Jones Insurance                                  21 West Main Street - Milan, MI 48160    734 439-8844      Fax: 734 439-8921
Email: office@myjonesinsurance.com                                                          Hours: 8:30 to Noon and 1:00 to 5:00 Mon.-Fri
                                                                                                                 After Hours Emergency; 734 645-8471 Don Kleinschmidt
Insurance Questions

                                Auto Insurance Consumer Guide  

http://www.michigan.gov/documents/cis_ofis_noflt_gd_25094_7.pdf



                                                     Definitions

Actual Cash Value (ACV) -
"Actual Cash Value" is the replacement cost of property damaged or destroyed at the time of loss, with deduction for depreciation. Actual cash value cannot exceed the applicable limit of liability shown in the declarations of the policy, nor the amount it would cost to repair or replace such property with material of like kind and quality within a reasonable amount of time after a loss.

Adjuster - The person who handles the settlement of claims on behalf of an insurance company, either as an employee of the company or an independent engaged by contract. Also called a claims representative.

Agent - The representative of an insurance company responsible for selling and servicing policies. Can be an employee representing only one company (sometimes called a "captive agent" or a "direct writer" or an "independent agent" who, through contractual agreements, may represent several different companies without being an employee of any of them.

Applicant - A person who signs and submits a written application for insurance coverage.

Auto Medical Payments - Optional automobile coverage that pays for medical expenses incurred by the insured driver or his or her passengers, without regard to who is responsible for the accident

Automobile Insurance - Contractual protection against losses resulting from the ownership and use of an automobile. Coverages common in auto policies include FIRE, THEFT, COMPREHENSIVE, COLLISION, PROPERTY DAMAGE and BODILY INJURY LIABILITY and UNINSURED MOTORIST.

Beneficiary - The person(s) named in the policy to receive the life insurance proceeds upon the death of the insured.

Binder - A legal agreement between an insurance buyer and an insurance company or its agent. it provides temporary insurance coverage until a policy is either issued or refused.

Bodily Injury - Injury to the body of a person as specifically defined in an insurance policy. Bodily injury liability is the legal responsibility for medical and related cost that may result from injury to the life or health of another person.

Broad Collision - No deductible if the other driver is substantially at fault.

Cancellation - The termination of an insurance policy either by the insured party or the insurance company, before its normal expiration date. A cancelable policy includes a provisions the the contract can be terminated by either party upon notice to the other. By contrast, a non-cancelable policy cannot be canceled by the insurance company during its specified term. (unless non-payment of premium)

Carrier - A trade term for an insurance company.

Claim - A demand for payment by a policyholder to an insurance company, or by an injured party to the policyholder, for recovery of a loss.

Collision Coverage - Insurance against a loss resulting from damage to the covered auto through collision with another object or upset of the auto.

Comprehensive Coverage - Covers damage to the auto not resulting from collision. For example: an auto is parked near a building being painted and becomes splattered with paint. Most claims paid under this coverage are for fire, theft and windshield breakage.

Conditions - The part of an insurance policy that spells out the responsibilities of the policyholder and the insurance company.

Coverage - The guarantee to pay if specific losses occur, according to the terms of the insurance policy.

Debris Removal Clause - This clause extends insurance coverage to include the cost of debris removal resulting from damage caused by a covered loss up to a specified limit of loss. The clause is an additional property insurance coverage

Declaration - Normally the first page of a policy (Also referred to as the Dec Page), it includes the insured's name, how long the coverage applies, and how much insurance is being provided.

Exclusions - Provisions of an insurance policy that state what the company will NOT pay for.

Fraud - Deception or action intended to cheat. In insurance, ordinarily involves intentional misrepresentation or concealment.

Independent Agent - An agent that represents more than one insurance company.

Insurance - A contractual agreement that calls for one party, in exchange for a consideration, to reimburse anther party for certain specified losses. The insurance contract is call a policy. The consideration is called a premium.

Insurability - Acceptability to the company of an applicant for insurance.

Lapse - Expiration or cancellation of an insurance policy by nonpayment of premium.

Liability - A condition of being bound by law to do something, enforceable in the courts. For insurance purposes it most often involve the payment of damages.

Libel - Publication of defamatory information. This CAN be covered by liability insurance.

Lien - A hold or claim one party has on the property of another, usually as security for the debt or other obligation. For example:, a home mortgage or loan on a car.

Limits - The largest total amount the insurance company will pay for covered losses. Many policies have multiple limits - a certain amount per person, another amount per accident and sometimes, an aggregate limit on all losses paid during the policy term.

ie.... 100/300/100. In this example, the first 100 represents $100,000 bodily injury coverage PER PERSON. The 300 represents $300,00 per accident for bodily injury. The last 100 represents $100,000 limit for property damage.

Loss of Use - In the event you could not live in your home after an insured peril occurs, the homeowners policy offers payment of temporary living quarters while you are waiting for repair work to be completed. You would also have additional expenses such as food and laundry paid for as well.

Mini-Tort - Pays up to $500 for uninsured damage to someone else's car for which you are responsible.

Ordinance or Law Coverage
(1) Coverage for Loss to the Undamaged Portion of the Building.

Pays for the loss of value of an undamaged portion of the existing building which must be demolished and/or removed to conform with municipal ordinance, code, etc.

(2) Demolition Cost

Pays for the cost of demolition of the undamaged portions of the building necessitated by the enforcement of building, zoning or land use ordinance or law.

(3) Increased Cost of Construction

Pays for any increased expenses incurred to replace the building with one conforming to building laws or ordinances, or to repair the damaged building so that it meets the specifications of current building laws or ordinances.

Personal Injury Protection - Pays your medical bills for you and any relatives living in your household if you are hurt in an automobile accident.

Physical Damage - Normally refers to the comprehensive and collision coverages of an auto policy.

Premiums - Payments to the insurance company to buy a policy and to keep it in force.

Property Protection -
For up to $1 million of property damage caused by your car in Michigan.

Replacement Cost Coverage - Unlike other types of insurance, replacement cost insurance does not depreciate your property of contents values. Every covered item that needs to be replaced will be treated as if it were brand new.

Term Insurance - Life insurance that does not build up cash value and where the premium normally increases as the insured gets older.

Towing and Labor Costs Coverage - This endorsement is used to extend your Automobile policy to reimburse you, up to a predetermined limit per disablement, for towing charges or other specified costs when your auto is disabled by a covered period.

Uninsured/underinsured Motorist Coverage - Optional coverage that pays the policyholder in the event an accident is caused by a driver who has no liability insurance or whose insurance is not adequate to cover the full amount of damages for Bodily Injury Losses.

Universal Life Insurance - A flexible premium life insurance policy under which the policyowner may change the death benefit from time to time (with satisfactory evidence of insurability for increases) and vary the amount or timing of premium payments. Premiums (less expense charges) are credited to a policy account from which mortality charges are deducted and to which interest is credited at rates which may change from time to time.

Whole Life Insurance - A basic type of permanent life insurance which can provide lifetime protection at a level premium. 

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