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insurance terminology

The "Insurance Terminology" descriptions documented refer primarily to automobile insurance. The descriptions are general and do not create any contract or any binding of coverage.

Bodily Injury Liability (BI):
Coverage designed to pay claims against the insured if found at fault in an accident causing injury or death. Minimum California state Bodily Injury Liability requirement is currently $15,000/$30,000.


Cancellation:
The termination of an insurance policy requested by either the insured or the insurance company.


Claim:
A request for payment or compensation submitted by the insured or against the insured.


Collision Coverage:
Coverage designed to pay for damages to the insured's automobile (subject to a deductible) resulting from a collision. This coverage is not required by law in California, however may be required by a finance company in order to finance or lease a vehicle.


Comprehensive Coverage:
Coverage designed to pay for damages (subject to a deductible) to the insured's automobile other than those caused by collision. Some examples are; damages resulting from fire, theft, and vandalism. This coverage is not required by law in California, however may be required by a finance company in order to finance or lease a vehicle.


Deductible:
The portion of the loss (usually $250., $500., or $1,000.) that the insured must pay in the event of a claim.


Full Coverage:
The combination of liability, comprehensive and collision coverage is commonly referred to as FULL COVERAGE.


Liability:
Coverage that is either the combination of Bodily Injury Liability and Property Damage Liability, or just Bodily Injury Liability.


Medical Payments:
Coverage designed to protect the insured, occupants of the insured's automobile, and persons not occupying the insured's automobile injured in someway involving the insured's automobile. This coverage is not required by law in California.

Named Insured:
The insured/s whose name/s appears on the policy Declarations Page. This is the person who originally signed the insurance application and in whose name the policy is issued. This can be a married couple if the application was written that way.

Premium:
The money paid to the insurance company by the insured for insurance coverage.


Property Damage Liability (PD):
Coverage designed to pay claims made against the insured if they are found at fault for damage to the property of others. Minimum California state Property Damage Liability requirement is currently $5,000.


SR-22:
To remove a suspension of a person's Driver License an SR-22 Filing may be required. An SR-22 is a document issued by an insurance company and kept on file at the California Department of Motor Vehicles (DMV). This document is a guarantee that at least the California required minimum liability coverage has been obtained by the respective person. The insurance company will then notify the DMV if the insurance coverage should lapse or be canceled for any reasons. The respective person's license status will immediately be suspended until a valid SR-22 is on file.


Uninsured Motorist Coverage Bodily Injury (UM BI):
Coverage that provides protection for the insured and others in the insured's automobile for injuries caused by the responsible party who does not have insurance at the time of an accident. This coverage is not required by law in California.


Uninsured Motorist Coverage Property Damage (UM PD):
Coverage designed to pay for damages to your auto caused by the responsible party who does not have insurance at the time of an accident. This coverage is not required by law in California.


Vehicle Identification Number (VIN #):
Usually a seventeen (17) character alpha-numeric identifier. It is a unique number to each vehicle. The VIN# is usually located on the driver's side of the dashboard or inside the driver's side door.