Insurance Terms

Additional Insured
A person or entity other than the named insured who is covered under the policy.
One who determines the amount of loss suffered. A company adjuster represents the company. An independent adjuster can represent the insured party or the company.
Amount of Insurance
Based on the terms of your policy the most your insurance company will pay for a single loss. The maximum amount you can collect.
Automobile Liability Insurance (PLPD)
Protection for loss incurred through legal liability for bodily injury and damage to property of others caused by accidents arising out of the ownership, maintenance, or use of an automobile. This is the minimum type of coverage required by state law.
Bodily Injury Liability
A form of liability protection covering your legal liability for bodily injury to others caused by your negligence. This coverage is required by law and is automatically included in your policy.
Certificate of Insurance
A form which verifies that a policy has been written and states the coverage in general, also known as a proof of insurance. The document you need to carry in your car and to show the Secretary of State in order to renew or obtain your license plates.
Collision Insurance
A type of Car Insurance that covers the damage to your car caused by a collision with another vehicle or object like a tree or telephone pole. This coverage is NOT included if you buy the basic insurance (PLPD) that you are required by law to have.
Comprehensive Coverage
This is the coverage that covers your car for things other than collision, such as theft, vandalism, falling objects like trees and breakage of glass from rocks and things.. This coverage is NOT included if you buy the basic insurance (PLPD) that you are required by law to have.
Covered Loss
Illness, injury, death, property loss, legal liability, or any other situation or loss for which the insurance company will pay out under a policy.
The amount of an insured loss that you pay before the insurance company starts paying.
Effective Date
The day that your insurance policy goes into force.
Specific situations, conditions, or circumstances that are listed in your policy as being not covered.
Full Coverage
Insurance that pays for all insured losses in full, after any deductibles. For car insurance, this usually means coverage for liability as well as any damage to your car. The basic coverage required by law (PLPD) is NOT full coverage because it does not pay for damage to your car.
Homeowners Policy
This is a policy that covers your house and your contents for fire, theft and many other unfortunate things that can happen to you. It also covers Personal Liability for some things that you could be sued for. This might include if someone slipped and fell on your property or if your dog bites somebody not in your family.

Renters Insurance is the same thing but does not cover the house or apartment you live in.

Independent Agent
An insurance agent or agency who sells insurance as an independent contractor representing multiple insurance companies rather than one exclusive insurance company. The independent status is illustrated by the independent agent having the ability to choose the insurance and insurance company that is appropriate for the customer. This is as opposed to a direct agent such as State Farm or Allstate that must only sell one policy for one insurance company.
No-Fault Auto Insurance
A form of auto insurance required by law in some states, including Michigan. This type of auto insurance is designed so that the victims of auto accidents collect from their own insurance companies for hospital and medical expenses and for the damage to their own vehicle. Michigan has the broadest no-fault law in the United States.
Property Damage Liability
A form of liability protection covering your legal liability for damage to property of others caused by your negligence. This is required by law and is automatically included in your policy.
Personal Injury Protection (PIP)
This covers the insured person for medical expenses, funeral expenses, lost work benefits and additional living expenses you incur because of an auto accident. The insured person is covered in cars you own as well as cars you don’t own as well as if you are injured as a pedestrian. The amount of coverage is unlimited and payable for the life of the injured person, which is why it is so expensive. This coverage is required by law and is automatically included in your policy.
Personal Property Protection
This covers you for property damage that you cause through your negligence in an auto accident up to One Million dollars. This is required by law and is automatically included in your policy.
Rental Reimbursement Coverage
This is an optional coverage on an auto insurance policy that pays for expenses incurred by you when a temporary replacement vehicle is needed after a covered accident to you vehicle.
Uninsured Motorist Coverage
This coverage is in case you are in an accident with another person who does not have insurance. It pays you if you have permanent bodily dysfunction, loss of limb or are killed and you cannot collect from the other driver.
Underinsured Motorists Coverage
This is cove rage you can purchase to protect yourself in case you are involved in an accident with someone who does not carry higher limits of liability coverage.
Lapsed Policy
A policy that is no longer in force because of non payment of premium.
Liability under the law. In insurance, it is most often used to refer to the liability that someone has if he or she should negligently injure another party. For example, an owner of a car may be held legally liable if he or she is negligent in the operation of the car and injures another person or damages another person’s property as a result of that negligence.
Liability Insurance
Protection that pays sums that you are legally obligated to pay, or that the insurance company has agreed to pay, as damages to others as a result of the your negligence. Usually provides coverage for bodily injury or damage to property of others.(See Bodily Injury and Property Damage)
Liability Limits
The maximum amount your policy will pay to cover your liability. (See Liability)
Lost Polity Release
A statement signed by an insured releasing the insurance company from all liability for a lost or mislaid insurance policy.
MCCA (Michigan Catastrophic Claims Association)
This charge on your car insurance goes directly to the MCCA. The MCCA was set up in Michigan to pay PIP (see personal injury protection) claims that go above a certain limit which is currently $300,000. This charge is required by law and is automatically included in any car insurance in Michigan.
This is a coverage that is part of the Michigan No-Fault Law and is optional but we highly recommend it. If you are in an accident with another person on you are at fault they can sue you up to $500 to either cover their deductible or the cost of their vehicle if they have collision coverage. This pays the $500 on your behalf.
Motor Vehicle Record (MVR)
Your driving record that shows all your tickets and accidents. Insurance companies usually go back 3 years on your record but for major violations such as drunk driving, reckless driving or negligent homicide, they go back 5 years
The failure to exercise the care that an ordinary prudent person would exercise; either doing that which a prudent person would not do, or failing to do that which a prudent person would do.
No-Fault Car Insurance
Coverage designed to compensate victims of car accidents via their own insurance company, regardless of fault and without the necessity of proving negligence on anyone’s part. No fault laws passed by different states vary greatly. Michigan has the broadest no-fault law in the United States.
Non-Owner Policy
A auto insurance policy for some one who does not own a car but needs coverage in case they borrow or rent a car. Not necessary in Michigan.
PLPD (Personal Liability & Property Damage)
This is an old term that applied before the No-Fault law in Michigan took effect in 1973. Now it is either, (1). a term that describes a car insurance policy that covers liability only and is the minimum you need to renew your license plates, or, (2) an insurance agency with many locations in Michigan that provides the least expensive car insurance you can buy with the best and most friendly service.
The website you are on right now.
Physical Damage
The actual damage or loss to you car caused by collision, overturn, fire, theft, vandalism or malicious mischief.
Primary Coverage
This is the coverage that pays expenses first whether or not there is any other coverage.
Proof of Loss
A formal statement made by you to an insurance company regarding a claim. It is intended to give information to the insurance company to enable it to determine the extent of its liability.
Restoration or putting back in force a policy that has lapsed to the non-payment of a premium when it was due. Some companies will reinstate your insurance and some will not. If the company will not reinstate, you have to start with a whole new policy.
Rental Re-Imbursement
This is an optional coverage that pays a fixed amount per day for you to rent a car if your car has been damaged in an accident and you cannot drive it.
Renters Insurance
This is insurance for people who do not own a home and either rent an apartment or a house. It covers your belongings as well as providing you with Personal Liability coverage.
Total Loss
A loss of sufficient size so that it can be said there is nothing left of value. The complete destruction of the property. For car insurance it means that the cost to fix your car is more that it is worth.
Towing Costs
An optional coverage or policy that pays the cost up to a fixed amount, for the towing of your disabled car.
Underinsured Motorist Coverage
This is an optional coverage you can buy to protect yourself to pay for damages or medical costs if you are in an accident that is not your fault and the other driver does not have adequate insurance to cover you.
A person who works for the insurance company that accepts or rejects risks for an insurance company. They also make other decisions regarding rates and eligibility.
To insure, to underwrite, or to accept an application for insurance.