Auto Insurance Terms You Should Know

In order to be successful and proficient in all business it is very important that one familiarize himself with the terms of that particular field of interest or business he intend establishing. That is why knowing such terms will undoubtedly build you basic knowledge of your field of interest and eventually lead to you success in it.

Take a moment to review some of the terms associated with auto insurance and quotes before going into it as this will be very much helpful to you in your auto insurance policy success.


Also known as claim adjuster, this is an insurance company worker who is primarily responsible for investigating and settling all claims brought by claimants or insurance carriers resulting from a specific casualty. His responsibilities also include the evaluation and payment of the available or each claim to the policyholder.

Payment of claims is usually carried out only after all proceedings are verified. The claim may as well depend on the active insurance or coverage policy available of the item.


This is an unplanned, unforeseen or unintended event beyond the control of an insured, resulting in the loss of property e.g. car. The incurred loss can be compensated as a claim to the claimant by the carrier. The claim is based on what is observed and the actual cash value of the car or items involved.

Auto insurance companies try in the best of their abilities to supply sustainable, efficient, quality, and affordable policy coverage to their policyholders. They also aim at increasing the savings of their insured to meet specific needs e.g. building a big collection of policyholders.


This is a specialist who computes premiums and risks of insurance. They are duly involved in the calculation of loss reserving, life expectancy and determining accident frequency. They serve as one of the key ingredients in an insurance company.

They also primarily help in making profit and financial stability of carriers (insurance companies) which they serve and involved in trends assessment as well as determining insurance prices.

These specialists also have a share in managing the carrier’s expenditure and the giving of claims to claimant on any needed basis. They help in ensuring that neither the carrier nor the insured suffer unnecessary loss.

Accident Frequency

This refers to the number of times there occur an accident. The frequency is calculated during the time of the insurance policy. The actuary normally computes the frequency of accidents to help determine possible losses.

It should be noted that the phrase may not actually mean the number of times or frequency an accident really does occur but the number of times an accident may occur due to the prediction of the actuary. Premiums can also be accurately and appropriately paid using this principle.


It is a formally written document of the estimation of the value of property of the insured. This is done as against any future casualty resulting in the loss of property.

When an appraisal is eventually damaged, it can be completed or replaced by the adjuster of the insurance company or sometimes a vehicle repair expert.

Additional Insured

It is an individual or organization who also has an auto insurance protection under the primary name insured auto policy. The protection may be extended form an auto leasing company to an individual who lends a car (s) to the primary insured.

In the event of an accident, damage or collision, the leasing person or company has protection against the specific casualty caused by the name insured.


He is a licensed insurance representative who sells insurance for an insurance company, negotiating and/or effecting insurance contracts. He serves as the middle man in providing quality insurance service to the policyholder.

Insurance agents usually carry out their work on a commission basis and in most cases they are non-exclusive or perhaps exclusive agents.

Agreed Price

This is the cost of repairs of damage to property as agreed upon by the adjuster and the corresponding representative of the body shop. Whenever an incurred loss occurs resulting in an accident to a car, the cost of repair agreed on will be used as a claim to the claimant.

The cost neither increase nor decrease as the price for any resulting damage for the car has already been agreed upon.

Agreed Value

This is the value of the vehicle agreed on by the insured and the insurer which will be paid out on the event of an accident or any other form of unforeseen damage.

It is a policy available mainly for custom vehicles or collectible which actual value remains the same over time without depreciating.

Assigned Risk Plan

Auto insurance plan managed by the state and mostly for individuals and car owners who cannot afford to obtain or qualify for auto insurance or conventional liability coverage due to financial insufficiency or poor insurance record.

They may be placed in residual market in order to get an insurance policy with carriers or insurer but for a higher price. Their coverage is through the state.


Wise Coverage Choices For Auto Insurance

When you’re getting your insurance policy in place you want to make sure that it’s “just right”. Not having enough coverage can lead to problems, and having more coverage than you need is a waste of money. Finding the right balance is key. A good auto insurance agent will help you do this. They’ll make sure you have a policy that covers you for the most likely things to happen to your car, and will exclude items from your policy that you most probably won’t need.

You don’t want to leave your insurance decisions entirely in the hands of your agent, of course. You’ll want to do your own research and be sure that what they are telling you sounds right. Basically, you’ll want to treat them as a guide that is helping you to the right coverage and making sure you don’t forget anything. They do work for the insurance company, and get paid by how big of a policy you sign up for, so be sure to keep them in check while still getting a smart deal.

The most basic step when getting auto insurance is to make sure you are adhering to your state’s insurance laws and regulations. They’ve each got differing degrees of coverage that is required in order to drive. Every insurance provider is aware of these minimal levels and will include them as a foundation for the rest of your policy. More than likely you’ll want to get more than just the state minimums so that you’ll be protected from additional occurrences.

Most states only require third-party coverage which protects you from accidents that you yourself cause. A wise choice would be to get some collision coverage so that you’re protected in any type of vehicular accident. This means that you’ll be covered regardless of whose fault it is, and whether or not the other person has insurance or not.

The last type of insurance you might consider is comprehensive coverage. If you have money you don’t know what to do with you can just get fully comprehensive coverage and never have to worry about anything happening to your car. But comprehensive policies can also be pick-and-choose style so that you can take what you need and leave what you don’t. Get the data for your area and see what the likelihood of weather damage, theft, and vandalism is. If you live in a high crime area you might want to have your car covered for theft and vandalism. If you live in a part of the country that is prone to flooding or tornadoes, you should consider adding these to your coverage.

Making smart decisions when getting auto insurance can end up saving you hundreds and potentially thousands of dollars. It is worth your time to examine your current policy to see if you’re paying for things you don’t need, or if your coverage is a little bare in some areas.