THE NEW ENGLAND INSURANCE NETWORK: Insurance Definitions

This segment offers consumers a reference for understanding all types of insurance. In an attempt to rid the reputation of "impossible to read context" we have written our definitions in an easier to understand format. However, due to the huge amount of data, it may take some time to fully complete this library- we appreciate your patience.

Deductible	A deductible is a big word for self-insuring. Simply put, a deductible is the amount you're responsible for in a claim. For example, say you slip on an ice patch and cause $2,000 in damage to your car. Because you decided to carry a $500 deductible you have chosen to carry $500 dollars of the financial burden to repair your car(if the accident is your fault) while the insurance company agrees to cover the remaining $1,500. Deductible's are necessary because without them people become, usually not on purpose, less responsible with personal property. In reflection, the higher the deductible the less money it costs to insure because you have decided to take on more responsibility.
Part I	Bodily Injury covers you, household members and anyone that uses the covered auto with your permission. Any injuries or death sustained by the use of your car is covered as long as the injury occurred anywhere where the public has a right of access. "BI" DOES NOT cover accidents outside the state of Massachusetts, extraterritorial areas or injuries to guest occupants of the car. You must carry Optional bodily coverage for this.
Part II	Personal Injury Protection or better known as "PIP" is a mandatory coverage that protects you and anyone in your vehicle or someone who has permission to use your vehicle. It also covers you if your injured in another vehicle besides your own or if your hit as a pedestrian. Coverage is provided by your own insurance carrier. Reimbursement is also made if you need to hire someone(nonfamily) "replacement services" to do certain jobs that you can no longer do because of the accident (i.e. house cleaning).
Part III	Uninsured Motorist. Since some state's, especially one's we border (New Hampshire and until recently Rhode Island still does not require mandatory auto insurance, we have to foot the bill to protect ourselves. And because people are not required to carry insurance they choose not to and therefore force the responsible people to do it for them. Uninsured Motorist also covers a "Hit and Run" situation.
Part IV	Damage to Someone Else's Property refers to damaging Massachusetts vehicle's as well as out of state vehicle's and non-vehicle objects such as fences, tree's, stone walls etc. no matter what state they're or you are in.
Part V	Optional Bodily Injury. In addition to increasing Part I., Bodily Injury Limits this coverage also covers out-of-state, extraterritorial area driving and guests in your vehicle. It is very important to carry this coverage if you plan to have friends, colleagues, etc. in your car. Basically this coverage is your "sue" money.
Part VI	Medical Payments. This provides medical payments and funeral expenses because of an auto accident to anyone in the described vehicle, the insured (you) and household members. It also covers you and your household members if the injury occurred in someone else's vehicle or as a pedestrian. Coverage: Pays after PIP and up to 2 years from accident date.
Part VII	Collision is simply coverage of your vehicle in case of an accident. However, if the accident was not your fault then the person who hit you would pay to have your car fixed under his policy. The only exception to this is if the person who hit you has no insurance, in that case you would have coverage under your "Uninsured" coverage listed above. The way it works is your insurance company will fix your car and then go after the person who hit you for reimbursement- this is called "Subrogation." Collision also provides coverage when lending your car to someone that's not listed on the policy and does not have there own auto insurance policy. However, if the person whom you lent your car to, a friend or co-worker for example does have an auto policy for there own car then there policy will cover the cost of the accident. Please note, if the person whom you lend your car to is a frequent driver (such as a live in roommate) you must list them on the policy as an "occasional driver." Failing to do so may cause problems if your insurance company finds the driver is a frequent user when you claim he/she is not.
Part VIII	Limited Collision. Some people who feel there car does not contain enough value to have full collision coverage may choose have limited collision. Limited collision provides coverage as long as you know who hit you. IT DOES NOT COVER HIT AND RUNS. For example, if you come out of the shopping mall and notice that someone dented your door, you will not have coverage. This goes the same for anyone who may be driving your car.
Part IX	Comprehensive covers glass, theft, fire, vandalism, falling objects, explosion, earthquake, windstorm, hail, water, flood, riots and a bird or animal or a private passenger automobile not used as a public conveyance. Glass loss in Massachusetts carries no deductible unless you request it. If your car is stolen you are allowed to receive "loss of use" coverage to rent a car, however, you must wait 48 hours after you file the loss and the coverage will be suspended as soon as the car is located or your claim is paid.
Part X	Substitute Transportation is optional but it may be a good idea. If you're in an accident and your car is not driveable you may have to rent an automobile. The same may occur if your car is stolen. As soon as they, if they, recover your car from a theft your rental coverage is suspended even if it's going to take two weeks before your car is repaired. Substitute Transportation covers the cost to rent while your car is being repaired or stolen.
Part XI	Towing and Labor. Unless you don't have "AAA" or some other auto club protection you may buy this coverage for general towing and on-the-spot labor expenses.
Part XII	Underinsured Motorist. Because some people don't carry enough coverage this insurance is offered to kick in when the other driver who hit you doesn't have enough insurance to cover your medical and property damage loss. In Massachusetts $20,000 per person and $40,000 per accident coverage is free!
DISCOUNTS OFFERED
Passive Restraints	Credit applies only to seat belts that automatically lock into place once the driver sits in the driver seats. Manual seat belts do not qualify.
Public Transportation	If you use public transportation (commuter train/bus) to commute to work you may be eligible for a discount. Ask your agent for details.
Low mileage Discount	If you drive less than 7,500 you can receive a 5% discount off your collision/comprehensive coverage or 10% if you drive less than 5,000 miles. This applies to vehicles and not people. For example, some people have a third car for winter driving or a classic auto that isn't driven often. This discount applies to those cars as well.

Boating Experience	Boating experience is important when it comes to insurance. In most cases insurance companies like to see at least three years boating experience. If you have less than (3) yrs experience you will most likely be surcharged accordingly.
Liability	Liability is much like any other liability coverage, it covers any person who is injured buy your boat. The person can be someone on your boat or anyone else you may hit whether they are on another boat, in the water or where ever. It also will cover you and your family members. HOMEOWNERS INSURANCE DOES NOT COVER LIABILITY CAUSED BY A BOAT UNLESS YOU SPECIFICALLY ATTACH BOAT LIABILITY TO YOUR HOMEOWNERS POLICY!!!
Watercraft Coverage	This covers the actual boat, engine, propellers and permanently attached equipment- in and out of water while boating, launching, towing and storing. Many times insurance carriers will include the boat and its engine under a single amount. For example, if you have a 1990 30 foot Sea Ray worth $15,000 and a Mercruiser 250H.P. Inboard/Outboard worth $7,000 the carrier will simply cover your boat for $22,000 under "Watercraft Coverage." Check with your agent about how broad this coverage is when it comes to your policy. Some policies will cover damage no matter what, i.e.: hitting submerged object, sand bars, fire. It's important to know what it covers and what you need to do if it doesn't. Boat insurance is an insurance product you DEFINITELY WANT TO SHOP AROUND FOR. Their are many companies that specialize in boat insurance and offer a better price than the rest.
Trailer	Covers your trailer and usually carries the same deductibles as your boat.
Medical	Medical payments work much like auto and homeowners insurance medical payments. Small injury's that do not exceed a certain amount will be quickly paid under this coverage. So, if you have $5,000 medical payment coverage on your policy and someone slips and breaks an arm on your boat- if that medical bill in under $5,000 it will be paid out quickly. However, if it exceeds $5,000 your liability coverage will kick in and it will take more time and paper work to satisfy the loss.
Unattached Equipment	Simply put, anything that is not attached to the boat and pertains to the functioning of the boat is covered under this section. Normally carrying a smaller deductible(usually $50) "unattached coverage" generally covers oars, life jackets, seat cushions bumpers, ropes, horns and anything else that is boat related. It does not cover certain items that you may bring from home, such as portable radio's, sun glasses and shoes. And in case your wondering, Radar, Fish Finders and Compasses that are firmly attached to the boat are covered under "Attached Equipment." Check with your agent about a list of covered items.
Personal Effects	Personal items such as sports equipment and clothing would be covered under this type of coverage. Not all insurance policies have this type of coverage so ask your agent for details.
Water-ski Liability	Water-ski liability covers anyone injured when water-skiing or being towed by your boat. Some companies require that you purchase separate water ski and towing liability coverage. If you think you may need this coverage mark the box. This coverage is usually inexpensive.
Supplemental Towing	For those times when your boat just doesn't make it- you may need this coverage. Towing, gas delivery and spot repairs are usually covered here. This runs around $15 to $25 per year depending on the carrier.
Machinery Damage	Some carriers do not cover severe engine damage due to grounding or hitting submerged objects. Check with your agent about what your policy covers. Secondary markets usually are the only one's who separate the two.
Overland Transportation	If you are going to be transporting your boat often, take trips across state borders our are bringing a boat, for example, from Florida to New England you may need Overland Transportation Coverage. If you are in an accident, the boat falls off the trailer the boat will be covered for this particular exposed risk. Ask your agent if this is offered. Again, some carriers will include this in a basic policy.
Navigation	When rating a boat policy their is three types of "Navigation" areas: Atlantic Coast, Pacific Coast, and Inland/Lake's. Each area carries a different rate and depending on where you boat you can choose one, two or all three regions.
Uninsured Boater	Unfortunately not everyone is required to carry boaters insurance. Uninsured boaters insurance covers bodily injury to anyone on your boat that is injured because of the actions of another boater.

Term Life	A term life insurance policy provides temporary protection. The benefit only pays if the policyholder dies within a specified period of time. It is also a renewable policy which means at what ever renewable term you buy (i.e. 1 year) you have the option to continue the policy or cancel. A term policy is frequently used to provide additional temporary coverage for someone who has children. Once the children are grown you might not need the extra coverage. Another reason for extra Term life coverage is to pay off a mortgage if a spouse does not live to do so. will increase as you get older each renewal time and you are not investing the premium like a Whole Life or Universal Life policy. Term Life is cheaper and works the same as any other life policy but you are not investing your money.
Mortgage Life	Mortgage life is Term Life but specifically used to pay off a mortgage in case a spouse dies before the debt is paid. Many times banks will sell this type of policy to clients to cover the loan they provide and then name themselves(the bank) as the beneficiary- giving you no control of where the money goes. What happens if the policy is bigger than the loan? The bank still gets the money because they are the beneficiary.
Whole Life	This type of policy covers lifetime protection. At time of death the face value is paid to the beneficiary named. A policy may have a specify payments for as long as the policy holder lives or to a specified age (i.e. 65 to 70) or even a certain sum. The best thing about a Whole Life policy is that once the premium payment is set it does not change through out the policy period. Whole Life, unlike Term, is an investment and as it grows you may be able to borrow against it or cash it in after a certain time frame. Whole Life should be your main policy.

Ma. Automobile	Homeowners	Dwelling	Renters	Condo
Boat/Yacht	Jet ski's, etc.	Umbrella's	Commercial	Life

Part I. Bodily Injury	Part VII. Collision
Part II. Personal Injury Protection	Part VIII. Limited Collision
Part III. Uninsured Motorist	Part IX. Comprehensive
Part IV. Damage To Someone Else's Property	Part X. Substitute Transportation
Part V. Optional Bodily Injury- Increase Limits	Part XI. Towing and Labor
Part VI. Medical Payments	Part XII. Underinsured Motorist
Discounts and credits