BUSINESS AUTO TERMS

Business Insurance Definitions

There are a lot of different commercial auto insurance terms referenced when it comes to a business auto insurance policy. Use our business auto insurance glossary below to better understand what each term means.

Actual cash value

The value of a car with year, make and model taken into consideration. Wear and tear of the vehicle, age and mileage are also factors.

Appraisal

Determines the value of a vehicle or property, or determines the extent of damage. Appraisals are usually conducted by an impartial expert.

Bodily injury liability coverage

Pays damages for injury or death resulting from a covered accident for which you are at fault. May provide you with funds for a legal defense.

Carrier

The company providing the business auto insurance is called the carrier.

Certificate of satisfaction

A form signed by the insured when the insured takes delivery of a car from the repair shop indicating satisfaction with the repairs.

Claim

Consists of a demand or request for payment under the terms of the policy.

Declarations page

A page in your policy that includes basic information, such as your name and address and a description of the vehicle(s) insured; the effective dates of the policy; the amount of insurance coverage and the premiums.

Deductible

The portion of a claim that you pay. Having a higher deductible amount will lower your insurance premiums but increase your costs if there in an accident.

Endorsement

An endorsement modifies your policy by amending specific coverage. It can add coverage, modify it and even reduce or remove coverage.

Exclusion

A restriction in your business auto insurance reducing and/or removing coverage for certain potential events, persons, property or locations.

Expiration date

Indicates the date when your insurance coverage ends. The renewal policy (or new policy) typically starts on this date.

Field adjuster

An insurance adjuster is one who works outside the office and conducts accident scene investigations, damage inspections and face-to-face meetings with policyholders.

Financial responsibility law

This law requires owners and drivers of vehicles to have enough money on hand to compensate people who they injure. Liability insurance is the most common way to satisfy the financial responsibility requirement.

Indemnification

Provides financial compensation for a loss with the intent to restore a person or entity to the financial position enjoyed before the loss.

Insurable interest

Exists when an individual would suffer an economic loss as the result of damage to property or bodily injury.

Insurance ID card

A card issued by your insurance company that contains basic information about your insurance policy.

Insurance score

A person’s insurance score is influenced by their credit history, and is used in some states to determine whether a policy is written.

Leased vehicle

A car or truck rented under a long-term contract or lease. The company leasing the vehicle retains ownership of the vehicle and is listed on the insurance policy as an insured party.

Liability

A legal obligation or responsibility for the injury or damage suffered by another person, and enforced by law.

Limit

Refers to the maximum amount of coverage purchased by the policyholder.

Loss

Amount of damage to a vehicle or other property, and/or injury suffered by a person. In the insurance world, this term is used interchangeably with the word “claim.”

Medical payments coverage

Reimburses the driver or passenger for medical or funeral expenses incurred as the result of a covered accident. It also covers medical costs of pedestrians that you may have injured, up to the limits of your policy.

Motor vehicle report

Refers to a report from the division of motor vehicles indicating accidents and violations on your driving record.

No-fault insurance

If you are in a no-fault state as determined by law, this coverage pays for medical expenses, lost wages, or other accident-related expenses regardless of who is responsible for the accident.

Non-renewal

When an insurance company decides to not renew a policy at the end of its policy period.

Personal injury protection

Pays for medical treatment, lost wages or other medical expenses related to an accident regardless of who caused the accident.

Premium

The cost of the insurance policy that is paid in monthly, quarterly, semi-annual or annual installments.

Re-inspection

Consists of the review of an estimate or appraisal done by an adjuster to guarantee that the work required in the estimate or appraisal is being completed by a body shop.

Release

A legal document indicating that all financial obligations from the past, present or future resulting from an accident or occurrence have been fulfilled.

Risk

Refers to the probability of a particular loss occurring.

Total loss

Refers to condition of a vehicle or other property when the damage sustained is so great that repair costs would surpass the value of the vehicle or property.