Car Insurance Terms - Part 4
Lapse in Coverage
Also known as policy lapse. The point in time when a policy is canceled for any
reason, including failure to pay, change of provider, etc.
Lender
The lender is the entity (usually a bank) which lends you the money to purchase
a car. They are usually the loss payees, until you pay off the balance of the
loan.
Lessor
Similar to the lender, the lessor is the entity which leases your vehicle to
you. This is quite often the financial arm of the car company itself.
Note: both lenders and lessors may require that you purchase gap auto insurance
to fully protect the value of your car.
Liability Insurance
Insurance coverage to protect against claims alleging that one's negligence or
inappropriate action resulted in bodily injury or property damage.
Loss Payee/Lien holder
Usually your lender or lessor, this is the person or entity to whom loss
payments are made, in addition to you. Liability Coverage
Insurance that provides compensation for a harm or wrong to a third party for
which an insured is legally obligated to pay.
Longevity
Insurance companies often reward their long-time customers with premium
discounts. An insurer may provide a discount after an insured has been with the
company for a specified amount of time.
Medical Payments Coverage
Medical payments coverage, also called personal injury protection, or PIP,
covers the cost of injuries to you, your family, and your passengers.
Minimum Liability Limits
These vary locally, they are the lowest amounts of liability coverage that you
can legally buy in your state.
Multi-car discount
Discount often given when insuring multiple vehicles under the same policy. By
choosing this option, you will almost always save over having separate policies
for each car.
Named Driver Exclusion
An individual specifically identified on the policy as an excluded driver. This
often applies to teen-aged family members, whose inclusion in a policy would
raise the premium considerably.
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Car Insurance Terms - Part 5