All drivers should have a basic understanding of their auto insurance policy. This is especially true for anyone injured in a car accident. This awareness can also help victims if you have to make a personal injury claim. A good place to start is by learning the common auto insurance terms used in the industry.
Continue reading to review some basic terminology surrounding automotive insurance claims and policies, as well as where to get started with your car accident claim.
The terms and definitions listed below are likely to vary from state to state. Be sure to check with your insurance provider to confirm the details of your state’s particular auto insurance laws and policy limitations. If you have questions about making an accident claim, it is vital that you speak with a seasoned Indianapolis personal injury lawyer for professional advice and assistance you can trust.
Here are some common auto insurance terms you may come across:
Accident Forgiveness – While most providers will increase a policy holder’s premium after causing an accident, policies with accident forgiveness will not add a surcharge after a car accident.
Adverse Carrier – The insurance carrier of the other party involved in a car accident.
Appraisal – The estimation of the property damage and the cost to have it repaired.
At-Fault – The party who is legally responsible for damages resulting from an accident.
Binder – A provisional insurance contract that provides proof of insurance coverage until a permanent policy can be allotted.
Bodily Injury – Injuries sustained by individuals involved in an accident.
Claim – The formal request to an insurance company for compensation following a car accident.
Comparative Negligence – Victims who are partially at-fault can collect a partial amount of compensation for their damages and losses based on the percentage of their contribution to negligence. See our article on The Difference Between Comparative and Contributory Negligence.
Coverage – The overall protection and benefits provided by an insurance policy contract.
Covered Person – Those who are insured under a car insurance policy.
Damage – Harm or loss to a person or property.
Deductible – The fee the insured party must pay in order for their insurance company to pay their claim.
Proof of Financial Responsibility – A law mandating that all drivers must retain the state’s minimum amount of liability insurance coverage to legally operate each vehicle they own (Indiana’s requirement is 25/50/25 minimum liability insurance).
Indemnification – Compensating an injured party for the purpose of restoring their estimated financial position and quality of life back to what it was before an accident.
Liability – A legal and imposable obligation for the losses and damages suffered by an accident victim.
Liability Insurance – Car insurance coverage that defends against claims that a driver’s negligence cause a victim bodily harm or property damage.
Limits – The maximum benefits an insurance company will pay for losses and damages covered in an insurance policy.
Loss – The amount of money assigned to a claim.
Negligence – Failure to possess or demonstrate a level of care, expected by all persons under law, which protects another person, reputation, or property from harm or foreseeable and unreasonable risks.
No-Fault Insurance – A policy that covers medical treatment, lost wages, and other accident-related expenses, regardless of who is at-fault for an accident.
Per Occurrence Limit – The maximum benefits paid by an insurance company for all claims stemming from a single incident.
Per Person Limit – The maximum benefits paid by an insurance company for a single person’s injuries arising from a single incident.
Personal Auto Policy (PAP) – A simple, rudimentary automotive insurance policy that provides coverage for liability, medical payments, uninsured and underinsured motorists, and physical damage protection.
Personal Injury Protection (PIP) – A type of medical payments coverage in which all or a portion of medical expenses and hospital bills (driver and passengers) are paid for, no matter who is to blame for an auto accident. See our blog on Discussing Personal Injury Protection (PIP).
Policyholder – The individual who owns the policy. It may also include anyone covered under the policy.
Premium – The amount paid for an automotive insurance policy.
Property Damage Liability Coverage – This covers any property damage done to another person’s property in the case that a driver is at-fault for their accident.
Replacement Cost – The total cost to replace damaged property, with the exclusion of depreciation reductions.
Split Limits – An imbursement strategy used by the insurance company to pay for individual components of a car accident.
Underinsured – A policyholder who does not retain enough insurance coverage to cover all related damages in a car accident.
Unsatisfied Judgment Fund – A state fund intended to compensate individuals for any losses sustained from an automobile accident caused by an uninsured/underinsured motorist, or person without money.
Get Started on Your Car Accident Claim TodayCall Craven, Hoover, and Blazek P.C. at 317-881-2700 to schedule a free consultation with a licensed Indianapolis car accident attorney who can determine the best strategies for your case. Not only does our law firm offer free consultations, we never collect lawyer fees unless we prevail for you! Call 317-881-2700 to get started on your financial recovery, today.
Legal Disclaimer: Although every effort is taken to ensure the accuracy of this publication, it is not intended to provide legal advice. Individual cases differ and should be discussed with a lawyer.