Accident Terms and Definitions

Nonrenewal
The termination of an insurance policy at its normal expiration date.

Private Passenger Automobile
Four-wheeled motor vehicles of the private passenger, station wagon, or van type. Private passenger automobiles are designed for use on public highways and subject to motor vehicle registration.

Negligence
The absence of ordinary care.

Liability Insurance
Coverage for a policyholder's legal liability resulting from injuries to other persons or damage to their property.

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.

Misdemeanor
Criminal offenses less than felonies; generally those punishable by fine or imprisonment of less than 90 days in a local facility. A gross misdemeanor is a criminal offense for which an adult could be sent to jail for up to one year, pay a fine up to $5,000 or both.

Limits
The maximum amount of benefits the insurance company agrees to pay in the event of a loss.

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

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

Producer
A term applied to an agent, solicitor or other person who sells insurance.