Many of us have difficulties understanding the different legal terminologies we hear or read in certain important documents. This is especially true when it comes to reading our California car insurance policies. Although those terminologies can be complex and hard to determine exactly what they mean, we have listed the most common ones here to help you increase your vocabulary.
Additional insured – when your vehicle is “co-titled”, meaning there is another owner listed on the document, they are called the additional insured. This protects their investment in the vehicle and protects them from any liabilities that may arise.
Declaration page – this page normally contains all of your policy information and is laid out in a simple-to-read-and-understand format. It usually contains your, coverage, loss payee information, name and address, and vehicle information just to name a few items. You can obtain your declaration page from your insurance agent or company. However, this page is usually included in your renewal package that is mailed out to you.
Driver risk – the likelihood of you filing a claim helps to determine this factor. There are 3 types of driver risk including high, preferred, and standard risk.
EFT or electronic funds transfer – as the name implies, this is the transference of money from your bank account to your insurance provider when you are paying your premium. Most California car insurance companies prefer this method of paying because it guarantees the payment of your premium. As an incentive to sign up for an EFT payment, your insurance company may offer a discount on your premium and no payment fees.
Financial stability – sometimes referred to as your insurance credit score. This is one of the factors that are used to calculate your premium rate. Their theory behind this contends that the lower your credit score is, the more likely you will be to file a claim.
Gap insurance – this covers the difference (or gap) between what the vehicle is worth and what you actually owe on it. This benefits individuals who are “upside down” on your vehicle loan. When a vehicle is totaled, the loss payee is paid back in full for the loan.
High-risk – this terminology is used to refer to types of drivers and insurance. It follows then that high-risk drivers need high-risk insurance. High risk drivers include those individuals that are bad drivers, drivers who typically let their insurance policies lapse, and young drivers.
Independent agents – these individuals typically go through multiple California car insurance companies and are not affiliated with any one provider. This gives you additional options where purchasing car insurance is concerned and oftentimes enables you to save money by comparing several companies.
Insurance renewal – this is the date or point in time when your California car insurance provider re-evaluates your current premium rate. You may see your rate decrease or increase depending on your driving record during the insured period. For instance if you have received a ticket for a moving violation, your rate will most likely increase.
Loss payee – this is a separate entity such as the bank or other lending institution that financed your vehicle. In order to be reimbursed for the funds they loaned you, the loss payee is listed on your policy and included in the claims process.
Named insured – this is the individual that owns the insurance policy and is usually the only one who can affect changes on it. The named insured should appear on the vehicle’s title. However, some companies will make exceptions to this.
Non-owner policy – this type of California Car Insurance policy protects those drivers who do not own the vehicle they are driving. If you have a lapse in coverage, this type of policy also protects you from being categorized as a high-risk driver.
Non-renewal – occurs when your insurance company can no longer carry you because of your driving record, you have made multiple claims, or you are relocating out of state.
Proof of insurance – you need to carry this with you in your vehicle at all times because it proves to whoever asks for it, that you have the minimum liability coverage required by California state law. It verifies the insured vehicle, the policy’s effective dates, your insurance carrier, your name and address, and your policy number.
We offer the Best Car Insurance Clovis. We invite you to contact for auto insurance service at our office at the address (1175 Shaw Avenue, Suite 102, Clovis,CA 93612, USA) and phone numbers (209) 492-7999). We guarantee your needs will be addressed, phone calls returned, and coverage issues responded to, and claim matters will be addressed “WITHIN ONE DAY!”
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