Commonly Used Insurance Terms
Assigned Risk-A system used in some states to help secure coverage for people who cannot get insurance in the voluntary market.
Claim-A request for an insurance company to pay for a loss.
Collision Coverage-A type of coverage which pays for repairs to a covered car if the damages are the result of a collision with another vehicle or object, or single-car crash.
Comprehensive Coverage-A type of coverage which pays for repairs to a covered car is the damages are the result of fire, theft, or other non-collision related causes.
Coverage-A description or set of terms and conditions, under a policy, for which the company will provide insurance protection.
Coverage Period-Also called policy period. The amount of time during which an insured has requested and paid for insurance protection. An auto insurance coverage period is usually six months long.
Deductible-In a claim situation, the deductible is the amount of a covered loss which the insured person is obligated to pay.
Endorsement-An addition to the policy which modifies the original coverage provided.
Hazard-An element or situation which my increase the chances of an accident or loss.
Insured-The customer who secures insurance protection, and those who are covered by the policy.
Liability-The legal responsibility of one person to another for damages, personal or property, caused in an accident, or loss situation.
Limits-On a policy, the limits indicate the maximum amounts the insurance company will pay under certain coverages.
Line-A type of insurance such as property, auto, or life insurance.
Loss-A harm which is suffered by persons or brought upon property, Losses can be covered, limited, or excluded depending on the terms of the policy.
Medical Payments/Personal Injury Protection Coverage-A type of insurance coverage which pays for doctor, hospital, and surgery costs which are incurred by certain covered insureds, such as the driver, passengers or family members.
Premium-The amount the customer must pay the insurance company in exchange for coverage. Sometimes this payment is made in a lump sum; sometimes it is made in a series of predetermined installments.
Policy-The actual contract of insurance provided to a customer by an insurance company.
Rating Factors-Facts or circumstances, pertaining to the applicant or customer, which are used to help determine the cost of insurance.
Rider-A separate contract which is added onto a policy to expand coverage.
Risk-The potential for loss.
Underwriting-The process of examining, accepting, or rejecting customers, and classifying the ones that are accepted in order to charge the appropriate premiums for them.
These brief descriptions are for educational purposes and are not actual insurance policy Language. Insurance coverages and discounts provided by Allstate are always subject to the terms and conditions of the policy as well as state regulations and availability.
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