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Terms & Definitions - 303-868-6272

We at TCIA know the language used by the insurance industry can be confusing. We want to make sure that you clearly understand your options and know precisely what you’re paying for.

Here are some terms we use for types of coverage. There are also a variety of other terms that might be unfamiliar to you. We hope this glossary helps make the world of insurance easier to understand.

Additional Living Expenses: If you can’t live in your home because of a covered loss, your insurance company may pay the necessary increase in living expenses while damage is assessed and your home is repaired or rebuilt.

Broad Form Liability Coverage: Helps protect you from expenses related to injuries or property damage you or your watercraft cause in an accident. Some policies also cover certain accidental fuel spill liabilities and wreckage removal.

C.L.U.E.: Comprehensive Loss Underwriting Exchange is a claims history database created by ChoicePoint that enables insurance companies to access consumer claims information when they are underwriting or rating an insurance policy. It typically contains up to five years of personal auto or personal property claims history. You can order a C.L.U.E. report: LexisNexis Personal Reports. Call toll free 1-866-312-8076. Or you can request a copy from the seller of a home you are purchasing.

Collision Coverage: Pays to repair your auto, classic auto, motorcycle, RV damages caused by an accident. Your agent can help you determine the limits you need based on the agreed value of your vehicle.

Comprehensive Coverage: Pays to repair or replace your vehicle if it is stolen, vandalized or damaged in some way other than in a collision. May include loss from fire, cracked windshields, floods, falling objects, and wind.

Custom Parts & Equipment Coverage: Many motorcycle owners like to customize their rides, and some policies pay for customized parts and equipment, often at no extra charge. Ask TCIA for details.

Deductible: When you get insurance, you agree to pay up to a certain amount out-of-pocket in case of a loss. This amount is called your “deductible.” The deductible you choose often affects how much you pay for your premium. For example, a higher deductible usually means a lower premium. In the case of a covered loss, you’ll only be required to pay your deductible, and the insurance company usually covers the excess, up to the applicable limit for that loss under your policy.

Emergency & Roadside Assistance: For auto, boat and personal watercraft, emergency assistance pays for the cost of towing or emergency service. For RVs, it also covers housing and transportation costs if your RV becomes uninhabitable and covers the loss of personal property in your RV. Some policies also provide roadside assistance for motorcycles.

Excess Liability: Sometimes used interchangeably with "umbrella", "excess liability" refers to extended liability coverage. This coverage is meant to supplement your insurance coverage if the damages exceed your liability coverage. Be sure to talk to TCIA about what your excess liability covers.

Fidelity Coverage: Companies and businesses often purchase this coverage to protect them against loss from employee dishonesty (such as theft of money, equipment, or other assets).

Identity Theft: Identity theft occurs when someone steals your personal information and uses it to open accounts or incur charges without your permission. Thieves can access your personal information in a variety of ways, such as stealing your personal mail, your wallet, or hacking your computer files. The thief then uses your identity to rack up debt in your name or perhaps to issue fake IDs. For more information on identity theft and tips on prevention visit the FTC’s Identity Theft Site.

Indemnity: Providing indemnity means to financially restore someone after a loss, through payment, repair or replacement.

Insurance Score: An Credit Based Insurance Score (CBIS) is derived from information on your credit report. It is a number that measures likelihood of having an insurance claim—not a measure of credit worthiness. Insurers use CBIS along with a number of other factors, including driving records, claims history, and the type of home or vehicle owned, to evaluate new and renewal auto and homeowner insurance policies.

Most states have rules about how credit information can be used in insurance. Contact your state’s Department of Insurance for the latest information on your state’s rules.

Liability & Personal Liability Coverage: For homeowners, this coverage applies if someone is injured or property is damaged and you are to blame. The coverage applies anywhere in the world. When choosing liability coverage for your home, auto, boat, personal watercraft, or RV, consider things like how much money you make and what you own. Your liability coverage should be high enough to protect your belongings if you are sued.

Medical Coverage (Home): Covers medical expenses for guests if they are injured on your property, and in certain cases covers people who are injured off of your property. It does not cover healthcare costs for you or other members of your household.

Medical Coverage (Auto, Boat, Personal Watercraft, Motorcycle, RV): Provides for your passenger and your medical expenses that are the result of an accident.

Personal Articles Floater: Everyone has possessions of value in their home and some are of a high monetary worth and some which simply hold a great deal of importance to the owner. With a typical homeowner insurance policy the major items in a home, including appliances, furniture and clothing, are covered in the event of a theft or loss. There’s also some (smaller limits) coverage for other valuable items, such as jewelry, personal computers or antiques. In situations where high-value items in a home fall outside the scope of even the broadest home insurance policy, a personal articles floater may be a viable option. Personal Articles Floater insurance provides a greater range of coverage, including the ability to claim damage on the items if the homeowner accidentally breaks them or if they were damaged in a flood or other natural disaster that a typical policy would not cover. Personal articles floater policies also cover losses to items that occur anywhere in the world instead of just in the United States, which is the extent of coverage provided by a standard policy. This is particularly useful for those who travel for business or pleasure and take their laptops, jewelry, golf clubs and other valuable items with them.

Personal Property Coverage: Your home is filled with furniture, clothes, sports equipment, and other items that mean a lot to you. This coverage helps repair or replace these items if they are lost, stolen or destroyed as a result of an insured event. it is important to understand that certain types of personal property like electronics, jewelry, and art work have special sub-limits that limit coverage. It is important to be aware of these sub-limits and make sure that each meets your unique need.

Personal Watercraft (PWC): A personal watercraft (PWC) is a recreational watercraft that the rider sits or stands on, rather than inside of, as in a boat. Models have an inboard engine driving a pump jet that has a screw-shaped impeller to create thrust for propulsion and steering.

 

Physical Damage Coverage for Watercraft: Pays to repair the damage done to your watercraft due to an accident. It also generally pays to repair or replace your watercraft for insured situations such as theft, fire, vandalism or other non-collision damages that occur in or out of the water.

Premium: Simply put, a premium is the payment you make in exchange for one term of policy coverage.

Property or Dwelling Coverage: Typically pays to repair or rebuild your home if it’s damaged or destroyed by an insured event.

Replacement Cost: A method for valuing the reimbursement of property on an insurance policy. The most important concept to understand in regards to replacement cost is “new for old, like kind and quality.” The insurance company is going to give you the amount of money (up to your policy limit) that it takes for the materials and labor to replace your home. In most cases, this is the preferred property valuation method.

Scheduled Personal Property Coverage: If you have special possessions such as jewelry, art, antiques or collectibles, you may want to talk to your agent about this additional coverage.

Umbrella Insurance: Policy that works exactly as the name describes. The umbrella policy sits over the top of underlying insurance policies and provides an extra layer of liability insurance. ​In the case of a personal umbrella underlying policies would include auto insurance, homeowners insurance, boat insurance, rental property insurance, etc. If the limit of liability is used up on the underlying policy then the umbrella kicks in to provide additional coverage. Umbrella insurance policies are an important part of every insurance program.

Underwriter/underwriting: Underwriting is the process of assessing risks when deciding whether to issue a policy of insurance.

Uninsured/Underinsured Motorist Coverage: Pays for damages associated with bodily injury or death from an accident caused by an uninsured, underinsured or hit-and-run driver, as defined by the law in the jurisdiction where the accident occurred, who is at fault. It also covers you if you are hit as a pedestrian.

Unattached Equipment Coverage: Pays to repair or replace equipment that isn’t permanently attached to your boat or personal watercraft. This includes items like life jackets and water-skis.