Auto Insurance Terms (R – Z)
Rental Reimbursement Coverage: Rental reimbursement provides rental car expenses if you have a claim that is covered under comprehensive or collision coverage. Please note that there is always a daily limit on the rental amount covered.
Road service (Roadside Assistance coverage)If purchased, this optional auto insurance coverage will reimburse you for reasonable towing costs and labor costs at the site of breakdown when a covered vehicle is stalled.
Salvage Titles: A salvage title is a form of vehicle title branding, which notes that the vehicle has been severely damaged or deemed a total loss by an insurance company that paid a claim on it. Please note that there may be state specific guidelines on salvage titles.
Second Named Insured: A person designated by the Name insured (see above) to be listed on the policy and has the same coverage under the policy as the named insured.
SR-22: A document required by the court that demonstrates proof of financial responsibility for persons convicted of certain traffic violations.
Surcharge: A charge added to your auto policy premium after a traffic violation or an accident in which you were at fault.
Third-party Liability: Coverage provided by the insurance company to pay out liability claims against you. Liability pays for damages for which you are found liable. This includes property damage and injuries caused by your wrong actions. There may be minimum coverage for liability as specified by each state guideline.
Total Loss (write off): Total loss refers to the situation where the cost to repair the damage to your vehicle is higher than the present value of the vehicle. In that case, it is not financially worth doing the repairs and hence the insurance company declares the vehicle a total loss. You will then receive a payment for the determined value of the vehicle and the insurance company takes ownership of the vehicle.
Towing and Labor (TL): Same as the emergency road service or roadside assistance.
Underinsured motorist bodily injury coverage: Coverage that pays for your bodily injury and related medical expenses when you’re injured in an automobile accident and the responsible party (other than yourself) doesn’t have adequate auto insurance.
Uninsured/Underinsured Motorist Property Damage Coverage (UMPD): If driver or owner of a vehicle is legally liable for an accident but does not have insurance or does not have enough insurance, you can use UMPD to cover damage to your insured vehicle, up to the limits you select. In some states, UMPD is available as an alternative to Collision coverage.
Vehicle identification number (VIN): Your vehicle’s serial number assigned by the manufacturer. The VIN identifies year, make, model, options and other information that, by definition, is unique to your specific vehicle.
Work Loss or Basic economical loss: This optional coverage helps you and drivers listed on your policy (along with the occupants during accident) recover lost wages or salary if any of you are unable to work due to accident-related injuries.
Please note that a lot of the above definitions are further subject to changes from state to state. Please talk to your insurance agents (or even the current his reference clients) in case of any challenges that you might face in understanding the norms.