Allstate Insurance Coverage Terms

Allstate Insurance Auto Coverage Terms

Understanding Allstate Insurance coverage terms is important to getting the best auto insurance policy. Insurance companies like Allstate use a lot of special terms for auto coverages. This glossary will explain the ones most commonly used:

Accident Forgiveness
In most states, customers who have not had an at-fault accident in the previous five years qualify for this program. Accident forgiveness means that won't add a surcharge to your premium after your next at-fault accident.

Actual Cash Value
The total value of the vehicle or any of its parts that has agreed to insure. It is the fair market value of the vehicle prior to a loss.

Actuary
A statistician who computes insurance risks and premiums. Actuaries keep profitable and financially stable by setting prices, assessing trends, and determining how much to hold in reserve to pay claims.

Adjuster
See Claim Adjuster.

Adverse Carrier
Term used to refer to the other party’s insurance company.

Agent
An individual that acts as a representative for the company and sells insurance, usually on a commission basis. This individual could be an "exclusive" or "non-exclusive agent."

Agreed Price
The price or cost of repairs agreed to by the AD (auto damage) adjuster or independent appraiser and the body shop representative.

After-Market Parts
After-market parts (also called competitive auto repair parts) are made by a company other than the manufacturer of the auto. The after-market parts we authorize meet or exceed the quality of the manufacturer’s parts but cost less. guarantees these parts for as long as you own the car.

Amendment
A change to the basic policy contract. An amendment alters the policy; an endorsement adds to it.

American International Underwriters
offers overseas insurance from American International Underwriters through International Insurance Underwriters agency.

Anti-lock Braking System (ABS)
A computer-controlled high pressure system that assists the vehicle’s normal braking system. ABS allows all wheels to slow at the same rate, thereby preventing loss of control.

Anti-Theft Device
A device that deters auto theft. Autos equipped with these devices may entitle you to a discount on your insurance premiums.

Appraisal
Process that determines the value of property, or the extent of damage, usually performed by an impartial expert.

Arbitration
A process of settling a dispute through an impartial party. It is used as an alternative to litigation.

Assigned Risk (AIP)
A driver or vehicle owner who cannot qualify for insurance in the regular market. He or she must get coverage through a state assigned risk plan which specifies that each company must accept a proportionate share of these drivers/owners.

Assured
Means the same as an "insured," "policyholder," or someone who has an insurance policy.

At-Fault
The party that is legally liable for the damages in an accident.

Auto Damage (AD)
Division of the claims department that handles auto claims.

Auto Insurance
Auto Insurance provides protection from losses resulting from owning and operating an auto. The insurance covers losses to the insured’s property and losses for which the insured is liable as a result of owning or operating an auto.

Auto Theft
The theft of an auto is a type of loss that is covered under comprehensive coverage.

Binder
A temporary agreement declaring that the policy is in effect. Used in certain cases to protect a policyholder when it is not possible to issue a policy or endorse the old policy immediately.

Bodily Injury (BI)
Physical injury sustained by a person.

Bodily Injury Liability Coverage
Pays damages for bodily injury or death resulting from an accident for which you are at fault and provides you with a legal defense.

Cancellation
Termination of an insurance contract before the end of the policy period, by the insured or insurer, usually in accordance with provisions in the contract.

Carrier
The insurance company or insurer.

Catastrophe
An aggravated disaster. An act of nature such as a severe windstorm, hurricane, flood, earthquake, or tornado which results in extensive damage to property.

Certificate of Satisfaction
A form signed by the insured when he or she takes delivery of the car from the repairer. It certifies that he or she is satisfied with the vehicle operations, appearance, and visible quality of the repairs.

Claim
Any request or demand for payment under the terms of the insurance policy. A claim may be made as a result of injuries or damages to an insured or for a third party’s injuries or property damage allegedly caused by the insured.

Claimant
One who initiates a claim.

Claims Adjuster
The person responsible for investigating and settling a claim.

CLUE® Report
Comprehensive Loss Underwriting Exchange (CLUE) reports provide claims history information.

Collision Coverage
Pays for damage to your car when it hits or is hit by another car or object, or if the car overturns.

Comparative Negligence
A doctrine of the law that enables claimants to recover a portion of their damages even when they are partially at fault, or negligent. However, the claimant’s recovery is reduced by his or her percentage of contributory negligence. Generally, the claimant will recover only if his or her negligence is not as great as or no greater than that of the other party. Each party’s negligence is compared to other(s) and a claimant’s recovery is reduced by the percentage of his own negligence. Unlike contributory negligence, the tortfeasor’s negligence does not totally bar recovery; it only causes it to be reduced.

Competitive Auto Repair Parts
Competitive auto repair parts, or after-market parts, are generic parts made by a company other than the manufacturer of the auto. These parts meet or exceed the quality of the manufacturer’s but cost less. guarantees these parts for as long as you own the car. If we authorize these parts, we show this on the estimate you receive.

Competitive Estimate
A term used when the company requests that you submit two or three estimates from independent repair shops.

Comprehensive Physical Damage Coverage
Pays for damage to your car from theft, vandalism, flood, fire or other covered perils.

Condition
The portion of the insurance contract which outlines the duties and responsibilities of both the insured and the insurance company.

Condo Insurance
A type of homeowners insurance that meets the special needs of condominium owners.

Contributory Negligence
A doctrine of law that stands for the proposition that a claimant may not recover for injuries or damages caused by another’s negligence if his or her own negligence has contributed to the injury or damages. In states recognizing the doctrine, one’s contributory negligence will bar one’s claim.

Coverage
The scope of the protection provided in your insurance contract as well as any of several risks covered by a policy.

Customized Vehicle
An auto that has been altered or has additional equipment and accessories that were not factory-installed.

Cycle-Gard
The motorcycle insurance policy developed by Indemnity Company to meet the special needs of bike owners.

Damage
Loss or harm due to an injury to a person or property.

Damages
Money that one party becomes legally obligated to pay to another party because of a loss or harm to their person or property.

Declarations
The part of your policy that includes your name and address; the property that is being insured, its location and description; the policy period; the amount of insurance coverage and the applicable premiums.

Deductible
The portion of a claim you pay out-of-pocket before the insurance company pays. Choosing a higher deductible will lower your insurance premiums.

Defensive Driver Discount
Certain drivers (usually over age 50) who have voluntarily taken a defensive driving course may qualify for this discount on their auto insurance premiums.

Depreciation
The decrease in value of any property due to wear, tear, and/or time. Generally this is not an insurable loss.

Direct Check
Direct Check is electronic payment method that lets you to pay your premium online with an electronic check.

Direct Pay
Direct Pay is electronic payment method that lets you pay your premiums with automatic deductions from your checking account.

Discount
A reduction in your premium if you or your car meet certain conditions that reduce the insurer’s losses or expenses. For example, auto insurance discounts are given for cars with auto theft devices and for drivers and passengers who use seatbelts.

Driver Training Discount
A discount for people who have taken an approved driver training course. This discount is not available in all states or for all individuals.

Emergency Road Service Coverage
Protection for problems that are not typically handled by your auto insurance such as:
being locked out of your car,
having a dead battery re-charged,
inflating a flat tire, or
filling an empty gas tank.
Endorsement
Any change made to the policy.

Estimate
The initial assessment of the cost to repair your damaged property.

Exclusion
Restriction in your insurance policy that denies coverage for certain perils, persons, property, or locations.

Expiration Date
This date, found on your declarations page, indicates when your policy coverage runs out. Your renewal policy will start on this date.

Field Adjuster
An insurance adjuster who works primarily outside of an office and often meets personally with the public. Field adjusters can conduct face-to-face meetings, negotiations with claimants, scene investigations, and damage inspections.

Financed Car
An auto purchase financed by a loan. The lender retains a lien on the auto until it has been paid off.

First Party
There are two parties to the policy contract: the insured and the insurance company. This term refers to the insured.

First Party Claims
A claim for damage, loss or injury made by an insured.

Forms
Two types of forms are important in insurance: 1. preprinted contracts that form your insurance policy, 2. questionnaires or coverage selection forms that a policyholder is required to fill out.

Good Student Discount
May be awarded to full-time students who maintain a grade average of "B" or better.

Hazard
Anything that increases the chance of an accident occurring.

Homeowners Insurance
Insurance that protects the homeowners from losses to the insured’s personal property and any damages for which the homeowner is liable.

Indemnity
Replacement, repair or payment of value for a loss. This is meant to return the insured, or person to be indemnified, to the condition which existed before the loss.

Indemnification
A principle of insurance which states that the individual should be restored to the approximate financial position prior to the loss.

Independent Adjuster
An individual that provides estimates of losses on behalf of insurance companies, but is not an employee of the aforementioned companies. This person is paid a fee for each adjustment, as opposed to a company adjuster, who is directly employed by an insurance company.

Inspection
In some instances, policyholders will be asked to have their auto inspected. This inspection is not a safety inspection but is intended to reduce insurance fraud by verifying the condition of the auto and making sure that the auto exists.

Insurable Interest
Relationship of condition, such that loss or destruction of life or property would cause a financial loss. In the case of property insurance, such interest must exist at the time of the loss.

Insurance
Insurance is a system in which groups of people who have similar chances of suffering a loss transfer their risk of loss to an insurer who pools the risk of many people together. In exchange for payment of premium, the insurer promises to reimburse the person for their covered losses.

Insurance Fraud
A variety of crimes that range from staging accidents, inflating medical bills, to falsifying an application for insurance.

Insurance ID Card
A card issued by your insurer containing basic information about your insurance policy. Some states require you to keep an ID card in your vehicle.

Insurance Score
Used in the underwriting process in some states. An individual’s insurance score is based, in part, on a person’s credit history.

Insured
A person or organization covered by an insurance policy.

Insurer
An organization that provides insurance.

Legal Liability
Liability imposed by law, as opposed to liability arising from an agreement or contract.

Leased Car
An auto rented under a long-term contract (lease). The leasing company retains ownership of the auto and must be shown on your insurance policy.

Liability
Any legally enforceable obligation or responsibility for the injury or damage suffered by another person.

Lien
A claim, charge, or encumbrance on property as a security for the payment of a debt.

Lienholder
The person or organization that loaned the money to purchase the vehicle. The lienholder has a financial interest in the car up to the amount of money borrowed or still owed.

Limits
The maximum amount of protection purchased by the insured on each separate coverage.

Limits of Liability
The amount specified in your policy up to which the insurance company will protect you.

Loss
Any damages to the auto, including equipment, or other insured property. Any measurable dollar cost of damage and/or injury suffered by a person.

Loss of Use
Rental expenses paid to claimants.

Malicious Mischief
Intentional damage of personal property with malice of forethought.

Maps and More
A companion product available to policyholders that provides travel club services such as: Trip Routing Services, Discounts on Hotel and Car Rentals, No-Fee Traveler’s Checks, and more.

Material Damage
All damage losses covered by the policy. This includes the following: property damage (PD), comprehensive damage (COMP), collision damage (COLL), Fire/Theft Combined Additional Coverage (FTCA), rental reimbursement (RR), or uninsured motorist property damage (UM).

Mechanical Breakdown Insurance
Covers repairs to all mechanical parts of the car, protecting you from expensive repair bills.

Medical Payments
Pays medical expenses (and in some cases lost wages) of the driver and passengers in your car.

Misrepresentation
To make written or verbal statements that are untrue or misleading. Misrepresentation may be made either by a person seeking insurance coverage when describing the risk, or on the part of an insurer or agent regarding the contract policy terms.

Motor Vehicle Report (MVR)
A report from the agency that issues your driver’s license, listing accidents and violations that appear on your driving record. This report is used to verify information provided by insurance applicants and policyholders.

Motorcycle Safety Foundation (MSF)
A national, nonprofit organization. Some applicants who complete MSF courses qualify for discounts on Cycle-Gard motorcycle insurance.

Multi-Car Discount
Available to policyholders who insure more than one vehicle at the same location.

Named Insured
The person designated in the policy as the insured, as opposed to someone who may have an interest in a policy but is not specifically named. Usually includes a spouse, if a resident of the same household.

Negligence
The failure to exercise reasonable care. It is equivalent to carelessness or lack of proper care. This is the basis of legal liability.

No-fault
An insurance system where your own insurance pays for your injuries regardless of who caused the accident.

Non-Renewal
When an insurer decides not to renew a policy at the end of its policy period.

Occurrence
Occurrence coverage may be defined as an event, or repeated exposure to conditions, which unexpectedly causes injury during the policy period. This type of coverage differs from coverage on an "accident" basis if the "occurrence" connotes gradual or accumulative damage without regard to exact time or place, whereas "accident" refers to instantaneous damage, identifiable as to time and place.

Original Equipment Manufacturer Parts
Auto parts obtained from the original manufacturer of the car or the supplier of the original part.

Overseas Insurance
Auto and Property Insurance for those living abroad is available from American International Underwriters through subsidiary, International Insurance Underwriters.

Passive Restraint System
A passenger safety system incorporated into the vehicle. An example would be air bags.

Payment Plans
Your auto insurance premium can be paid using one of our installment payment plans; you make several smaller payments but incur a service fee.

Peril
A danger or hazard that can cause a loss, for example, a car collision with an object, or a fire.

Personal Injury Protection
Pays medical expenses (and in some cases lost wages) of the driver and passengers in your car.

Personal Property
Property that is not land or connected to land (real estate), such as furniture or jewelry.

Physical Damage
The four coverages protecting the policyholder’s vehicle: Comprehensive; Collision; ERS; and FTCA.

Policy
A contract between you and the insurance company.

Policy Change
Any change made to your insurance policy during the period that the policy is in force.

Policyholder
The person who took out the insurance policy and is named in the policy declarations.

Policyholder Service Center
Refers to allstate.com’s online system for managing your car insurance policy online, also known as mypolicy.allstate.com

Premium
The price of the insurance policy that the insured pays in exchange for insurance coverage.

Proof of Loss
A statement made by the insured regarding the extent of the claim, in accordance with the conditions of the policy.

Property Damage liability Coverage
Pays when you are legally liable for damage to the property of others caused by your auto. This coverage pays for property damage up to the dollar amount you selected plus the cost of any legal expenses.

Proximate Cause
That which in a natural and continuous sequence, unbroken by any intervening cause, produces the injury and without which the accident would not have occurred.

Quote
A statement of the premium that will be charged for insurance coverages based on specific information provided by the person requesting the quote including drivers, vehicles, and driving record.

Rate
Often used as a synonym for premium but actually refers to the base rating units that are used to determine the final premium.

Rating Plan
The rules that determine the cost of your insurance premium. These rules modify the base rates by applying discounts and surcharges based on your personal characteristics, for example, using your seat belt, insuring more than one car.

Reinspection
A review of an estimate or appraisal done by an adjuster during or after repairs to a vehicle. This is done to guarantee the accuracy of staff or independent auto damage personnel, and to guarantee that the work required in an estimate or appraisal is being completed by the body shop.

Release
Written acknowledgment stating that all obligations past, present, or future, arising from a particular accident or occurrence, have been fulfilled.

Renewal Date
The date that your insurance policy expires and the date that your renewed policy will begin.

Renters insurance
Insurance that provides protection from losses that arise out of the rental of a home. Protection covers losses to the insured’s property, not to losses that occur as a result of owning a home.

Replacement Parts
Several types of parts may be used when your vehicle is repaired: new parts, both original equipment manufacturer and after-market; and recycled parts. New or after-market parts will be used if we can't find like-kind and quality recycled parts. A 5-year-old car, for instance, would be repaired with parts at least as good as the parts that had been in the car. We guarantee the after-market parts used for these repairs for as long as you own the car.

Resident Adjuster
Staff adjuster who handles claims in remote areas of a region.

Rider
In motorcycle insurance, a rider is someone who will operate the insured motorcycle.

Risk
The chance of suffering a loss.

Salvage
When a vehicle has been damaged to a point where repairs would be uneconomical, the sum of the damaged vehicle’s parts is called "salvage."

Select Repair Shop
Body shops chosen by that are authorized to handle the repair of insured vehicles without the need for an inspection by a staff adjuster. Vehicle owners always have the right to choose the body shop of their choice.

Self-Insured Retention
In umbrella insurance, self-insured retention is similar to a deductible in other types of insurance. The self-insured retention is the amount of damages for which the policyholder is responsible before the umbrella coverage begins to cover a loss.

Special Investigation Units
helps fight fraud through its special investigation unit, staffed with experts in fraud detection and investigation.

Staff Adjuster
Individual who is employed by .

Subrogation
If your car is damaged because of another driver’s negligence and you ask to settle the claim for damage to your car, we will seek payment recovery (including your deductible) from the other party. This process of payment recovery is called subrogation.

Sunny Day Riding Program
Cycle-Gard’s Sunny Day Riding Program gives riders who don't normally use their cycle in the winter a credit on their premiums, but it covers the rider and cycle year round.

Supplement/Supplemental Estimate
Used to cover missed, overlooked, or hidden damages not included in the original estimate.

Theft
The unlawful taking of the property of another with the intent to permanently deprive the owner of its use or possession.

Third Party
Any liability claimant.

Third Party Claim
Claims for injury or damage to property of a third party alleged to have been caused by the insured.

Tort
A wrongful act or omission, arising in the course of social relationships, other than contracts, which violates a person’s legally protected right, and for which the law provides a remedy in the form of an action for damages. Negligent torts are those which arise as a result of the failure to meet the duty to exercise care for the safety of the person or property of others.

Tortfeasor
A tortfeasor is one who commits a personal wrong. It deals with negligence in the insurance world. A tortfeasor would be the one found negligent in an accident.

Total Loss
Property damaged to the extent that the cost of repairs exceeds the market value less the salvage value.

Towing and Labor Coverage
Provides insurance if your auto needs to be towed or requires roadside assistance.

Umbrella Insurance
Provides high limits of additional liability coverage above the limits of your homeowners and auto policy. In addition, it provides coverage that may be excluded by other liability policies.

Underwriting
The process an insurer goes through to determine whether or not it will provide coverage for an applicant.

Uninsured Motorist Coverage
Pays for your injuries and, in some circumstances, certain property damage caused by an uninsured or a hit-and-run driver. In some cases it also includes coverage for underinsured motorists and at-fault drivers with insufficient insurance to pay your claim.

Vandalism
Willful or malicious destruction or defacement of public or private property.

Vehicle Identification Number (VIN)
A 17-digit number assigned to each vehicle manufactured in the United States after 1980. This number is used for identification purposes and is visible on the dashboard when viewed from the outside of the vehicle.

Warranty
A written guarantee of the integrity of a product and of the manufacturer’s responsibility for the repair or replacement of defective parts.