Auto Insurance Terms R-T

Glossary of defined terms

Extending the policy by replacement with another policy that takes effect when the previous policy expires. Renewal may be activated automatically as a contract provision.

Rental Reimbursement
If your auto is inoperable as a result of a covered loss, this optional coverage will reimburse you for a rental vehicle.

Safe Driver Plan
Merit system for drivers. In many states, when drivers are cited for a moving violation or have an accident, they accrue points. A surcharge may be assessed and added to the premium cost if points exceed a specified level.

Short Rate Cancellation
If a policy is cancelled at your request before the expiration date, then the premium to be returned is not prorated to the remainder of the term because of fixed corporate expenses.

Split Limit
Separate maximum amounts for different types of coverage. The splits are typically described as 100/300/50 which allows a maximum benefit for bodily injury coverage per person, $300,000 bodily injury coverage per accident, and a property damage limit of $50,000 per accident.

Stacking of Limits
More than one policy may be applied to the same claim.

The duration a policy is in effect.

Threshold Level
The level a claimant must reach before a suit may be entered. The threshold level may be a dollar amount where medical expenses exceed a specified amount, or a level of injury such as disfigurement or death. This is typically a condition that occurs under "no fault" insurance policies.

A wrong for which a civil suit may be initiated. A private wrong or harm (other than a breach of contract) committed against another, resulting in legal liability. A tort is either intentional or accidental (negligent). Automobile liability insurance is purchased to protect one from suits arising from unintentional torts.

Towing and Labor Costs
Added to the physical damage coverage, this endorsement provides reimbursement for vehicle towing and on-site labor costs up to a specified limit.

Transportation Expenses
If a covered vehicle is stolen, a provision under the physical damage portion of an automobile policy allows the named insured transportation expenses subject to a daily and maximum dollar limit.

Information from Coverage For My Car

 Web Demesne
Support Demesne through our Bookstore