Accident Terms and Definitions

Binder
A temporary or preliminary agreement which provides coverage until a policy can be issued/delivered.

Deductible
The amount of the loss which the insured is responsible to pay before benefits from the insurance policy are payable.

Subrogation
The process in which an insurance company, after paying a loss to its insured, recovers the amount of the loss for damages (plus the insured's deductible) from the legally liable party.

Towing & Labor Coverage
Pays for towing charges when your car can’t be driven. Also pays labor charges, such as changing a flat tire, at the place where your car broke down.

Commission
That portion of the premium paid to the agent as compensation for his or her services.

Claim
Notice to an insurer of a loss that under the terms and conditions of a policy may be covered.

Surcharge
An extra charge applied to the premium by the insurer, usually for at fault accidents or moving violations.

Junk Title
A Junk Title is issued on a vehicle damaged to the extent that the cost of repairing the vehicle for safe operation exceeds its fair market value; or a vehicle that has been declared a total loss by an insurer or other state or jurisdiction.

Policy
Written contract of insurance.

Premium
The money paid for an insurance policy based upon the coverage provided.