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What does insurance do?
Insurance coverage can help you pay for medical expenses for injuries
sustained in an automobile accident, provide financial protection
from lawsuits when you're at fault in a loss, pay for damage to
your vehicle due to vandalism, theft, or an "act of god",
pay for losses caused by an uninsured or underinsured driver, and
pay for repair or replacement costs of your vehicle.
Auto insurance is often a legal requirement. Sometimes its state
law or it may be the written agreement between yourself and your
lender. Auto insurance is designed to protect you financially. Let's
face it, most of us would find it difficult to pay for an injured
person's medical expenses, long term care, or to replace our vehicle
or someone else's. Auto insurance can help you in these situations.
Auto insurance may also protect you against someone who doesn't
have insurance or doesn't have enough insurance. The amount of coverage
you purchase and how financially protected you want to be is ultimately
up to you.
Insurance policies are made up of mandatory and optional coverage.
This allows companies to meet the needs of their customers. The
types of coverage that make up an insurance policy vary by state.
ICM Auto Insurance can help you meet your financial protection needs
with the guarantee that you will obtain the proper insurance coverage.
Our network of agents can help you meet your insurance needs. There's
a lot to know about insurance. The best way to know that you have
met your needs is by visiting one of the agents in our network of
independent agents. This extensive network of agents is there to
help educate you about insurance so you can make the right choice.
You can find an Agent here.
Who needs insurance?
Anyone who operates or will operate a motor vehicle needs auto insurance.
Most of us will operate a motor vehicle sometime in our lifetime.
As mentioned above, insurance is often a legal requirement. If you
plan on taking out a loan to buy a vehicle, your lender will require
that you carry certain coverage. Leasing a vehicle has its insurance
requirements too. Check with the state Department of Insurance to
confirm what coverage is required to operate a motor vehicle legally.
I've heard insurance can
be expensive, is this really true?
No. If you compare the cost of replacing a brand new car against
the semi-annual or annual premium you pay the insurance company,
you'll see that the cost of insurance is far less than the property
it repairs or replaces. Also, if you purchase coverage with low
limits or high deductibles, the total premium is less than if you
purchase high limits or low deductibles. Drivers who have clean
driving records reap the lower premium benefits not to mention may
qualify for discounts based on driving history. This adds up quickly,
discounts can take 10-20% off the total cost of your premium.
What does BI Liability
Coverage and other terms mean?
COVERAGE DEFINITIONS
Bodily Injury Liability
This covers your legal liability, up to the limits selected, for
injury or death to another person due to an automobile accident.
The first number is the limit available to any injured person and
the second number is the total limit for any one occurrence or accident.
Example: 15/30.
Property Damage Liability
This covers your legal liability, up to the limit selected, for
the damage to or loss of another person's property. Example: a vehicle
or fence.
Medical Payments
Pays for medical expenses, up to the limit selected, for injuries
sustained by you and occupants of your vehicle. This coverage only
pays for medical expenses.
Uninsured/Underinsured Motorist Bodily Injury
Pays for your injuries, up to the limit selected, caused by an uninsured/underinsured
driver or a hit and run driver.
Uninsured Motorist Property Damage
Pays for damage to your car, up to the specified limit, caused
by an uninsured motoris. In some states, this coverage is an
alternative
to Collision coverage. Some states offer Underinsured Property
Damage coverage. Ask your Agent or Customer Service rep. for
more details.
Personal Injury Protection (PIP) (No-Fault Coverage)
Pays for medical and rehabilitative expenses, work loss, funeral
expenses and replacement services incurred by you, members of your
family, passengers in your vehicle, and pedestrians injured by your
vehicle as a result of a loss. Losses are paid regardless of fault.
This coverage varies by state and is not available in all states.
Contact your state's Department of Insurance for specific information
regarding this coverage.
Comprehensive
Covers your vehicle, less the deductible you select, for damage
caused by fire, theft, vandalism, or other specified perils.
Collision
Covers your vehicle, less the deductible you select, for damage
to your vehicle due to a collision with another vehicle or if your
vehicle overturns.
Rental Reimbursement
Helps pay the cost of renting a vehicle should your vehicle be damaged
or disabled due to a comprehensive or collision loss for more than
24 hours.
Towing
Helps pay the cost of having your vehicle towed should it become
disabled.
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GENERAL DEFINITIONS
Agent
A person, corporation, or partnership authorized by an insurance
company or companies to sell insurance policies for them.
Applicant
A person who requests insurance coverage. Usually also the Named
Insured.
Application
The form which the applicant completes in order to purchase insurance.
Binder
A temporary, but legal, agreement to provide specified insurance
coverage until a policy is issued or declined by the company.
Cancellation
The termination of a policy before the expiration date. The insured
or the company can cancel a policy.
Carrier
The insurance company.
Claim
An attempt by an insured to recover under an insurance policy for
a loss covered by the policy, or an attempt by a third party to
recover damages caused by the insured.
Claimant
A person who has experienced a loss and reported the claim to the
agent or company.
CLUE (Comprehensive Loss Underwriting)
CLUE is a database of loss information received from insurance companies.
Companies who subscribe to CLUE can request loss information on
any driver and subsequently charge additional premium due to driving
history. Companies who subscribe to CLUE also report claim information
on their policyholders to CLUE.
Coverage
Protection provided by a policy for a loss.
Credit Score (Financial Responsibility)
A credit score is a number that is made up of hundreds of characteristics
from an individual's credit history. In order to calculate the most
accurate rate for a policy, the score may be requested (ordered)
with the insureds permission by the company. This is usually completed
during the quote process.
Declarations Page (DEC)
The page in the insurance policy that contains the specific information
regarding the insured. Such as premium amounts, effective and expiration
dates of the policy, coverage limits and deductibles, listed drivers,
listed vehicles, and driver violations.
Decline
Refusal to write a policy.
Deductible
The amount of the loss you have agreed to pay.
Department of Insurance (DOI)
Each state has a Department of Insurance that regulates the rates,
forms, and practices of each insurance company writing business
in their respective state.
Earned Premium
The amount of policy premium the insurance company has earned for
the number of days the policy has been in effect. Example: The policy
is for 365 days, but only 150 days have actually passed since the
policy was purchased, therefore the company has earned only 150
days worth of premium. After the expiration of the policy, the premium
has been fully earned by the insurance company.
Endorsement
A supplementary written agreement form attached to a policy for
the purpose of changing the terms of a policy. Some endorsements
are attached when the policy is originally written and others during
the term of the policy. If an endorsement is attached during the
policy term, it supersedes anything in the policy to the contrary.
Exclusion
Policy provision removing coverage for specified property, hazard,
person, or event. Example: a driver may be excluded from coverage
at the request of the named insured.
Garaging Address
The address, including zip code, where your car is usually kept.
Typically, this address will be the same as your primary residence
address.
Insurance
A contractual arrangement under which one party agrees to reimburse
another against loss or damage arising from an unknown event for
a certain amount of money. The sum paid to the insurer is called
premium.
Installments
Payment of your policy premium. This is usually paid monthly, quarterly,
semiannually, or annually.
Loss
Damage to persons or property. Loss also means CLAIM.
MVR (Motor Vehicle Report)
A record of the driving history of individual drivers listed on
the policy.
Named Insured
The name the policy is issued under.
Policy Effective Date
The date the policy becomes effective. This also refers to the date
when policy changes take effect.
Policy Expiration Date
The date the policy expires.
Policy Term
The amount of time for which a policy is written. The term
is usually for 6 or 12 months.
Premium
The cost of insurance for a designated policy period (term). The
premium is usually paid in installments.
Pro Rata
A means of determining an additional or return premium for mid-term
changes or cancellation. The pro rata factor is proportionate to
the length of time coverage is provided in days divided by the total
number of days in the policy period.
Reinstatement
A term used when a policy is reactivated after it was canceled.
Renewal
The continuation of a policy beyond the expiration of the policy.
A renewal quote is provided to the insured for review before the
existing policy expires.
Return Premium
Money owed to the insured by the insurance company for a reduction
in coverage.
Surcharge
An additional charge made on a class or policy basis. An example
of a type of surcharge is business use.
Term
The period of time for which a policy was issued.
Vehicle Use
This is how your vehicle is used. Such as to/from work or school,
for business or for pleasure.
VIN (Vehicle Identification Number)
This is the 17-digit number that identifies your vehicle year, make,
and model. Normally located on the driver side of the dashboard.
This number is usually found on your vehicle registration and title.
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How do I get started?
We hope that we have answered your questions. For more information
about your specific situation, contact one of our independent agents
using our FIND AN AGENT {Link} feature to find an agent near you.
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