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Automobile Reinsurance Facility
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Formerly called Assigned Risk, automobile reinsurance facility is a type of shared market mechanism where persons who are unable to secure insurance in the general market are assigned. Such insurance coverage usually involves higher premium rates than the general market.
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Appraisal
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Process that determines the value of property, or the extent of damage to that property, usually conducted by an impartial expert.
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Supplement/Supplemental Estimate
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Covers any additional damages not in the original estimate. For example, an initial estimate may call for certain repairs, but upon the repair facility actually doing the work, it may be determined there is more damage that needs to be repaired. The claimant is entitled to have the additional damages repaired. This is called the supplement or supplemental estimate.
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Amortization Term
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Refers to the amount of time to amortize the loan, usually expressed in months, as in three-year fixed-rate loan has an amortization term of 36 months.
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Sales Volume
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The quantity of sales a dealership experiences in a set period of time. Usually measured monthly, quarterly, or annually.
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Adverse Selection
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Term used to refer to the tendency of those exposed to higher risk to choose more insurance coverage than those exposed to a lower risk.
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Underinsured Motorist Coverage
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Coverage that pays for a person's bodily injury and related medical expenses after injury in an automobile accident and the responsible party (other than yourself) does not have adequate auto insurance. That driver is referred to as underinsured.
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Limit
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The maximum dollar amount of protection purchased by the policyholder for specific coverages.
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Loan Contract
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Refers to the written agreement between the borrower and the lender, specifying all terms of the loan.
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Field Adjuster
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An individual working in the field, outside of the insured company's home office, who examines and handles claims.
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Lease Refinance
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This is the term that describes the end of one lease and the beginning of another for the same vehicle. It is basically another way of saying renew for a lease. Most of the time there is an incentive involved for the lessee to refinance the lease. These incentives are typically lower interest rates, or lower residual values to offer a lower buyback option at the renewal lease's end.
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VIN
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An acronym for Vehicle identification Number. Each vehicle has a unique VIN number that is used to identify it, typically listed on both the door placard and the VIN plate on the driver's side of the dashboard near the windshield.
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Warranty
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A guarantee from the manufacturer or dealer that an auto (or item) will perform as specified or expected. Typical warranties cover specific mechanical problems for a specified period of time. For example, auto manufacturers may provide a 3-year/36,000-mile bumper-to-bumper warranty or a 10-year/100,000-mile limited powertrain warranty, among others.
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Rebate
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An amount of money given back to the consumer as an incentive for purchase.
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High-Risk Driver
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A person who has accidents or tickets on their driving record. Many insurance companies classify this person as a high-risk driver and charge them more for insurance.
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Guaranteed Automobile Protection
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Also called GAP. This refers to a product that will pay off any remaining balance owed on a loan after a total loss insurance claim is paid.
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Consumer Credit Protection Act
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See Truth-in-Lending Act.
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Effective Date
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The date on which coverage begins.
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Compound
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This describes the chemical composition of a tire. Tires are made from several types of rubbers, carbons, curing agents, and plasticizers, among other ingredients. These agents combined make up the compound of a tire.
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Independent Agent
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Individual who works for clients to procure auto insurance but is not employed by an insurance company.
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