Insurance Terms

Automobile insurance	Insurance which covers risks or hazards associated with the ownership or operation of a motor vehicle, including liability, collision, comprehensive and other coverages.

Bodily injury	Injury to a person, including death resulting from injury.

Cancellation	The revocation of an insurance policy during the term of the policy. In South Carolina, a policy can be canceled at any time within the first 90 days; thereafter, a policy can be canceled only (1) for failure to pay the premium or (2) for suspension or revocation of the driver's license of the named insured or any other operator who lives in the same household or who customarily operates a vehicle insured under the policy.

Comprehensive coverage	Insurance which covers property damage due to something other than collision, such as theft, fire, wind, hail, etc.

Deductible	The amount an insured will pay for a loss before the insurance company is required to pay for the remaining loss, up to the insured amount; for example, if an insured chooses a deductible of $500 and he has a loss of $1500, he will pay the first $500 of the loss.

Insurance	A system which allows an individual to transfer a risk of loss to a larger group which is better able to pay for the loss.

Insured	The person insured by an insurance policy, the named insured's spouse, relatives of the named insured or spouse if they live in the same household, any person who uses the insured motor vehicle with the consent of the named insured and any guest in the insured motor vehicle.

Insurer	The entity that insures another; the insurance company.

Joint underwriting association	A mechanism for insuring the residual market. This association provides insurance through the use of several companies who have agreed to service the business of the association. The rates are self-sustaining, meaning the policyholders premiums are calculated in such a way that the premiums should cover the losses and expenses of the insurance companies. If the premiums are not sufficient, all insurance companies selling automobile insurance in South Carolina must help pay for the excess losses and expenses.

Liability coverage	Insurance which covers bodily injury and property damage due to the fault of the insured.

Minimum liability limits	The amount of liability insurance coverage required by law, for example, in South Carolina, one must have coverage in the amount of $25,000 for bodily injury to one person, $50,000 for bodily insurance for more than one person, $25,000 for property damage (generally referred to as 25/50/25).

Nonrenewal	The refusal of an insurance company to renew a policy at the policy renewal date.

Policy term	The length of time the insurance policy is in effect (generally six months or one year).

Premium	The amount to be paid for an insurance policy.

Premium payment plan	A means provided to allow an insured to pay the premium in installments.

Residual market	The group of persons who are unable to purchase insurance from a insurance company through normal means.

Underinsured motorist coverage	Insurance which pays for bodily injury or property damage resulting from an accident caused by the driver of an insured vehicle which does not have sufficient limits of coverage to pay for the entire bodily injury or property damage.

Underwriting guidelines	The criteria used by an insurance company to determine whether to insure an applicant or what premium to charge an applicant.

Uninsured motor vehicle fee	The fee required by law to register an uninsured motor vehicle in South Carolina; the fee is not an insurance premium and is not purchasing insurance, it simply allows one to legally operate an uninsured vehicle in this State.

Uninsured motorist coverage	Insurance which pays for bodily injury or property damage resulting from an accident caused by the driver of an uninsured vehicle.

Uninsured motor fund	The fund established by the fees collected from the registration of uninsured vehicles. The purpose of the fund is to reduce the cost of uninsured motorist coverage and to provide funds for the South Carolina Department of Insurance to publish a buyer's guide and premium comparison brochure, to provide for a public awareness campaign and to enforce the anti-discrimination laws.

Voluntary market	The group of persons who are able to purchase insurance from a insurance company, with no help from the State.

SOUTH CAROLINA DEPARTMENT OF CONSUMER AFFAIRS

SOUTH CAROLINA DEPARTMENT OF
CONSUMER AFFAIRS