Terms and conditions of auto insurance

Insolvent Having insufficient financial resources (assets) to meet financial obligations (liabilities).

Loss The happening of the event for which insurance pays

Verbal Threshold In no-fault auto insurance states with a verbal threshold, victims are allowed to sue in tort only if their injuries meet certain verbal descriptions of the types of injuries that render one eligible to recover for pain and suffering.

Physical Damage Damage to or loss of the automobile resulting from collision, fire, theft or other perils.

Broker A marketing specialist who represents insurance organizations and who deals with either agents or companies in arranging for the coverage required by the customer.

Insurer The party to the insurance contract who promises to pay losses or benefits. Also, any corporation engaged primarily in the business of furnishing insurance to the public.

Underwriting The process of selecting risks for insurance and determining in what amounts and on what terms the insurance company will accept the risk.

Liability Insurance (1)Insurance covering the policyholder's legal liability resulting from injuries to other persons or damage to their property. (2) Provides protection for the insured against loss arising out of legal liability to third parties.

Indemnity Legal principle that specifies an insured should not collect more than the actual cash value of a loss but should be restored to approximately the same financial position as existed before the loss.

Declination The insurer's refusal to insure an individual after careful evaluation of the application for insurance and any other pertinent factors.