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INSURANCE - Terminology and Definitions
COMPREHENSIVE COVERAGE - Coverage for damage beyond the vehicle owner’s control. Usually when vehicle is not moving, such as vandalism, hail damage, fire, theft, water, falling tree limbs, etc. Commonly combined with collision coverage and required on financed or leased vehicles.
COLLISION COVERAGE - Coverage for damage incurred to your vehicle. Such as collisions with moving or stationary objects while moving regardless of fault. Usually required on financed or leased vehicles.
UNINSURED MOTORIST - Coverage for medical expenses when you are involved in an accident with an uninsured motorist after your PIP coverage is exhausted.. Does not cover vehicles or property damage.
PERSONAL INJURY PROTECTION or PIP - Coverage for your medical expenses and lost wages only. It is primary to any other insurance coverage such as coverage from the at fault driver or your personal health insurance. PIP is mandatory in the state of Florida.
LIABILITY COVERAGE - Coverage for property damage to the OTHER PARTIES property or vehicle. The mandatory minimum requirement in the state of Florida is $10,000. This can be exhausted quickly since the average price of a new vehicle is more than $15,000 or if multiple vehicles are involved.
LIABILITY (as in accepting liability) - When an insurance company accepts liability, they are accepting responsibility for the damages. This can sometimes be a percentage, as in 50% liability. In this case, the insurance company will pay for 50% of the damages, and you are responsible for the remainder.
SUBROGATION - When used in the repair industry, means when one insurance company collects the damages from another insurance company.
Examples:
1.) You are involved in an accident. While the insurance companies investigate fault, you may choose to go ahead with your repairs under your insurance policy. If the other insurance company accepts liability, your company would collect from the at fault insurance company. If your repairs are completed before the other company has accepted liability, you may be required to pay your deductible. It is usually refunded after your insurance company collects from the at fault insurance company. Or, your insurance company may waive it.
2.) You are involved in an accident. You have insurance company “A” which does not use any aftermarket parts. The at fault party has insurance company “B” which uses aftermarket parts heavily. You may choose to have the repairs completed under your policy per your insurance company guidelines to minimize aftermarket parts usage on your vehicle. Your insurance company will collect the damage amount from the at fault insurance company. In this case, the deductible may or may not be waived or reimbursed. Your insurance company can answer any questions you may have in this scenario.
DEDUCTIBLE - The portion of the repairs that the customer is responsible for. Usually $250, $500, or $1000. The amount is selected by the customer when the insurance policy is purchased. Higher deductibles are often chosen in exchange for lower premiums. The insurance company will issue repair payments minus any deductible. The deductible is paid to the repair facility by the customer when the repaired vehicle is picked up.
Disclaimer
**These definitions are condensed versions and by no means complete. For complete definitions and explanations contact your insurance provider or agent.
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