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Frequently-Asked-Questions

What does “Actual Cash Value” mean?

Actual Cash Value refers to the value of your property, based on the current cost to replace it minus any deductions.

What are “Additional Coverages” for car insurance?

Additional (sometimes called ‘Supplemental’) insurance coverages are coverages that apply only in certain circumstances, have reduced or separate limits or liability, or require the insured to meet certain requirements before they are applicalbe.

What is an “Additional Insured”?

An Additional Insured is an Owner of a vehicle; (and generally not a financial institution) a person or an organization, other than the named insured or covered person, who is protected under the Named Insured’s auto policy.

What is an “Additional Interest” on an auto insurance policy?

An “Additional Interest” on a car insurance policy is an individual or company — in addition to the insured — listed on the declarations (e.g. a lien-holder who has an insurable interest in the property insured).

What is an Insurance Adjuster?

Insurance Adjusters are professionals who investigate insurance claims to determine if and how much the insurance company should pay for any damages and/or losses.

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What is a “Binder”?

An [Insurance] Binder is an oral or written statement that provides immediate insurance protection for a specified period; designed to provide temporary coverage until a policy is formally issued or denied.

What is a “Bodily Insured”?

“Bodily Insured” describes physical harm to others caused by the insured or anyone else covered on their policy.

What does cancelling an insurance policy mean?

Policy cancellations are the termination of an insurance policy by the company or insured before the policy’s renewal date.

What is a Carrier?

An insurance carrier is a company to which insurance payments are sent and who pays the insured when a covered claim is filed. L.A. Insurance is not an insurance carrier.

What is an Insurance Certificate (or Certificate of Insurance)?

An insurance certificate is a written document that verifies a policy has been written; provides a summary of the coverage provided under the policy. Most states require drivers to have both an active insurance policy and proof of insurance present in order to legally operate vehicles. Typically, when drivers are asked for Proof of Insurance, this is the document best suited to serve as that proof.

What is an Insurance Claim?

The reporting of theft, damage, or destruction of property, possessions, and dwellings which are covered by the insured’s policy.

What is a C.L.U.E. Report?

A C.L.U.E. Report is a report detailing a driver’s claim history. These reports are generated from The Comprehensive Loss Underwriting Exchange (C.L.U.E.). Underwriters use the information about drivers and their history in CLUE Reports to rate insurance policies.

What does Comparative Negligence mean?

“Comparative Negligence” refers to a partial legal defense that reduces the amount of damages a plantiff can recover in a negligence-based claim, based upon the degree to which the plaintiff’s own negligence contributed to injuries caused.

What is Comprehensive Coverage?

Frequently referred to as “Full Coverage”, Comprehensive Automotive Coverage is a broad physical damage coverage that covers all property losses except collision and those perils or property that are specifically excluded.

What is Condo Insurance?

Condo (HO6) Insurance, sometmies called ‘Condominium Insurance’, is a type of insurance policy that protects the insured, their belongings, and the unit (everything from the outermost walls inward).

What is “Contents Insurance”?

Contents Insurance refers to coverage for the insured’s belongings (e.g. bikes, laptops, TVs, etc.).

What is Co-Op Insurance?

Co-op Insurance refers to coverage protection for the insured, their belongings, and their dwelling; but not the rest of their building, facilities, or grounds in/on which the dwelling resides.

What is Insurance Coverage?

Insurance coverage is a financial tool designed to help the insured financially recover from sudden, unexpected, and accidental things that may happen.

What is the Date of Issue on an insurance policy?

The Date of Issue refers to the actual date a policy is created. The Date of Issue is not when the policy “kicks in” and becomes active (See Effective Date).

What is the Declaration(s) Page on an Insurance Policy?

The Declaration Page in your insurance policy is a document showing the insured’s coverage terms limits of , liability, covered automobiles, premium, and other policy-related information.

What is an Insurance Deductible?

The amount of money the insured must pay towards repairs before the insurance policy covers the remainder.

Who or What is DIFS?

DIFS stands for the Department of Insurance and Financial Services, the state regulatory body that governs the insurance industry in the state of Michigan. All insurance agents and agencies are required to maintain a current license with the Michigan Department of Insurance and Financial Services.

What does DRLP stand for/mean?

DRLP stands for “Designated Responsible Licensed Producer” and refers to the agent held responsible for improper or illegal activities engaged in by an agency or its’ agents. The DRLP can be thought of as the ‘Managing Agent’ for a given agency. The Michigan Department of Insurance and Financial Services require all insurance agencies to have a DRLP listed on their licenses in order to operate legally.

What is Dwelling Coverage?

Dwelling Coverage is the amount noted in a homeowner’s insurance policy that provides protection for the insured against damages (the home and everything attached to it, such as a garage, chimney, etc.)

What does “Earned Premium” mean?

The portion of a policy premium that has been used to actually purchase coverage, or that the insurance company has “earned”.

What is the Effective Date on an insurance policy?

The date on which the insurance policy goes into effect and the coverage is active. This is not the date the policy is signed (see Date of Issue)

What does EFT stand for/mean?

EFT stands for Electronic Funds Transfer. EFT is a payment method whereby a customer provides their bank account information and funds are typically auto-withdrawn when the billing cycle renews. EFT payments are typically more convienient than credit or debit card auto-payment programs as there are no expiration dates and customers do not need to worry about billing issues due to lost or stolen cards being deactivated.

What is an Endorsement on an insurance policy?

An endorsement may be used to add, delete, exclude, or otherwise alter coverage. Endorsements are amendments or additions to an existing insurance contract which changes the terms or scope of the original policy.

What is an “Excluded Driver”?

An Excluded Driver is someone intentionally removed from an automotive insurance policy. If the excluded driver drives the insured’s car, (with or without the insured’s permission) and has an accident, the insurance policy will not provide coverage.

What is an Exclusion?

An Exclusion refers to any loss or damage not covered by a given policy.

What is Fire Insurance?

Fire Insurance provides extra protection (in addition to what a policy would normally cover) in the event of losses or damages to a covered property due to fire and/or smoke.

What is the First Named Insured on an insurance policy?

The First Named Insured is the first person listed in a policy’s Declarations as an insured. The First Named Insured may have a higher level or duties or rights under the policy.

What does it mean to Flat Cancel an insurance policy?

A Flat Cancel refers to the cancellation of an insurance policy or bond as of its’ effective date; before the insurer has assumed liability. Flat cancellations require the return of paid premium dollars in full as if the insured had never actually been covered by the policy.

What is Flood Insurance?

Flood Insurance provides extra protection (in addition to what a policy would normally cover) in the event of losses or damages to covered property due to water damage and/or flooding.

What is Forced Protection Coverage?

Forced Protection Coverage is a type of insurance coverage generally provided as a means to protect a Financial Lending Partner for the value of the Auto Loan. Forced Protection Coverage is often less than the value of the vehicle but directly equivelant to the amount of the outstanding auto loan.

What is Full Coverage Insurance?

Full Coverage Insurance refers to insurance that has Personal Liability and Property Damage (PLPD) with Comprehensive and Collision coverage.

What is the Future Effective Date on an insurance policy?

Future Effective Dates are policy effective date which are in the future (rather than immediate). Future Effective Dates are typically used for discount purposes.

What is Gap Insurance?

Gap Insurance is insurance which pays the difference between the actual cash value of a vehicle and the amount still to be paid on the loan. Some Gap policies may also cover the amount of the deductible.

What is a Grace Period?

The Grace Period refers to the period of time after the premium payment due date during which the policy holder can make a premium payment without coverage lapsing due to non-payment.

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What is an IA?

IA stands for Independant Agent. Independant Agents are not professionally bound to a single carrier and can usually offer more coverage options than agents who are bound to a single carrier. L.A. Insurance agents are Independant Agents — Find an L.A. Insurance Agent Near You

What is the Inception Date on an insurance policy?

The Inception Date is the specific date an insurance policy goes into effect. Effective/Inception Dates let each party involved know when their responsibilities, duties, and/or benefits “kick in”.

What is an Installment Fee?

Installment fees are service fees that typically cover the cost of processing payments on a monthly basis. Paying the premium in full at the start of coverage can help the insured avoid paying these fees.

Who or What is “The Insured” on an insurance policy?

An “Insured” refers to a person (typically the policyholder) who is covered on an insurance policy.

Who or What is “The Insurer” on an insurance policy?

An “Insurer” refers to the company providing the Insured with financial coverage in the case of unexpected bad events covered on the policy.

What is Landlord Insurance?

Landlord Insurance policies cover property owners’ renting out their homes, condos, or apartments. Landlord Insurance does not cover the tenant’s property or belongings, which are insured by the tenant with Renter’s Insurance.

What does a Coverage Lapse mean for a car insurance policy?

A Coverage Lapse refers to any period in which a person does not have automotive insurance is considered a lapse of coverage. Auto insurance may cancel if the insured does not make a payment within the requisite time frame, resulting in a lapse of coverage. In some cases, a poliy can be reinstated without a lapse by making a payment and signing a Statement of No-Loss.

What is Liability Insurance?

Liability Insurance is a type of insurance that protects an insured from financial loss arising out of liability claims by transferring the burden of financial loss from the insured to the insurer.

What is “Loss of Use” coverage?

Loss of Use Coverage is a type of insurance coverage designed to assist with temporary living expenses if the insured’s apartment, condo, co-op, or house becomes uninhabitable due to a peril such as fire, mandatory evacuation, etc.

What does Market Value mean?

Market Value refers to the amount property could be sold for at the time of loss. Market Value may be used to determine the amount of reimbursement for a loss.

What is an MGA?

MGA stands for Managing General Agent. A Managing General Agent (MGA) or Managing General Underwriter (MGU) is a specialized type of insurance agent or broker that has been granted underwriting authority by an insurer, according to the International Risk Management Institute (IRMI), and can administer programs and negotiate contracts for an insurer. L.A. Insurance is not an MGA.

What is a Motor Vehicle Report (MVR)?

A Motor Vehicle Report can be thought of as background checks for a diver and their driving history. MVRs are one of the most important parts of the underwriting process.

Who or What is the Named Insured on an insurance policy?

The Named Insured on a car insurance policy is the owner of that policy.

What are Named Perils on an insurance policy?

Specific damages or losses listed in the insured’s policy — if any of these ruin something the insured owns (i.e. their personal property, the insured’s coverage “kicks in” and covers the losses according to the terms of the policy.

What is No-Fault Insurance (and why do I need it)?

Required by law in some states — including the State of Michigan — to operate a vehicle legally, No-Fault insurance pays for the insured’s medical expenses, wage loss benefits, replacement services, and the damage the insured does to other people’s property, regardless of which party is determined to be at-fault for the accident. Basic No-Fault insurance does not cover repairs to the insured’s vehicle.

What is a Non-Owner’s Policy?

A Non-Owner’s policy provides coverage that offers liability, uninsured motorist, and medical payments to a named insured who does not own a vehicle.

What is a Non-Renewal Decision?

A Non-Renewal Decision refers to the decision by an insurance company to not renew a policy (usually due to underwriting guidelines).

What is an NPN?

NPN stands for National Producer Number. National Producer Numbers are unique National Association of Insurance Commisioners (NAIC) identifier assigned through the licensing application process or the NAIC reporting systems to individuals and business entitites (including, but not limited to producers, adjusters, and navigators) engaged in insurance-related activities regulated by a state insurance department. NPNs are used to track those individuals and business entities on a national basis.

What is an NSF Fee?

NSF stands for Non-Sufficient Funds. NSF Fees are charged by a bank for any payment made by check, Electronic Funds Transfer (EFT), or remotely-created checks (RCCs) that a consuemr makes with insuffient funds. NSF Fees may also be charged by an Insurance Company for the returned item.

What is an Occurrance with regard to car insurance?

An Occurrance refers to any bodily injury or property damage that occurs while a policy is active.

What is an Occurrance with regard to car insurance?

An Occurrance refers to any bodily injury or property damage that occurs while a policy is active.

What does P&C stand for?

P&C stands for Property and Casualty.

What does PIF stand for?

PIF stands for Policy-In-Force.

What does PLPD stand for and what does it mean?

PLPD stands for Personal Liability and Property Damage. Personal Liability and Property Damage (PLPD) coverage refers to a type of basic insurance coverage that does not include comprehensive or collision coverages, but meets a state’s no-fault insurance guidelines. This is the minimum level of insurance required to operate a vehicle legally in states with No-Fault insurance laws on their books.

What does POGA stand for and what does it mean?

POGA stands for Proof of Garaging Address. This is proof that a vehicle covered by a policy is actually garaged (or stored) where the policyholder asserts it is.

What is a Non-Renewal Decision?

A Non-Renewal Decision refers to the decision by an insurance company to not renew a policy (usually due to underwriting guidelines).

Who or What is the Policyholder of an insurance policy?

The policyholder is the person who owns and is covered under a given policy.

What is a Policy Jacket?

Policy Jackets are documents used to assemble an insurance policy which contains general conditions of the declaration page, but provides no coverage in and of itself. A policy form must be attached to make it a complete policy.

What is the Premium of an insurance policy?

The Policy Premium refers to the amount the Named Insured pays the insurance company in exchange for insurance coverage. Once the Insured pays their premium, the Insurance Company will pay for teh coverage terms detailed on the Declaration Page, such as liability, comprehensive, and collision coverage.

What does Proof of Ownership mean on an insurance policy?

Proof of Ownership refers to the documents required to prove ownership of the property for which insurance coverage is sought. Acceptable Proof of Ownership documents include vehicle registration(s), title(s), RD-108, bill(s) of sale, Purchase Agreement(s), Deed(s), Property Tax Documents, among others).

What is Property Damage?

Property Damage refers to the damage to or destruction of property, including the loss of use of that property.

What is an Insurance Quote?

An insurance quote is an accurate estimate of how much a given insurance policy would cost.

What does “Real Property” mean?

Real Property describes land and any other structures attached to it (e.g. fences, garages, gardens, etc.) including any home on the land.

What does Reinstatement mean?

Reinstatements refer to maintaining continuous insurance with the same policy as an insured or policyholder had previously. When reinstating, the insured pays the past due balance and will be covered without any lapse.

What does Re-insurance mean?

Reinsurance refers to the acceptance by an insurer, in this case called a reinsurer, of all or part of the risk of loss of another insurer.

What does Renewal mean with regard to an insurance policy?

Renewals refer to the continuation of a set of terms and conditions under an existing policy. Policies typically renew every six (6) or twelve (12) months.

What does Replacement Cost refer to with regard to an insurance policy?

The Replacement Cost is the price an Insurance Company will pay for stolen or damaged property that is covered under a given policy. In automotive insurance, the Replacement Cost reflects the current fair market value of the same make, model, and year in a similar condition, not the value at which the vehicle was originally purchased.

What is a Schedule as it relates to insurance policies?”

A schedule is a list used to define various addons, exclusions, or clarifications in a policy such as extra coverage for personal property or protection against mold.

What is Self-Insurance?

Self-insurance refers to an alternative to purchasing insurance where a company or individual assumes the risk of paying for its’ losses and sets aside the necessary funds to pay for such losses. L.A. Insurance does not offer any self-insurance options.

What is an SR-22?

An SR-22 is a document often required by a state’s Department of Motor Vehicles (or similar regulatory body) proving that a driver is carrying the state’s required minimum amount of vehicle liability insurance.

What does Subrogation mean?

Subrogation refers to the process by which an insurance company steps in to get money back from a third party (or their insurer) who caused damages or losses to an insured’s covered property.

What are Supporting Documents for my insurance policy?

Supporting documents are documents required to purchase an insurance policy or to qualify for specific discounts provided by each carrier. Agents are expected to make and retain copies of these documents for their records.

What is a Surcharge?

Surcharges refer to any extra charges added to a premium by an insurance company. For automotive insurance, a surcharge is usually added if the insured has at-fault accidents on their driving record.

What is the Policy Term?

The Policy Term refers to the amount of time an insured or policyholder will be covered under a given insurance policy.

What does Theft refer to specifically on an insurance policy?

Theft is a peril an insurer covers.

What is Underwriting?

Underwriting refers to the process by which insurance companies evaluate and price risk and how they determine how much coverage a potential policyholder needs vs the likelihood they will claim. This information is synthesized and used to create a monthly premium.

What does Vandalism refer to on an insurance policy?

Vandalism refers to Intentional damage caused by someone else to the insured’s vehicle, dwelling, or property without the insured’s consent. Vandalism is considered a named peril and is [almost always] included in most policies.

What is a Vehicle Return Plan (VRP)?

Vehicle Return Plans refer to end-of-lease returns for vehicles as well as with non-payment or repossession arrangements.

What is a Vehicle Service Contract (VSC)?

Vehicle Service Contracts are Generally used by aftermarket vendors and suppliers in regard to service contracts or related protection contracts for care and maintenance.

What is a Waiver?

A Waiver is the intentional relinquishment of a known right. Waivers are almost always signed and in writing.

What is a Warranty?

A Warranty refers to a specific agreement between the insured and the insurer that becomes a part of the insurance policy; a breach of warranty can void the policy.

What is a Windstorm with regard to an insurance policy?

A windstorm is a named peril referring to damage to an insured’s property as the result of high winds.