Car Insurance Terms - Part 5
Named Insured
Entities or individuals named on the policy as insured by that policy. Most
commonly this refers to spouses and other relatives living in the household.
No Fault Insurance
An auto insurance policy that insures the holder for injury-related benefits
caused by an auto accident, regardless of fault in the accident. Covered
benefits may include medical costs, loss of wages, loss of services, and funeral
expenses. In return for these guaranteed benefits, the right to sue for damages
caused by an auto accident is limited. Thirteen states currently use some form
of no fault insurance.
Number of Drivers
Somewhat self-explanatory: the number of drivers who covered under your policy.
This usually includes you, your spouse, and any relatives living in your
household (unless otherwise excluded.)
Number of Vehicles
The number of cars covered under your policy. If you want to insure more than
four vehicles, you may have to purchase an additional policy.
Occupation
Insurance companies often use your occupation, and the distance that you drive
to work every day, to calculate risk. Certain professions incur higher premiums,
though this is not common.
Odometer Reading
The total number of miles that a car has been driven in its "lifetime". Certain
insurers will not even offer a quote for vehicles with more than a set amount of
miles on its odometer.
Per Occurrence Limit
This refers to the cap amount an insurance company will pay for all claims
arising from a single incident. In an automobile accident, it comprises bodily
injuries sustained by all parties. When Bodily Injury coverage is purchased in
split limits, the second limit is the "per occurrence" limit: e.g. $100,000(per
person)/$300,000(per occurrence.)
Per Person Limit
This refers to the cap amount an insurance company will pay for any one person's
injuries arising from a single incident. In an automobile accident, it comprises
bodily injuries sustained by each person. When Bodily Injury is purchased in
split limits, the first limit is the "per person" limit: e.g. $100,000(per
person)/$300,000(per occurrence.)
Personal Auto Policy
Also known as "PAP", personal auto policies are the most common type of auto
insurance policies sold. They include coverage for liability, medical payments,
uninsured/underinsured motorist coverage, and physical damage protection.
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Car Insurance Terms - Part 6