Glossary of Terms (Part 6)

SR-22 – A document required by the court for individuals convicted of certain types of traffic violations that shows proof of financial responsibility.

Third party – In an insurance contract, a third party is anyone other than the policyholder and the family members covered under the insurance policy. The policyholder is the first party. The insurance company is the second party in the contract. Anyone else is a third party.

Underinsured/Uninsured Motorist Coverage (UM) – It pays (up to the coverage limit) the insured person and other passengers in the vehicle when they’re injured as the result of an accident where the at-fault driver is uninsured, underinsured or a hit-and-run. In Colorado, for example, medical costs are picked up by your own medical benefits coverage (PIP), but if you have severe injuries that require long term additional care for pain and suffering, it’s unlikely that even if you take him to court that the uninsured driver who caused the accident will have any money to collect. This coverage is required to be offered in Colorado, but it’s up to the consumer if he or she wants to purchase it.

Source: autoinsuranceadvocate.net