Car Insurance Terms - Part 6
Personal Injury Protection
Also known as "PIP", this is the name given to no fault benefits in those states
that have some sort of no fault auto insurance laws. This type of coverage
usually includes benefits for medical expenses, loss of income, essential
services, accidental death, funeral expenses, and survivor benefits.
Physical Damage
The physical damage to the covered vehicle caused by (though often not limited
to) collision with another vehicle, vandalism, theft, etc.
Policy
The actual contract between you and the insurance company which spells out your
coverage levels, rights, and obligations. Learn more about the contents of
insurance policy documents.
Policy Period
The period of time during which you are covered by your policy.
Premium
The cost of your insurance policy and all the included coverage.
Pro Rata Cancellation
What happens when you cancel your policy before it expires. Pro Rata refers to
the amount of money that may be refunded to you based on the amount of time left
on your policy that you have already paid for.
Property Damage Liability
Coverage for physical damage caused to property when the insured person is
liable.
Rated Annual Mileage
This is the annual mileage that is used to determine the mileage rating
classification that is applied to a vehicle.
Rental Reimbursement
This optional coverage will pay for the use of a rental car while damage to your
car is being fixed or while the claim for a totaled vehicle is processed.
Safety Equipment
Enhancements in your car, such as automatic seat belts and driver-side and
passenger-side airbags, which reduce your risk of being injured in a collision.
Vehicles with safety equipment often qualify for discount car insurance.
Split Limit
Limits set on the types of coverages that are part of one group of benefits.
Most often applied to liability insurance.
SR-22 (Financial Responsibility Filing)
A requirement by a state regulatory entity (usually the state Motor Vehicle
Department) for an insurance company to certify on a driver's behalf that the
driver has the ability to pay future claims up to the state required limit. The
certification is done by means of a form called an SR-22.
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