Definitions written so you can actually understand them.

Absolute Liability
A commitment to pay for damages even if no one can prove the person paying is at fault. See also our fuller description of the many facets of liability under "Liability."

Accident
Just like it sounds. Something that happens that is unplanned, unexpected and definitely unintended.

Actual Cash Value (ACV)
This is what it would cost to replace or restore an item that was stolen or damaged at today’s prices, less depreciation. Say you bought a top-of-the-line vehicle 10 years ago for $30,000. That same car might cost you $45,000 today if it were new. But at the time your car was stolen or damaged, it wasn’t new; it was 10 years old. It was dinged up, the upholstery was stained, one of the windows stopped rolling down all the way, and the rear window defroster was iffy. Its value had depreciated over time. There are formulas for determining the fair value of depreciation, but let’s just say in the case of this 10 year old car it was $29,000. The ACV of your 10 year old car would be the cost of it new today ($45,000) less the depreciation ($29,000) for a total of $16,000.

Acquisition Costs
This is what it costs a company to get your business, above and beyond what it costs the company to serve you. For example, if you buy a hamburger, the cost of the meat, bun, cook’s salary and building are not acquisition costs. But the cost of hiring a guy to stand out on the corner in a clown suit to wave people over to the restaurant is. Likewise, the commissions car insurance companies pay to agents and brokers, including most Web quoting services (which are essentially electronic agents), are acquisition costs.

Additional Insured
A second (or third, or fourth) person insured by a policy written in your name. For example, your car insurance may also cover another driver driving your car.

Adhesion, Contract of
This is a contract that is written by one party and can only be accepted as is or rejected completely by another party. With contracts of adhesion, there’s no bargaining or negotiating, just a straight “yes” or “no.”

Adjuster
A person who comes out after a loss or accident, investigates what happened, calculates the loss, and determines the amount the auto insurance company should pay. See also “settlement.”

Adjusting
The Adjuster's job: Investigating the claim and settling the losses with an auto insurance company.

Adverse Selection
Described from the car insurance company’s point of view, this refers to the tendency of “less favorable insurance users” to seek or continue car insurance to a greater extend than others. The reasons for this are varied; some people truly have greater need, others have high-risk interests or lifestyles, while still others (hopefully a small minority) are looking to exploit loopholes in the system. Whatever the reason, these customers “select themselves” for this grouping by, for example, taking out more car insurance coverage than may seem needed by their profile.

Age Limits
Where these exist, they will exist in writing. Many policies have minimum and maximum age stipulations. This means the auto insurance company may not accept applications for coverage to beneficiaries above or below a specified age. It can also result in a company’s refusal to renew an existing policy if the policyholder has matured out of the age bracket established for that policy.

Agent
An auto insurance company representative licensed by the state who solicits, and produces contracts of car insurance for an insurance company.

Alien Insurer
This is an auto insurance company based in another country. It refers not only to insured travelers who come into the U.S. from abroad, but to U.S. citizens with U.S.-based car insurance who then travel out of the country.

All-risks Policy
Coverage by an auto insurance policy that promises to cover all losses with the exception only of those losses specifically excluded in the policy.

Amendment
This is a formal document that changes one or more provisions of an auto insurance policy. Since it is considered part of the policy from this point forward, it must be signed by both an insurance company officer and the policy holder (or his authorized representative) just as was the original policy.

Application
A signed statement of facts made by someone applying for car insurance which is then used by the car insurance company to decide whether or not to issue a policy.

Arbitration
Arbitration is increasingly showing up in contracts as an alternative to costly and time-consuming court actions. With arbitration, parties in a dispute take their case to an unbiased person or panel who then renders an opinion on the matter. In the case of auto insurance, arbitration might be used to determine who is responsible for a loss as well as how large that loss translates into dollar-wise.

Arson
This is the willful and malicious burning of, or attempt to burn, any structure or other property, often with criminal or fraudulent intent. For example, people have been known to set fire to their own houses in order to try to collect on their insurance policies.

Assets
All money, property, goods, securities, rights, or resources of any kind owned by someone or something – in this case an auto insurance company. Note that there’s one gray area: Statutory accounting (accounting regulated by law) excludes “non-admitted assets,” such as deferred or overdue premiums. However, these same “non-admitted assets” would be considered assets under the generally accepted accounting principles (GAAP) that guide the vast majority of accounting firms. All very interesting, but most people will never have any use for this information. Which brings us to our next point: If you are in a situation where an auto insurance company’s definition of its assets is important to you, you may want to think about hiring a lawyer.

Assignment
The legal transfer of one person's interest in an insurance policy to another person.

Automobile Insurance Plan
Formerly known as an "Assigned Risk Plan," an Automobile Insurance Plan is one of several types of "shared market" mechanisms designed to make sure everyone can get car insurance. Say you have someone who, for whatever reason, is turned down by everyone as he tries to get car insurance through the regular channels. With an Automobile Insurance Plan, he would be assigned to a particular company, and that company would have to take him on. Insurance premiums on these plans are usually higher.

Automobile Liability Insurance
This is the part of your policy that protects you against financial loss should you find yourself legal liability for any car-related injuries or damage caused to others or their property.

Automobile Physical Damage Insurance
This part of your policy covers the damage or loss of your car as a result of a collision, fire, theft, or what are called "other perils."

Benefit
This is the money your car insurance company pays you or your beneficiary in response to an auto insurance claim.

Beneficiary
An individual designated in a will to receive an inheritance or the proceeds of a retirement account, trust, or other asset. In the case of auto insurance, this is the person who receives the insurance company payout in the event that the policy-holder has died.

Bodily Injury Liability Coverage
Required in most states, Bodily Injury Liability Coverage protects you if you are held responsible for injuring someone in a car accident. It helps pay for the injured party's medical expenses and lost wages, and may also help pay your expenses if the injured party decides to sue. Commonly referred to as “BI”, this coverage is usually written together with Property Damage Liability.

Broadform Collision Coverage
Available only in the state of Michigan, Broadform Collision Coverage is comparable to standard collision coverage, but it also pays for damage to the policy-holder’s car no matter who is at fault. In addition, if the policy-holder is not at fault, a deductible is waived.

Business/Commercial Use
Your car would qualify for Business/Commercial Use if you mainly use your car for business purposes. For example sales calls, deliveries, client meetings and the like. Commuting to and from work is not considered business use.

Carrier

The auto insurance company that actually underwrites and issues your insurance policy is considered the Carrier in that it “carries” certain risks on your behalf.

Casualty
This refers to the liability or loss that results from an accident.

Claim
An auto insurance claim is a written request by the policyholder to be reimbursed by the insurance company for a covered loss. Most auto insurance companies have a standard form for submitting these claims.

Claimant
Anyone submitting a claim to an auto insurance company becomes a claimant.

Closed-End Lease
This is a type of auto lease that allows you to walk away from the lease at the end of the lease term without paying for any difference between the anticipated residual value and the actual value of the car.

Collision
Any event when a moving vehicle runs into another vehicle or a stationary object, such as a street sign. For the purpose of auto insurance, a single car roll-over may also be considered a collision.

Collision Coverage
This is the part of the auto insurance policy that covers damage to your vehicle should you be involved in a collision. The maximum amount your car insurance pays out for repair or replacement would be the car’s actual cash value, minus whatever deductible amount you chose when you purchased your policy.

Collision Deductible Waiver
While it’s illegal to drive without car insurance, those drivers are unfortunately out there. If you get hit by one of them, your uninsured motorist provision in your collision insurance will kick in to cover the damages. But only after your deductible has been satisfied, meaning you’re still out of pocket for the other guy’s negligent behavior. This is clearly unfair. That’s why ChoiceAutoInsurance.com offers collision deductible waivers on the policies quote in every state where they're available.

Collision deductible waivers aren’t available nation-wide, but in states where they're available they are generally purchased in conjunction with your collision coverage. Then, if you are involved in an accident with an uninsured motorist who is held legally responsible, your collision deductible is paid for. If you live in a major metropolitan area, or other locale with a hearty percentage of uninsured drivers, choosing a combination of a high deductible with the collision deductible waiver is a good way to save on your premium while avoiding undue exposure to risk.

Commuting
This phrase often appears in the auto insurance application where you are asked to state the “primary use” of your car. If you primarily use your car to drive to and from work or school, then you would choose “commuting.”

Comprehensive Coverage
This coverage goes beyond mere collision coverage by insuring you against damage to your vehicle caused by fire, theft, vandalism, explosion, windstorm, hail, falling objects, water or contact with an animal. If your car is leased or financed, you are usually required to have comprehensive coverage. As with collision coverage, the maximum amount your auto insurance pays out for repair or replacement would be the car’s actual cash value, minus whatever deductible amount you chose when you purchased your policy.

Continuously Insured
This term refers to the period of time you have been covered by one auto insurance policy or another without any lapse in coverage. So while you may have had 10 different policies with 10 different insurance companies over the course of 10 years, if there was never a lapse in coverage, you were continuously insured for 10 years. On the flip side, if you were faithfully with the same insurer for the past 25 years, but gave up your car insurance 6 months ago because you were sailing around the world and had no use for auto insurance, at the point of this new application you’ve been continuously insured for 0 years.

Coverage Forms
These are forms generally located at the back of the auto insurance policy that are to be filled out in order to complete the policy or to record changes to the items covered by the policy. In the case of auto insurance, a coverage form might document the owners and VIN numbers of the cars covered by the policy, where those cars are garaged, and what the primary use of each vehicle is.

Deductible
This is the amount of money a policyholder agrees to pay out of pocket in the event of a claim prior to the auto insurance carrier paying anything. The amount of the deductible varies from policy to policy and is set by the policyholder when the policy is first established. Policyholders who feel more uncertain about their ability to come up with ready cash in the event of an accident tend to set their deductibles lower. On the flip side, policyholders looking to save money on their auto insurance premiums tend to set their deductibles higher.

Declarations
Car insurance policies have a "declarations page" where facts about the policy are recorded. These facts are considered the policy's declarations. Generally declarations include: The policyholder's name and address, a description of the insured vehicles, the car insurance premium, the coverage amounts, the payment limits, and the deductibles.

Defensive Driver and Driver Improvement Courses
Driver education courses for students that already have a license. They typically consist of defensive driving training for drivers of all ages as well as "mature driver safety courses" intended for drivers age 55 and over. Drivers with troubled records or too many tickets can use these courses to reduce their points. In some states, car insurance carriers offer discounts to policyholders who have taken one of these safety courses. For this reason, ChoiceAutoInsurance.com includes a place on our application forms for you to claim credit for any defensive driving courses you might have taken recently. Saving you money is our mission.

Dental Insurance
An individual or group health plan that covers some or all of the costs of normal dental care as well as damage to teeth from an accident. These plans can be a bit pricey and leave many people who otherwise have health care plans choosing to forgo dental coverage. The Medical Payments section of a car insurance policy can be used to cover the dental insurance gap, if necessary, in the wake of an accident.

Dependent
Technically, this is an individual for whom a taxpayer provides at least 50 percent of the support regardless of where that individual lives. It is usually a child, sibling, spouse or parent, and this dependent most often lives with the taxpayer.

Deposit Premium
This is essentially a down payment on a policy made by the prospective policyholder at the time he or she is applying for the policy. Typically the deposit premium is equal to the first month’s estimated premium, and it shows up as a credit on the policy statement when the policy is approved and the first billing is issued.

Depreciation
From the moment they are first sold as new, durable goods, such as cars, steadily decline in value due to age, wear and tear, and technical obsolescence. Depreciation is a form of measuring that loss in value over time. If, for example, you bought a car when it was new and then had an accident in it when it was 3 years old, depreciation would be used to determine how much that 3 year old car was worth just prior to the accident. The claims adjusting would proceed from there.

Direct Response System
A method whereby insurance customers are able to find and purchase car insurance policies without going through an agent. The term also includes methods of marketing to customers by TV, radio, newspapers, magazines, and direct or electronic mail, where the final purchase of policies may or may not require the help of an agent. This Web site would be considered part of the Direct Response phenomena.

Disability
This is a broad term used to describe any physical or mental impairment that limits an individual in one or more of the major activities of life. A disability may be partial or total, but it does not necessarily disqualify someone from driving. More pertinent to car insurance is the fact that serious accidents can end up disabling of one or more of the people involved. Accident-related lawsuits often claim the plaintiff suffers disabiling injuries or pain stemming from the accident.

Discovery
Discovery is a legal process where the lawyers on one side of a dispute supply the lawyers on the other side of the dispute with documents and other relevant information prior to a legal proceeding. Courtroom surprises make for great TV, but they are not supposed to happen in real life. Parties who hold information back during the discovery process are actually breaking the law.

Discretionary Income
This is the amount of your income that’s left after your living essentials have been paid. Essentials would include food, housing, utilities, gas, medical expenses, and prior commitments, such as loans, credit card bills and income taxes. Most of us would say, “That sure doesn’t leave much.”

Dollar Threshold
Some states with no-fault auto insurance are using the Dollar Threshold to prevent individuals from blithely suing for pain and suffering anytime they are in an accident. Under the Dollar Threshold, unless the plaintiff’s medical expenses exceed a specified dollar amount, any claim of pain and suffering is thrown out. The dollar amount varies by state.

Domicile
This is the permanent residence of a given individual. It can be a house, town home, condo, apartment, mobile home, docked boat, room over the parents’ garage, you name it. But it must be that individual’s permanent residence until such time as that individual moves to a new permanent residence. A domicile cannot be a summer home, a P.O. box, or a temporary residence, such as a dorm, hotel or camp site.

Driver Education Credit
A discount some auto insurance carriers provide to young drivers upon their completing a driver education course. If you qualify for this credit, ChoiceAutoInsurance.com's application form will give you a place to claim so. We never leave a discount on the table.

Durable Power of Attorney
This is a legal document that appoints a person or party to act on behalf of an individual, generally giving them the power to take legal and financial actions. What makes this particular form of Power of Attorney “durable” is that it remains in effect even if the individual authorizing it becomes incapacitated.

Earned Premium
This makes the best sense if you think of it from the auto insurance company’s point of view: The earned premium is the portion of your premium that has been “earned” by the insurance company over the course of the policy’s term. For example, say you had a one-year policy with the company beginning on January 1, and today's date was June 1. As of today, half of the total premium would have been “earned”. The other half would still be unearned, even if you had already paid your premium in full.

Effective Date
The day that your auto insurance coverage actually begins. Look for this date on your policy and make sure you know when it is, because it's most likely not the same as the date your first premium check is due. Understand that you are not actually covered by the policy until its effective date.

Emergency Road Service
An optional coverage that pays a fixed amount towards towing, tire changes, battery and lockout services and the delivery of gas, oil and/or water. If you don’t have emergency road service through another means, adding it to your car insurance can be a smart move since many carriers offer it at a great price. See also “Towing”.

Endorsements
Also known as riders, endorsements are written or printed forms that attach to your auto insurance contract, and in so doing, change or override one or more provisions in the original contract. Say for example that halfway through your policy term you decided to change your deductibles or add a new car to your policy. To do this, rather than trash the whole contract, the insurance carrier would have an endorsement written up that describes the change. From the moment the endorsement was signed, it would become a permanent part of your contract.

Equifax
Formerly known as the Retail Credit Company, this credit reporting agency provides auto insurance companies information on prospective policyholders as they weigh the risk of underwriting that policyholder. Information on claimants is also provided on occasion. The reports issued by Equifax are known as Retail Credit Reports.

Exclusions
If a situation is not covered by a car insurance policy, it is listed in the policy as an exclusion. Say for example, your policy states that your car is covered against any and all losses 7 days a week except for Tuesdays between 3:30 and 5:00pm, or whenever the vehicle is parked facing north. These conditions of non-coverage would be listed as exclusion on your policy so you could plan, say, on Tuesday afternoons to take the bus. Often the excluded condition can be covered by adding extended coverage to your policy for an additional price. See “Extended Coverage.”

Expiration Date
Found on the declarations page of your policy, the expiration date is the date your policy ends. Usually the date includes a time of day, for example: 6/1/2009 at 12:01am. Here your coverage would end one minute after midnight on 6/1/2009, so when you think about it, you really aren’t covered on June 1st. That means you will want your new policy to begin on or before June 1st or risk being without coverage (and risk having to say so the next time you apply for coverage. For more on that, see “Continuously Insured.”)

Extended Coverage
When the provisions in the basic policy you’re considering aren’t enough to meet your needs, you can look at getting extended coverage. Say your policy covers the cost of repairing or replacing your car with the exception of your custom-made, gold-plated hub caps. If that were unacceptable to you, you could look into buying extended coverage for gold-plated hub caps at an additional price.

Extended Non-Owner Liability
Like extended coverage, extended non-owner liability would be an endorsement to a basic policy that you would ask for separately and would pay extra to get. That said, it’s a fairly standard add-on that provides broader liability coverage for specifically named people operating any non-owned car or trailer. A good example of this endorsement in use would be to cover individuals driving employer-provided cars.

Extraordinary Medical Coverage
Extraordinary medical coverage protects you in the case of accident-related injuries that require serious and/or long-term medical care. This coverage is frequently a part of the Personal Injury Protection package, but you will want to make sure because it is not offered uniformly by state or by carrier. Extraordinary medical coverage kicks in once you have exhausted the limit on your standard medical benefits coverage.

Family Automobile Policy
You will not find Family Automobile Policies on offer anymore, but the term is still used to describe historical policies in which both physical damage to the policyholders car and liability protection were offered in one package. Nowadays, policy shoppers looking for that combined coverage should consider the Personal Automobile Policy.

Financial Ratings
Financial ratings are in essence the opinions of an organization that dedicates itself to judging the financial strength of insurance companies as well as their abilities to meet the ongoing obligations they have to their policyholders. No matter how much you stand to save on premiums, there’s no point in buying a policy with a company that can’t afford to pay on your claims. For this reason, ChoiceAutoInsurance.com does not provide quotes from auto insurance companies whose financial ratings are not in the top tier. We also provide links on this Web site to the largest rating organizations in the industry, allowing you to see for yourself how the different auto insurance carriers rate.

First Party Benefits
Applicable only in Pennsylvania, First Party Benefits, or FPB, is similar to PIP in other states. It is a comprehensive benefits package designed to cover you and any relatives living in the same household with you. In the case of an accident, FPB plans pay the medical expenses plus any lost income, accidental death benefits, or funeral costs. The total amount of the coverage is capped at limits you select when you buy the policy.

Full Coverage Auto Insurance
Do not let the term fool you: Full coverage does not mean you are fully covered by your car insurance policy. It means only that the policy contains all the car insurance coverage legally required in your state – and depending on the state you live in, that may cover only the bare minimum. If you’re looking at a full coverage policy and want to make sure you are well covered according to your current place in life, we would recommend trying out our Insurance Requirement Worksheet.

Funeral Benefits
Coverage for funeral benefits is often found in the section of your policy called Personal Injury Protection (or First Party Benefits, depending on what state you’re in). If someone covered by the plan dies as a result of accident-related injuries, regardless of who is at fault, this coverage pays towards the cost of the funeral. The coverage limit on funeral benefits is set by you when you purchase the policy.

Gap Insurance
Gap insurance is not an automatic part of most car insurance policies: You need to ask for it. And when you buy a new vehicle for little or no money down, it becomes a wise add-in to consider. What gap insurance does is pay the difference between the value of the vehicle at the time of a total loss and the amount remaining on the loan for the vehicle. So if you bought a $30,000 car with no money down, and it was totaled 45 days later, you would still owe almost $30,000 on the car loan. But the adjuster may decide it was only worth $26,000 at the time of the accident. In this instance, gap insurance would prevent you from being out your brand new car as well as $4,000 cash.

Garaging Location
For car insurance purposes, the garaging location is the zip code where your insured car is parked most of the time. This location affects your insurance rate, and it is normally keyed off of your home address. If you leave your car parked somewhere other than in your home zip code, you will definitely want to let ChoiceAutoInsurance.com know. It might well net you some savings on your premium.

Generic Auto Parts
These are the parts of cars that frequently get replaced after accidents and which are manufactured by companies not associated with the car manufacturers. When these parts are certified, auto insurance carriers consider them as good as those that come from the original equipment manufacturer (OEM). This is not only smart business sense on the insurance carrier's part: The existing of the generic auto parts manufacturers helps keep insurance premiums down by preventing OEMs from overcharging for easily damaged parts. They also keep downward pressure on the price of car parts in general by forcing OEMs to price their parts competitively. As a result, the price difference between OEM parts and generic auto parts has narrowed considerably over the years.

Good Student Discount
Statistical research has shown a relationship between someone getting good grades in school and being a safe driver. For this reason, most auto insurance companies now offer premium discounts for full-time high school or college students with grade point averages of 3.0 or better. This is one of the many tips you'll find on our insurance requirement worksheet.

HEV
This stands for Hybrid Electric Vehicles. Also known as “hybrids,” these cars are powered by a combination of battery and fuel. By using less gas, HEVs emit fewer pollutants and receive better gas mileage than standard vehicles. For the moment, there is no auto insurance policy benefit to owning or driving an HEV over a standard combustion engine vehicle. HEVs tend to be pricey, but as of this writing, they do not attract more than their share of thefts.

Homeowners Insurance
This may look like an odd entry to have in an auto insurance term glossary, but it has its purpose here. See, if your car is vandalized or stolen, it is covered by your car insurance . . . but any items that happen to be inside your car at the time, or items that are stolen from your car without your car being particularly affected, are typically covered under your homeowners insurance. If you don’t own a home at this time, know that some renters insurance policies will provide that same protection.

ID Card
In the car insurance world, this is an identification card issued by your insurance provider that proves you have the liability insurance required in your state. Chances are if you are stopped for a traffic violation, you’ll be asked to show this card. If you purchase your car insurance policy online with ChoiceAutoInsurance.com, you can usually print this card right away on your own printer.

Indemnity
Most often associated with life insurance policies, an indemnity is a pre-determined sum that the carrier pays out in the event of a covered loss.

Insolvency
When an auto insurance carrier becomes unable to pay on claims as required, it becomes insolvent. The standards for insurance insolvency as well as the regulatory actions taken vary from state to state. As a rule, when regulators identify a carrier on the brink on insolvency, they take one of three actions: 1. Place the company in conservatorship under the guidance of the regulators in order to prevent the insolvency; 2. Place the company in rehabilitation under the direction of the regulators in an attempt to avoid insolvency; or 3. Liquidate the company. Part of the job of regulators is to detect an insolvency problem before it gets to the point of no return. For this reason, they perform routine financial tests on the insurance companies, and when one fails to pass such a test, swift action can be taken.

Insurance Claim Report
This is not the claim you file in the event of an accident. This is a report issued by an independent consumer reporting agency that details the claims you or any other insured driver may have filed with an auto insurance company. Nicknamed CLUE files after the most popular issuer of such files (Comprehensive Loss Underwriting Exchange) these reports provide the industry with a wealth of information, such as the make and model of vehicles that fare better or worse in accidents, or how often cell phones are involved in causing an accident. But the most important (and most controversial) data these reports provide is on the individuals themselves that are involved in the accident. These reports help auto insurers know when their policyholders are engaging in unacceptably risky or even fraudulent behavior. Individuals with multiple claims on their records are likely to be turned down when they apply for a new policy (these records do not, however, seem to affect the renewal of an existing policy). Since the average individual files a claim once every 10 years, and these independent reporting agencies hold their data for only 5 years, most people will find that they do not have a CLUE file. Anyone interested can get a CLUE report on themselves. To find out more, click here>>

Insurance Score
Studies have shown that people who manage their money well also tend to handle driving a car more responsibly. For this reason, a growing number of car insurance companies use insurance scores as tools for rating and underwriting policies. Independent consumer reporting agencies develop these confidential scores by factoring in a variety of data about our financial habits: How timely we pay our loans, the number of open credit card accounts we have, and whether we’ve filed a bankruptcy, to name a few. This data is then cast against analytical models that objectively measure the relative likelihood of our costing the insurance companies a bundle at some point in the future. The scores and analyses of their significance contain no information about our income or race.

Insured
Anyone covered by a given car insurance policy. Examples would include the policyholder, any relatives of the policyholder living at the same residence, and any licensed driver using the insured's car with permission from the insured.

Judgment
A final decision rendered by a court of law. Let’s say, for example that Jerry ran his car into Nina’s house and the court determined that Jerry was wholly responsible for the accident in that Nina’s house was going a total of 0 miles an hour at the time of impact. The judgment here would most likely establish that Jerry must pay the cost of repairing Nina’s house.

Liability
Liability is a term that broadly means “legal responsibility.” If you ran a stop sign and hit another car, you’d probably be found liable for the damage done to the other guy’s car. But it’s rarely that cut and dry, which explains the length of this definition. As the cost of damage claims continues to rise, auto insurance companies are becoming more aggressive about distributing the blame. Accident data is now carefully combed and analyzed in order to dish out to all the parties involved their fair share of the negligence. How that negligence then translates into each party’s share of the liability is governed by the “apportionment laws” of the state where the accident occurred. And these laws can make a huge difference in how much anyone stands to pay or receive.

Nationwide, there are currently four systems for establishing damage liability: Pure Contributory Negligence, Pure Comparative Negligence, Modified Comparative Negligence, and No-Fault. To provide a quick flyover of how these laws work, let’s start by describing an accident: Say Car A, traveling in a right hand lane, suddenly decides to pull a U-turn across three lanes of traffic, and Car B, running into Car A, happens to be going faster than the speed limit at the time of the incident.

Pure Contributory Negligence: Under this law, since the driver of Car B contributed to accident by negligently driving faster than the speed limit, that driver is entitled to $0, even though Car A clearly caused the accident. Five states including the District of Columbia currently operate under this law. Pure Comparative Negligence: Under this law, the damage awards are tied directly to the percent of negligence each party is found to have. If Car B suffered $10,000 worth of damage in the accident, and Car B’s driver is found to be 25% responsible for that damage, Car A’s driver is liable for $7,500 of the damage and Car B’s driver for $2,500. This law is currently in effect in 13 states, including Alaska, Arizona, California, Florida, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, New York, Rhode Island, South Dakota, and Washington.

Modified Comparative Negligence: Thirty-three states have this law on the books, which begins by using the comparative percentage of negligence described above. The difference is, this law comes with a cut-off. Once Car B’s driver is considered 50% or (depending on the state) 51% responsible for the damage to his own car and passengers, he loses any right to recover damages. So even though the driver of Car A clearly behaved negligently, if the driver of Car B could have avoided the crash by staying within the speed limit, a judge may rule him 51% responsible for his own damages, leaving driver B to recover zip. No Fault: Now in effect in Colorado, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah, No Fault laws are the answer to the litigation problems caused by the other liability laws and their need to determine percentage of negligence. Under a no-fault system, your insurer automatically pays for your damages, regardless of fault. In exchange for this guaranteed payment, policyholders generally give up some of their rights to sue.

Liability Coverage
Liability coverage is essential in the lawsuit-happy times in which we live. This coverage protects you from losing everything you own (and them some) in order to pay for damages caused by an accident in which you are determined to be at fault. Liability coverage comes in two basic types: Bodily Injury Liability and Property Damage Liability. There is a minimum coverage requirement in most states, but it is generally advisable to get more than the minimum required by your state – especially for Bodily Injury Liability, since this is where most lawsuits occur. To find out what’s right for you, you might want to try our insurance requirement worksheet.

Limits
There is a maximum amount any car insurance policy will pay for a covered loss. This is referred to as a “limit.” Generally you will find that the lower the limit a policy has, the lower the premium is. In some cases and plans, you can choose your own limits. Some states, however, require you to buy certain levels of auto insurance coverage, and the limits you will be able to choose in those states will be restricted.

Medical Payments
Also known as MedPay, this coverage pays for medical and funeral expenses resulting from an accident regardless of who is at fault. If you are driving your own car, or someone else’s car with their permission, Medical Payments coverage also cover injuries to your passengers. In addition, should you or one of your family members be injured as a pedestrian in a traffic accident, MedPay will have you covered. If your policy doesn’t include Medical Payments by name, you will probably find Medical Benefits included as part of your Personal Injury Protection coverage.

Motor Vehicle Report
Every time you have an accident or receive a moving violation, information on the event is added to your driving record. A Motor Vehicle Report (MVR) pulls this data and compiles it for review at the request of car insurance companies. MVRs are compiled by state, so if you have been licensed to drive in multiple states, you will have more than one. The data has no expiration – it is up to the insurance company to decide when older data ceases to be relevant.

No-Fault Insurance
This describes the way certain policies are settled in the wake of an accident. If the coverage is no-fault, responsibility for the accident doesn’t have to be determined before an auto insurance claim can be settled. A growing number of states require car insurance carriers to issue no-fault insurance. To see if your state is one of them, click here>>

Non-Owned Auto
This refers to any vehicle that is not owned, borrowed, or leased by the insured, and which is used primarily for a business purpose. The guy who reads your water meter drives a vehicle leased by the utility company, for example. He’s licensed and he’s insured, but while he’s on the utility company’s clock, he’s driving a non-owned auto.

Non-Passive Alarm
This is what most people currently have on their cars. They close their car doors and hit a button on their key chains which makes the cars chirp. The defining feature of a non-passive alarm is that it has to be manually activated in this manner every time you leave the car. But then, if someone attempts to open your car, the alarm sounds, and the system disables the automobile's starter, ignition system, and/or fuel circuit.

Many car insurance providers now offer discounts to policy holders that have their cars equipped with non-passive alarm systems. If you have a passive alarm installed on your car, know that ChoiceAutoInsurance.com’s quote request form includes a place where you can say so. If there’s a discount available for you, we want to make sure you get it.

Other-Than-Collision
You will find this more commonly listed as "comprehensive" coverage, but there are some policies out there using this term and it can be confusing. Other-than-collision coverage pays for the damage and loss of use your vehicle as a result of something other than a collision or rollover, such as theft, vandalism or fire. Because the coverage offered by other-than-collision and comprehensive are interchangeable, you will not find a single policy that provides them both.

Passive Alarm
In spite of the bland-sounding name, passive alarms are actually a step up from the standard car alarm. They emit warning sounds when someone tries to get into your car, and once the alarm has been triggered, the system disables the automobile's starter, ignition system, and/or fuel circuit -- all the standard stuff. The difference is, you don't have to remember to hit that button on your keychain: The alarm goes on automatically. The greater theft protection this provides is encouraging a growing number of car insurance companies to offer discounts to policyholders that install passive alarms in their vehicles. If you already have a passive alarm installed on your car, know that ChoiceAutoInsurance.com’s quote request form includes a place where you can say so. We’re out to get you every discount we can.

Pay-At-The-Pump
First proposed in the late 60’s and considered in earnest in the 1990's, Pay-at-the-Pump was a nation-wide insurance proposal whereby auto insurance premiums would be paid to state governments through a per-gallon surcharge on gasoline. While it was never implemented, the proposal earned enough serious supporters that its embers continue to burn.

Payee
An insured person (or that person's beneficiary) who receives a payment from an auto insurance company.

PayPal
Making an online payment without revealing your financial information to the individual business you’re paying is possible through a system called PayPal. By setting up an account with PayPal, you can then pay just about anyone online safely and easily. Some auto insurance companies already accept premium payments through PayPal, and others will no doubt be following soon.

Peril
If this brings to mind silent movie heroines being tied to railroad tracks, you’re not too far off. In the insurance world, a peril is a specific danger to your car that could leave it damaged or totaled, such as fire, flood, earthquake, theft or vandalism. Your policy will tell you which perils you are protected against and which perils, if any, are excluded from your coverage. When comparing quotes, make sure all the potential policies are promising to cover the same perils.

Per Occurrence Limit
An auto insurance company will pay for all claims arising from a single incident up to a set cap. This is referred to as the Per Occurrence Limit. There is a per-occurrence cap for damages and a per-occurrence cap for injuries. Most car insurance policies offered split limits for injuries; one part capping the payout per person and the other part capping the payout per accident, for example $100,000(per person)/$300,000(per occurrence).

Per Person Limit
This refers to the cap amount an auto insurance company will pay for any one person's injuries arising from a single incident. Most car insurance policies offered split limits for injuries; one part capping the payout per person and the other part capping the payout per accident, for example $100,000(per person)/$300,000(per occurrence).

Personal Auto Policy
Also known as PAP, the Personal Auto Policy is the most common car insurance policy sold today. Its coverage includes liability, medical payments, uninsured/underinsured motorist coverage, and physical damage protection.

Personal Injury Protection
Also known as PIP, Personal Injury Protection is a type of coverage that is available only in certain states. Where it is available, however, it is usually mandatory. PIP provides expanded coverage of accident-related medical costs. In some states, it also pays for lost wages. To see if your state requires PIP coverage, check our liability requirements chart.

Personal Property
While your probably consider your car to be your personal property, this term refers to items covered under your homeowners insurance that may be in your car the time it is stolen or damaged. This might include anything from furniture, pictures frames, clothing, dishes, groceries, laptops, personal electronics, and various other household or business-related goods, to jewelry, cash, securities, and other high-value items. Any personal property which may be in transit inside your car at the time of theft or accident is not covered under car insurance policy. It would, however, be covered by your homeowners or renters insurance policy.

Physical Damage:
This is the section of your car insurance policy that addresses damage done to your vehicle, including that caused by a collision, rollover, fire, flood, earthquake, theft or incident of vandalism. Collision and Comprehensive coverage is in this part of your policy.

Pleasure Use
A car that qualifies as a pleasure use vehicle is one that is driven just for fun, with no work or school commuting done in it at all. Most of us can’t claim this about our cars, especially if we only have one. But if you commute in your ’75 Pinto and save your Hummer strictly for offroading on the weekends, then the Hummer would be a pleasure use vehicle. RVs and collector cars generally fall into the pleasure use vehicle category as well.

Policy
This is the formal written contract for car insurance signed by both the car insurance company and the policyholder. Documents making up the policy may include (or may expand to include over time) forms, endorsements, riders and attachments.

Policy Expiration Date
Found on the declarations page of your car insurance policy, the expiration date is the date your policy ends. Usually the date includes a time of day, for example: 6/1/2009 at 12:01am. Here your coverage would end one minute after midnight on 6/1/2009, so when you think about it, you really aren’t covered on June 1st. That means you will want your new policy to begin on or before June 1st or risk being without coverage (and risk having to say so the next time you apply for coverage. For more on that, see “Continuously Insured.”).

Policy Period
Pretty much as it sounds: The period of time a policy is in effect. For most car insurance policies, a policy period is six months or one year.

Policy Term
This is the length of time a car insurance policy is valid. Depending on where you live, your ChoiceAutoInsurance.com policy will probably have a term of either 6 months or 12 months.

Policyholder
You with car insurance. A policyholder is anyone who owns an auto insurance policy or is covered by a policy owned by another driver, for example the policy owner’s spouse.

Preferred Risk
Car insurance premiums are calculated based on how an applicant fares against the industry’s standard risk. If your risk profile is more favorable than average, you are considered a preferred risk and are every insurance company’s favorite customer. Preferred risk policyholders receive discounts on their premiums, so we are out to help you squeeze into that profile if at all possible. See our insurance requirement worksheet for tips on submitting your best application.

Premium
The price an auto insurance company charges for coverage. Since your car insurance premium is based on the frequency and cost of potential accidents, theft and other losses, it is calculated just for you in response to the information you supply on your application form. How the auto insurance company views you as a risk will greatly affect your rate, as does the type of coverage you purchase, the make and model of your car, your driving record, your years behind the wheel, and the number of miles you drive per year. Also taken into consideration is your age, gender, where your car is primarily driven, your credit rating, and information specifically provided for the purpose of receiving a discount, like a student’s grade point average. And after all that, prices still vary from company to company, which is why getting multiple quotes is such a good idea.

Primary Driver
The person who drives a given car most often is considered the primary driver. If it’s just you and your car in the world, then it’s pretty easy to determine who is the primary. But this comes into play as families grow and you find yourselves with multiple cars and multiple drivers. Then, assigning drivers to different cars as primary or secondary drivers as a way of saving on your car insurance premiums can become a real art. For tips on how to do this, check out our insurance requirement worksheet.

Primary Policyholder
If you purchase a car insurance policy that additionally insures your spouse and oldest child, for example, all three of you would be considered policyholders, but you, as the purchaser, would be the primary policyholder. The primary policyholder serves as the main point of contact and is the one ChoiceAutoInsurance.com would look to for final authority and approval if any changes are requested on the policy.

Primary Use
This describes how the covered car is typically used. Car insurance applications usually ask you to choose which of the four categories best matches how you use your car most: Commuting, business/commercial, pleasure use or farming.

Private Passenger Automobile
Also known as PPAs, these are any four-wheeled motor vehicles subject to motor vehicle registration and which are used for private personal use. They include ordinary two- and four-door cars, station wagons, jeeps, sports utility vehicles, pick-up trucks, panel trucks and delivery vans of 1,500 lbs. or less as long as they are not being used commercially. Also included in this category are utility trailers designed to be pulled by a PPA.

Property Damage Liability Coverage
If you damage, destroy or cause “loss of use” to someone else’s property (such as their car or home) while behind the wheel, this portion of your auto insurance covers your obligation to compensate them. It can also help pay your expenses should these folks decide to sue you. The payout amount is capped at the limit you yourself choose when you buy your car insurance policy. Commonly referred to as “PD”, Property Damage Liability coverage is required in most states and is generally written into your policy along with Bodily Injury protection.

Pro Rata Cancellation
If you cancel your auto insurance contract before your policy expires and want to get the unused portion of your premium back, you want a pro rata cancellation. Say for example you paid $365.00 for a one year policy and you ask to cancel your contract 6 weeks (42 days) before your policy expires, with a pro rata cancellation, the auto insurance company would refund you the $42.00 of unspent premium.

Pure Comparative Liability
See our full listing on liability in all its forms under “Liability.”

Rental Car Reimbursement
We are not out to sell you on rental car reimbursement, or anything else for that matter, but this is an add-on to a basic car insurance policy that ChoiceAutoInsurance.com thinks gets underated far too often. While it won’t pay for a rental car when the insured car is in the shop for its regular tune-ups, it can be a blessing after an accident or theft. In fact, many policyholders are surprised to find a rental car is NOT covered by their basic policy when they suddenly are in the need for it.

Do the math: The average time a car is in the shop after an accident is two weeks. Meanwhile the rental car expenses over that period can easily run above $500. The cost of adding rental car reimbursement to a policy is a buck or two a month. So if you don’t need it for 499 months before your car gets stolen or crunched, good for you. But that's when the cost of coverage breaks even. If you need it any time before 499 months have elapsed, you'll save more money than the coverage costs. Good deal.

Safe Driver Plan
Many states have adopted a rating system that assigns points for traffic violations and accidents, and rewards those with few or no points over set periods of time with auto insurance premium discounts. Safe driver plans and merit-rating plans are two of the most common forms of these rating systems. The likelihood of such a plan in your state is good, which is one of the reasons why ChoiceAutoInsurance.com’s quote forms asks about recent accidents and traffic violations. If there’s a discount out there for you, we want to make sure you get it.

Salvage:
When an insurance company pays on a claim, it receives salvage rights over the property covered by the claim. As a wild but interesting example, when an insurance company pays claims on cargos lost at sea, it then has the right to recover sunken treasures. In the case of a car insurance claim, if your insured car is totaled, upon paying your claim, your insurer in essence “buys” that totaled vehicle. You insurer then has the right to salvage your car by doing whatever makes the best sense: recondition it for sale, chop it up to resell in parts or just sell it as scrap. This is done to help the insurance company reduce the loss associated with your claim.

Secondary Driver
Also know as an “occasional driver,” a secondary driver is someone listed on your auto insurance policy but who is not listed as the primary driver of the covered car. It sounds more complicated than it really is. Say for example you and your spouse have a policy that covers both of you and both your cars. Then you are Driver A, the primary driver of Car A and the secondary driver of Car B. Your spouse is Driver B, the primary driver of Car B and the secondary driver of Car A. If you as Driver A get into an accident while driving Car B, you are covered as the secondary driver of your spouse’s insured car.

As families grow and you find yourselves with multiple cars and multiple drives, assigning drivers to different cars as primary or secondary drivers as a way of saving on your insurance premiums can be a real art. For tips on how to do this, check out our insurance requirement worksheet.

Short Rate Cancellation
If you cancel your auto insurance contract before your policy expires, you may be subject to a short rate cancellation. This differs from a pro rata cancellation in that you would not get a proportional amount of your unused premium back. This is due to the insurer claiming (not without merit) that there are certain fixed expenses the company must incur on your behalf whether keep your policy through the entire term or not. So let’s say, for example, your policy cost $365.00 for one year’s coverage, and 10% of the cost of your policy went to unrefundable fixed expenses. In this case, were you to cancel your contract 6 weeks (42 days) before your policy expires, only $32.3 of the $36.5 in fixed expenses would have been paid out of your premium. For this reason, you would not be entitled to the full $42 you might think you have left. Before cutting your refund check, the auto insurance company would deduct the remaining $4.20 in fixed expenses, which would then leave you with a refund of $37.80.

SR-22
The SR-22 form is an official document, issued by the auto insurance company or your state’s DMV, in response to a court-ordered requirement to show proof of liability insurance. The reason for this request varies from state-to-state, but it’s frequently made after a driver has been convicted of a DUI or other more serious traffic violation. Often an SR-22 is required to lift a suspension on the driver’s license. If you need an SR-22 issued with your policy, it is not the end of the world, but it does require more personal service than we can give you from the Web site. We invite you to contact ChoiceAutoInsurance.com’s customer service team at 1 (800) 639-5013. We can be reached 24 hours a day, 7 days a week, and are ready to help you through this right now.

Stacking of Limits
Most often seen in use with Uninsured/Underinsured Motorist bodily injury liability cases, the stacking of limits involves combining the limits of more than one policy and applying this combination to a single accident. For example, say one driver has a policy covering two different cars, each carrying Uninsured Motorist bodily injury limits of $100,000 per person and $300,000 per accident. In some jurisdictions, courts might require these policies be stacked to pay for a loss. This would double the driver’s liability protection to $200,000 per person and $600,000 per accident.

Standard Risk Class
This is the group of policyholders, or potential policy holders, whose risk factors place them in the middle of the risk spectrum. If you are deemed to be in the standard risk class, it means your Insurance underwriters have approved your coverage at the “average premium” price. Other insurance classifications include the preferred risk class, the substandard risk class and the declined risk class.

Steering Restraint
Steering restraints are generally bars or telescoping hooks that attach manually to the steering wheel and lock it into a relatively fixed position, making the car impossible to steer until the restraint is removed. The most commonly known product in this category is The Club®. One of the nice features of a steering restraint is that it is plainly visible to thieves and may discourage them before they bother to break into your car. The downside is that they must be manually placed, removed and stowed every time the car is used. Many auto insurance companies offer discounts to their policyholders who use steering restraints on their insured vehicles.

Subrogation
Similar to assignment, subrogation is the transfer of legal rights from one party to another. In the case of car insurance, the subrogation usually transfers a set of policyholder rights to the insurance company. For example, when someone hits you and you submit a claim on your insurance policy for payment, you lose your right to demand payment directly from the guy who hit you. Instead, you “subrogate” that right to your insurance company.

Substandard Risk Class
The substandard risk class is the group of policyholders, or potential policy holders, who are determined by the underwriter to have a greater-than-average likelihood of loss. If you are deemed to be in the substandard risk class (or special risk class, as it is sometimes known), you are unlikely to be turned down by the auto insurance company, but you will probably pay a higher than average premium. Your risk class is not fixed for life; as the date of your last ticket or accident moves further into the distance, you will find yourself moving up in risk class. In the interim, however, there are steps you can take now to lower your premium. See our tutorial section, or try out our insurance requirement worksheet for more personalized recommendations.

Supplemental Spousal Liability
If you’re not driving in New York State, you can skip this one. If you are, supplemental spousal liability, or SSL, is an optional coverage only in your state that protects you if you’re found to be at fault in an accident resulting in the injury or death of your spouse. SSL coverage is capped at the limit you choose when you buy your car insurance policy.

Supplemental Family Member Liability Coverage
If you are a resident of Maryland and want to insure yourself against loss should family members be with you in the car during an accident that causes their injury or death and you are found to be at fault, you can consider supplemental family member liability coverage. Referred to as SFML, this is an optional coverage that can be added to your auto insurance policy or quote by calling our customer service center at 1-800-639-5013.

Threshold Level:
In no-fault states, anyone injured in a car accident can file a claim for damages with their own auto insurance company. In doing so they can skip the hassles of establishing liability and fighting with the other guy’s car insurance company. They file a claim with their own insurance company, receive a settlement and move on. But this simplification comes at a price: The injured party’s right to sue the other guy is restricted. He must prove that his injury passes a “threshold level” in terms of severity or expense before a court case can go forward. The threshold level is different from state to state, and may be either monetary (for example, hospital and rehabilitation costs in excess of $15,000) or descriptive (for example, injury must alter the injured party’s ability to perform his job or daily life routines). To find out if you are in a no-fault state and subject to threshold levels, click here.

Tort
Tort is a legal term used to describe a private or civil wrong or injury. In the world of car insurance, it’s generally used to deem one driver legally responsible for injuring someone and/or damaging someone’s property.

In most states, tort protection is included in your liability coverage. Some states, however, ask you to select either “full” or “limited” tort provisions as you purchase your policy. In these states, by limiting your right to sue for non-monetary damages (like pain and suffering), you become eligible for a reduced car insurance premium. This is all still pretty new and the jury is still out as to whether the savings are worth it. Some drivers, however, are afraid that if they keep the full tort provision in their policy, they’ll be marked as a higher lawsuit risk. Find out what customers are saying about this and other issues by checking into our blog>>

Tort Feasor
If something is “feasible” it is “doable,” right? Well a “feasor” is a “doer.” (And malfeasance is the “doing” of something “bad”, in case you were curious.) As we mentioned above, “tort” is a legal term used to establish that a wrong has been done to somebody’s person or property. So, simply translated, the Tort Feasor is the Wrong Doer. In the world of car insurance, this is almost always the driver at fault.

Towing Coverage
This is an add-on option to your policy that pays a fixed amount towards towing if your car breaks down on the road or becomes un-drivable after an accident. If you already belong to a road-side service, you don’t need your car insurance to provide towing. That said, the cost of adding towing can be extremely reasonable and can even beat out some of the road-side services. You may want to run the numbers.

Underinsured Motorist
If you are in an accident where the other guy is at fault, and his auto insurance policy limits are set below the damage he caused either in injuries or property loss, Underinsured Motorist (UIM) coverage gives you the ability to collect the remaining amount from your own insurance company.

Uninsured Motorist
Uninsured Motorist is becoming more and more important as the number of people driving without car insurance continues to increase. In recent years, the problem has become so prevalent that Uninsured Motorist coverage is now mandatory in almost half of the states nationwide. This coverage protects you against the cost of bodily injury and property damage if the driver at fault in the accident either is uninsured or flees the scene.

Unsatisfied Judgment Fund
This law predates both compulsory liability insurance and uninsured motorist laws, all of which were developed to deal with the same problem: The financially irresponsible motorist. In 1947, North Dakota started the first Unsatisfied Judgment Fund by assessing each car $1 upon registration. This money was placed in a fund to compensate those who had been injured in car accidents and awarded monetary damages by the court, but were unable to collect from the responsible party. Simple, practical and successful, the Unsatisfied Judgment Fund approach was widely discussed in the 1950s-1970s, when the automobile insurance industry was rapidly maturing. Only four other states ever adopted it, however: Maryland, Michigan, New Jersey and New York.

Usage
When applying for car insurance, you’re asked to state your vehicle’s primary function, or usage. In doing this, the auto insurer is trying to get a feel for how you will use your car so the risk of your car getting stolen or crashed can be better assessed. There are three usage categories: Commute, business and pleasure. if you primarily drive your car to and from work, the usage is considered "commute.” If you're self-employed and you primarily drive to see customers, the usage is considered "business." If you neither work nor commute, or if the car you’re looking to cover is a second vehicle that you use only on the weekend, your car’s usage would be considered "pleasure."

VIN
Your Vehicle Identification Number, or VIN, is a unique 17-digit number found on the driver’s side of the dashboard near the base of the windshield and on the edge of the driver’s side door. The VIN contains the vehicle's serial number, as well as abbreviations for the make, model, and year of the car. ChoiceAutoInsurance.com can obtain quotes for you without you providing your car’s VIN, but you should expect to have it handy when you are ready to purchase your policy.

Waiver of Collision Deductible
While it’s illegal to drive without car insurance, those drivers are unfortunately out there. If you get hit by one of them, your uninsured motorist provision in your collision insurance will kick in to cover the damages. But only after your deductible has been satisfied, meaning you’re still out of pocket for the other guy’s negligent behavior. This is clearly unfair. That’s why ChoiceAutoInsurance.com offers collision deductible waivers on the policies quote in every state where they're available.

Collision deductible waivers aren’t available nation-wide, but in states where they're available they are generally purchased in conjunction with your collision coverage. Then, if you are involved in an accident with an uninsured motorist who is held legally responsible, your collision deductible is paid for. If you live in a major metropolitan area, or other locale with a hearty percentage of uninsured drivers, choosing a combination of a high deductible with the collision deductible waiver is a good way to save on your premium while avoiding undue exposure to risk.

Whole Dollar Premium
This is a fairly standard practice in the insurance industry, and it simply means “rounding to the nearest dollar” on your premiums. If the car insurance package you assemble costs out at $100.51, your premium will be $101.00. But if it costs out to be $100.49, your premium will be $100.00.

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