Motorcycle Insurance Glossary
This motorcycle insurance glossary is designed to serve as a ready reference for any items or terms in a motorcycle insurance coverage policy that may not be easily understood by a policy owner. The goal of this glossary is to help potential insurance purchasers understand the policy correctly before buying it.
Actual Cash Value
Actual cash value in your motorcycle insurance policy refers to the cost of replacement of the vehicle in the event of its total damage or theft. However, the cost of depreciation and obsolescence will be deducted from market value of the new motorcycle in such case. Even if you have installed a world class music system in your car, the insurance company does not care about that even if you have pictures and receipts for verification. This is frustrating.
Accidental Damage Coverage
Accidental damage coverage covers the risk of accidental damage caused to a motorcycle, which is not caused due to malicious damage, fire, theft, or the fault of a third party.
Binder
A binder is a temporary agreement that states the insurance policy has taken effect. The binder states that the policyholder has complied with all the requirements under the California motorcycle insurance laws. A binder may be useful in specific situations when immediate issuance or endorsement of the policy may not be possible.
Claim
A claim refers to a demand submitted by the policyholders or their beneficiaries for reimbursement of the benefits as covered under the motorcycle insurance policy.
Broker Agent
A broker is a motorcycle insurance agent, middleman, or sales person who acts as a conduit between the insurer and the insured. Such individual must hold a license to practise as an insurance agent or broker.
Certificate of Insurance
The Certificate of Insurance is a document evidencing the fact that the motorcycle driver possesses a valid insurance policy for the vehicle. The certificate specifies who may drive the motorcycle and for what purposes.
Compulsory Excess
Compulsory excess refers to the amount that a policyholder is required to pay towards each claim.
Insurance Schedule
The insurance schedule is an important document providing specifics of the policyholder’s motorcycle insurance coverage as well as the information supplied by the policyholder to the insurance provider.
Liability Insurance
It is the insurance that makes payment on behalf of the policyholder for any costs or losses caused to another party due to the policyholder’s fault.
Policy
The policy is the written agreement or contract effecting insurance that includes all the clauses, endorsements, riders, and other relevant documents which states the fundamentals of the insurance contract.
Renewal
Renewal refers to the principle of automatic re-establishment of the validity of the motorcycle insurance policy affected by a payment of timely premium.
Replacement Cost
Replacement cost refers to the full cost of replacement of a motorcycle, without regard to the depreciation of the lost vehicle, but capped by any upper limit mentioned in the insurance policy.
Uninsured Motorist Coverage
Uninsured motorist coverage is an endorsement to an insurance motorcycle policy that covers the risk of collision with another driver who is without liability insurance.
Voluntary Excess
Voluntary excess refers to the extra amount that a motorcycle policyholder may agree to pay towards a claim with an aim to reduce the annual costs of the premium.