Auto Owners Insurance Glossary
Per Occurrence Limit.
This refers to the cap amount an insurance company will pay for all claims arising from a single incident. In an automobile accident, it comprises bodily injuries sustained by all parties. When Bodily Injury coverage is purchased in split limits, the second limit is the "per occurrence" limit: e.g. $100,000(per person)/$300,000(per occurrence).
Per Person Limit.
This refers to the cap amount an insurance company will pay for any one person's injuries arising from a single incident. In an automobile accident, it comprises bodily injuries sustained by each person. When Bodily Injury is purchased in split limits, the first limit is the "per person" limit: e.g. $100,000(per person)/$300,000(per occurrence).
Personal Auto Policy.
The most common auto insurance policy sold today. Often referred to as "PAP," this policy is written in simple wording and provides coverage for liability, medical payments, uninsured/underinsured motorist coverage, and physical damage protection.
Personal Injury Protection.
The name usually given to no-fault benefits in states that have enacted mandatory or optional no-fault auto insurance laws. Personal Injury Protection (PIP) usually includes benefits for medical expenses, loss of income from work, essential services, accidental death, funeral expenses, and survivor benefits.
Physical Damage.
Damage to your covered vehicle from perils including (but not limited to) collision or upset with another vehicle object, fire, vandalism and theft.
Policy.
The written documents of a contract for insurance between the insurance company and the insured. Such documents include forms, endorsements, riders and attachments..
Policy Period.
The period of time in which a policy is in effect. (For example, six months or one year).
Policyholder.
One who maintains ownership in an insurance policy. This may refer to the policy owner or those covered under the policy. See also Named Insured.
Preferred Risk.
Any risk considered to be better than the standard risk on which the premium rate was calculated.
Premium.
The price of insurance an insured person pays for a specified risk for a specified period of time.
Private Passenger Automobile.
A four-wheeled motor vehicle that is subject to motor vehicle registration and used for private personal use.
Pro Rata Cancellation.
Termination of an insurance contract before the policy expiration date on which the premium returned to the insured person is adjusted in proportion to the amount of time the policy was in effect.
Property Damage Liability Insurance.
Protection against liability for damage to another's tangible property, including loss of use. Although this coverage is different than liability for bodily injury to another person, Bodily Injury and Property Damage Liability protection are generally written together.
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