Insurance Terms

Accelerated Benefits - This provides a one-time accelerated payment of a life insurance policy death benefit.

Accident Forgiveness - A feature of an auto insurance policy that protects your premium from increasing for an at-fault accident.

Accidental Death Benefits Coverage - This coverage pays if death occurs to you and/or your family members due to bodily injury caused by a covered automobile accident if the death occurs within 60 days of the accident.

Actual Cash Value - Loss settlement which pays for repair or replacement of damaged property with a reduction for depreciation

Additional Insured - A person or organization that is provided insured status under another parties’ insurance policy

Additional Insured Lessor Coverage - Automobiles owned by another party but leased to an insured on a long-term basis are treated as an owned vehicle. This coverage provides liability coverage to the lessor as an additional insured.

Additional Living Expense - Additional living expense or “extra expense” covers the additional costs of living incurred by you should you be temporarily displaced from your home due to a covered loss.

Amendment - Provision added to an original insurance policy that alters or modifies benefits and coverages.

Anti-lock Braking System (ABS) - A safety anti-skid braking system which operates by preventing the wheels from locking up during braking so contact is maintained with the road surface.

Anti-theft device - Any device used to prevent or deter theft of a movable item.

Application - A form on which a prospective insured provides information necessary for the insurer to underwrite the risk.

Appraisal - A form on which a prospective insured provides information necessary for the insurer to underwrite the risk.

Arbitration - A means to resolve disputes outside of the courts using an impartial third party.

At-Fault - Situation where a person is determined to have caused, or is responsible for, an accident.

Auto Loan/Lease Coverage - This provides coverage for the difference between the outstanding indebtedness on a loan/lease agreement and the actual cash value (not to exceed 20%) of the vehicle. This coverage is ideal for individuals who have a loan amount that’s higher than the value of their vehicle.

Beneficiary - Recipient of policy proceeds in the event the insured passes away.

Big Dog Bundle - This bundle provides discounts when customers combine any two different lines of insurance. An auto and renters combo gives customers up to a four percent discount on auto and renters policies. An auto and life combo gives customers up to a four percent discount on auto policies, and a renters and life combo gives customers up to a four percent discount on renters policies.

Binder - A legal agreement issued by an insurer to provide temporary insurance coverage until a policy can be issued.

Bodily Injury Liability Coverage - This coverage protects you if you are legally responsible for accidentally injuring someone. (Because we know you would never purposely injure anyone.)

Auto Bodily Injury/Property Damage Liability Coverage - physical injury to a person/direct damage to another person’s property for which you are found to be legally liable.

Cancellation - Termination of the insurance policy.

Carrier - Company licensed to sell insurance policies.

Cash value - An amount of redeemable proceeds that the policy can provide to the insured, or policy owner, if the policy is surrendered before the insured passes away. This is most common with whole life policies.

Certificate of Insurance - Document showing proof of insurance to a third party, such as a landlord or property manager.

Claim - A request stating that a loss has occurred and the insurance company should provide coverage.

Claimant - The party making a claim under an insurance policy.

Claims Forgiveness Discount - A feature of a home or renters policy that protects your premium from increasing due to claims.

CLUE Report - The Comprehensive Loss Underwriting Exchange or CLUE report contains a history of claims and the individual owner’s record of filed claims. Insurance providers use this information to set premiums, determine coverage levels, or in some cases, choose not to insure the individual.

Collision - Damages resulting from your vehicle’s impact with another vehicle or object.

Collision Coverage - This pays for accidental damage to your auto due to collision or upset, regardless of who is at fault, subject to the deductible.

Comprehensive Coverage - See Other Than Collision

Conditions - Requirements that need to be met for coverage to be valid.

Continuous Coverage - Having insurance coverage without any lapses or periods without insurance coverage.

Damage - Physical harm caused to something in such a way as to impair its value, usefulness or normal function.

Damages - Monetary compensation one party must pay to another party.

Declaration Page - A document that is part of an insurance policy and provides important basic information about your insurance policy. It includes things like the name and address of both the insured and the insurance company, the policy number, policy effective dates, what coverages you have, your deductible amounts and your premium amount. The document may also include information on specific autos, dwellings or other property insured and any discounts you are currently receiving.

Deductible - The amount that is the responsibility of the policy holder before an insurance provider will pay any claim expenses.

Depreciation - The decrease in the value of property over time, usually as a result of age or wear and tear from use.

Disability Income Coverage - Provides payments if disability occurs due to the bodily injury caused by a covered automobile accident.

Drive Other Car Coverage - This extends liability and medical payments coverage to a designated driver while operating a business, company or government-owned auto.

Effective Date - Specific date that an insurance policy goes into effect and coverage becomes active.

Emergency Road Service Coverage - This pays for reasonable expenses for towing, mechanical labor done at the place of breakdown, delivery of gas, oil, loaned battery or change of tire, and locksmith services. This is included at no extra charge for Top Dog Bundlers, but those with only a Clever auto policy can add it as an additional coverage.

Endorsement - Change to an insurance policy that adjusts coverage.

Estimate - A statement of the approximate cost of work to be done.

Exclusion - Provision of an insurance policy referring to hazards, perils, circumstances or property not covered by the policy.

Expiration Date - The date insurance coverage ends.

Extra Expense - Also known as loss of use or temporary living expenses, this coverage is all about helping out. Extra expense coverage assists with necessary increased living expenses when an insured dwelling is uninhabitable as a result of damage by a covered cause of loss. Clever covers you automatically at up to 20% of your dwelling’s value.

First Party - The insured individual.

First Party Claim - A claim filed with an insured’s own insurance company.

Gap Insurance - A type of auto insurance to cover the difference between what a vehicle is currently worth (what you will receive if there is a total loss) and the amount you actually owe on it.

Garaging Location - Where your insured vehicle is parked most of the time. This is usually indicated by the zip code of the policyholder’s primary residence.

Good Student Discount - Available to unmarried drivers 16 – 25 years old. Must be a full time student (as least 12 credit hours) and have a cumulative semester GPA of 3.0 on a 4.0 scale or 8.0 on a 12.0 scale.

Guaranteed Purchase Option - A life insurance add-on that grants the insured options to purchase new, additional life insurance, without any additional medical questions or exams, on the policy at specific times throughout life.

Increased Coverage for Theft of Credit Cards - This increases the amount of coverage for theft of credit cards and debit cards.

Increased Limits for Property Away From Premises Coverage - This increases the amount of coverage for personal property away from the insured premise (like your stuff in your car, not in your house).

Identity Theft Expense Coverage and Resolution Service - Advocacy service and identity theft expense reimbursement provided if your identity is stolen.

Inspection - A careful examination of property to identify possible hazards or condition which may increase the chance of a loss.

Insurable Interest - A legal interest in the value of the subject of insurance by the insured person.

Insurance - A contract by which a company provides a guarantee of compensation for specified loss, damage, illness or death in return for payment of a premium.

Insurance Contract - Document representing the agreement between and insurance company and the insured.

Insurance Fraud - Any deception performed with the intent to obtain an improper payment from an insurer.

Insured - Person who is covered under an insurance policy.

Insurer - Company providing insurance coverage.

Lapse - When you go a period of time with no insurance.

Level Term insurance - Life insurance that provides the same amount of coverage over a set period of time or to a certain age.

Liability Coverage - This coverage protects you against damages arising from an accident that results in the bodily injury or property damage to others, for which you are held liable. It also includes covering court costs and the cost of defending yourself for covered claims.

Lienholder - A lender that legally has an interest in your property until you pay it off in full.

Limits of Liability - The maximum amount for which an insurance company may be held liable under a given policy.

Loss Assessment Coverage - This is an optional coverage that may be needed by condominium owners. Condo associations often include common areas which are shared by all unit owners, maybe a pool area, rec room or courtyard. The insurance policies that the condo association carries for these common areas typically have large deductibles. Therefore, if these common areas are damaged and suffer an insurance loss, the condo association may assess your share of their deductible back to you. But no worries, this Clever option has you covered. Loss assessment coverage pays for your share of the condo association deductible that is assessed to you due to loss to a common area caused by a covered peril.

Loss - Any injury or damage that the insured suffers because of a covered accident or misfortune.

Loss History - A history of damages or losses connected with a given asset.

Loss of Use - See Extra Expense

Market Value - The price an insured asset, in its current state, would be able to command in a competitive market setting from a willing buyer.

Medical Payments Coverage - For auto insurance, this coverage provides payment for reasonable medical expenses to you and your passengers who may be injured in the insured vehicle, regardless of fault on the part of the insured.

For renters insurance, this coverage provides payments for reasonable medical expenses to others who may be injured while in your home. In both cases, the limit of insurance stated is per person.

Medical Payments to Others - This coverage provides payments for medical, surgical, dental, ambulance and hospital expenses to those injured on your property as a result of an accident.

Misrepresentation - A false or misleading statement. If intentional and material, this can allow the insurer to void the insurance contract.

Mitigation - The principle that a party who has suffered loss must take reasonable action to ensure that no further loss is suffered.

Motor Vehicle Report (MVR) - A record held by the state containing licensing status, violations, suspensions and other infractions a driver has had over the last several years.

Named Insured - The listed owner of a policy.

Negligence - Failure to act in a way that a reasonable person would when faced with the same situation and circumstances.

Non-renewal - Decision made by an insured or insurance company to not continue coverage for another policy period after the current policy period expires.

Occurrence - An accident, including continuous or repeated exposure to substantially the same general harmful conditions. An occurrence includes a single event and any harm that is repeated on continues as a result of that event.

Other Than Collision Coverage - This pays for accidental loss or damage to your auto due to natural disasters, civil commotion, vandalism, falling objects, contact with a bird or animal, glass breakage, fire and theft, subject to the deductible.

Perils - Perils refer to hazards and events that are a source of loss or damage. If a peril is “insured” it means it is covered. If a peril is excluded, then you would not have coverage for it. Perils covered by your insurance vary between insurance companies and policy types. Feel free to reach out to a Clever expert for specifics on your policy.

Personal Injury Coverage - rovides coverage if you are accused of one of the following: false arrest, detention or imprisonment, malicious prosecution, libel, slander, defamation of character, wrongful entry or eviction.

Personal Liability - Provides coverage for bodily injury and/or property damage claims arising from you, your activities, or your insured premise.

Personal Property - Simply put, your stuff. From the tools in your garage to the furniture and electronics in your home.

Pet Injury Coverage - This coverage provides up to $1000 to reimburse you for veterinarian fees if your dog or cat is injured while riding with you in a collision.

Physical Damage - Any tangible damage to property that materially adversely affects the use, marketability or value of the property.

Policy - A document detailing the terms and conditions of a contract of insurance.

Policy Change - See “Endorsement”.

Policyholder - The person or entity who owns the insurance policy and has the privilege to exercise the rights stated in the contract.

Policy Period - The term of duration of the policy. The time between the policy inception and expiration.

Premium - “premium” is really a fancy word for cost.

Primary Beneficiary - Receives all the proceeds from a life insurance policy when the covered person passes away.

Primary/Principal Driver - The main driver of the vehicle being insured. The driver who uses the vehicle most often.

Proof of Loss - An official, notarized, sworn statement from the insured to the insurer concerning the scope of damage to their property.

Property Damage Liability - Direct damage to another person’s property for which you are found to be legally liable.

Quote - An estimate of cost (premium) for the insurance coverage you select.

Reducing Deductible Coverage - This coverage reduces your Collision and Other Than Collision deductibles as long as no claims over $250 have been paid by Clever during the 12 –month period following the date the reducing deductible coverage was added. With this option, your deductibles reduce by $100 for each annual loss-free period.

Reinstatement - Allows a previously terminated policy to resume effective coverage.

Release - A settlement between two parties that prevents one of the parties from further pursuing claims or action against the other party.

Renewal Date - Date on which a policy must be renewed for coverage to remain in effect.

Rental Reimbursement - Optional coverage that helps you pay for transportation expenses, such as the cost of rental car, while your vehicle is being repaired after a covered insurance claim.

Replacement Cost - Loss settlement which pays for repair or replacement of damaged property with no reduction for depreciation.

Roadside Assistance - Services that can help when a vehicle suffers a mechanical failure that leaves the operator stranded.

Scheduled Personal Property - Provides coverage on an item-specific-basis for personal property that may be subject to inadequate limits within the policy, for example: engagement ring or computer.

Secondary Beneficiary - The recipient of policy proceeds in the event the insured passes away, when the beneficiary (primary beneficiary) has preceded the insured in passing away.

Split Wind/Hail Deductible - A split wind/hail deductible means that you have a different deductible for covered wind and hail losses than for all other covered losses.

SR-22 - A form that states require a high-risk driver to file to prove that he or she has auto insurance.

Subrogation - The process by which an insurance company collects money from the party at fault, or their insurance company, in order to recover funds they have paid out on a claim.

Surcharge - A fee added to a person’s car insurance premium after a traffic violation or an accident in which that driver was as fault.

Term life insurance - Term life insurance provides death protection for a stated time period, or term.

Third party claim - A claim made by someone who is not the policyholder or insurance company.

Title - A document that shows legal ownership to a property or asset.

Top Dog Bundle - This bundle provides the best discounts for the most product lines. When customers combine at least one auto, renters, and life policy, they receive up to an eight percent discount on all renters and auto policies plus free coverages like pet medpay, emergency road service, and windshield chip repair.

Transportation/Travel Expense Coverage - Optional coverage paying for temporary transportation, meals, lodging and loss of use expenses in the event a loss renders a covered vehicle unsafe to drive.

Underinsured Motorist Vehicle Coverage - This applies when a negligent driver has liability insurance but the limits carried are less than the limits provided under the underinsured motor vehicle coverage.

Underwriting - The process of determining whether to accept a risk and, if so, what amount of insurance the company will write on the acceptable risk, and at what rate.

Uninsured Motorist Coverage - Provides payment to you or your passengers for bodily injury caused by a negligent motorist who does not have insurance to cover the injuries they caused.

Uninsured Motorist Property Damage - Covers damage to your car caused by an uninsured motor vehicle.

Vehicle Identification Number (VIN) - 17 characters located on a small metal plate where the dashboard meets the windshield in front of the driver.

Waiver of Premium - An agreement that provides for the waiver of premiums (we pay the premiums for you) while the insured is totally or permanently disabled.

Whole life insurance - Whole life provides life insurance protection for as long as the policy is kept in force.