorsement."

SURCHARGE

An extra charge added to your premium by an insurance company. For automobile insurance, a surcharge is usually added if you have at-fault accidents.

TOWING AND LABOR COVERAGE

Pays for towing charges when your car can´t be driven. Also pays labor charges, at the place where your car broke down.

UNDERWRITER

The person who reviews an application for insurance and decides if the applicant is acceptable and at what premium rate.

UNDERWRITING

The process an insurance company uses to decide whether to accept or reject an application for a policy.

UNINSURED/UNDERINSURED MOTORIST (UM/UIM) COVERAGE

 Auto insurance coverage that pays for the policyholder's injuries and property damage caused by a hit-and-run driver or a motorist without liability insurance. It will also pay when medical and car repair bills are higher than the other driver´s liability coverage.

 

Source: Texas Department of Insurance