Glossary of Terms (Part 3)

Deductible – This is your out-of-pocket expense that you agree to pay for losses. The insurer agrees to pay for the amount of loss over the amount of the deductible. If you can afford to carry a higher deductible on collision and comprehensive coverage, you can substantially lower your costs.

Economic Benefits – Tangible, out-of-pocket expenses, such as medical expenses, rehabilitation expenses, lost wages and essential services.

Endorsement – An amendment to your policy written especially to cover unique items just for you. An endorsement is also a change to your policy that is made during the policy’s term. An endorsement is attached to your policy to modify the terms of the insurance contract.

Financial Responsibility Law - Typically this refers to the law that requires motorists to have auto insurance, however most states also permit a bond or cash deposit as evidence of the ability to pay for negligence in causing losses to others from the operation of a motor vehicle. In 47 states and the District of Columbia, it is illegal to operate a vehicle without obtaining proof of insurance.

Garaging Location – This is the zip code where an automobile is parked when not being used and usually corresponds to the primary residence of the insured. Used to determine premium rates.

Good Student Discount - This is a discount awarded to students with high scholastic achievement. Hired Automobile- This coverage applies to autos an insured leases, hires, rents, or borrows, but not to autos owned by employees or their families.

Source: autoinsuranceadvocate.net