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Actual Cash Value

An amount equivalent to the fair market value of the stolen or damaged property immediately preceding the loss. For real property, this amount can be based on a determination of the fair market value of the property before and after the loss. For vehicles, this amount can be determined by local area private party sales and dealer quotations for comparable vehicles.

Admitted Company

An insurance company authorized to do business in the state that they are licensed in.


A licensed person or organization authorized to sell insurance by or on behalf of an insurance company.

Aircraft Insurance

Coverage for the insured in the event that the insured’s negligent acts and/or omissions result in losses in connection with the use, ownership, or maintenance of aircraft.

Automobile Insurance

Coverage on the risks associated with driving or owning an automobile. It can include collision, liability, comprehensive, medical, and uninsured motorist coverages.

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A temporary or preliminary agreement which provides coverage until a policy can be written or delivered.

Bodily Injury

Any physical injury to a person. The purpose of liability insurance is to cover bodily injury to a third party resulting from the negligent or unintentional acts of an insured.  Bodily injury liability insurance grants coverage in case another person (or people) is hurt from an accident for which you are responsible. It covers the damages (up to the policy limits) that you’re legally liable for, and helps you with a legal defense if someone sues you for those damages. In Spartanburg and all of South Carolina we at Select Source can help you choose the right limits.  Bodily injury coverage is mandatory in South Carolina, and the minimum limit is $25,000/$50,000.  What does Bodily Injury Liability cover?  Bodily Injury liability limits are usually shown like this: $50,000/$100,000.  This is meant to be the limit that is represented the highest amount per person and per accident that your insurance policy would pay if you had to use this coverage.  As an example, if your limit was $50,000/$100,000 and you caused an accident that injured other people, your insurance would pay for up to $50,000 of one person’s medical bills. If others were injured then the same limit would apply to them ($50,000 per person). But the most the policy would pay for all injured parties collectively would be up to $100,000.  How much insurance do I need?  When deciding which Bodily Injury liability limits to choose, you should consider all of your assets, including your home and future earnings. Why? Because if you don’t have enough insurance to protect all of your assets, those assets could be at risk if you’re liable for damages that exceed your coverage limit.

Boiler and Machinery Insurance

Covers losses resulting from the malfunction of boilers and machinery. This coverage is usually excluded from property insurance creating the need for this separate product.  Broad Form Liability Coverage  Helps protect you from expenses related to injuries or property damage you or your watercraft cause in an accident. Some policies also cover certain accidental fuel spill liabilities and wreckage removal.


A licensed person or organization paid by you to look for insurance on your behalf.


Coverage against loss as a result of forced entry into premises.

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The termination of insurance coverage during the policy period. Flat cancellation is the cancellation of a policy as of its effective date, without any premium charge.


Notice to an insurer that under the terms of a policy, a loss maybe covered.


The first or third party. That is any person who asserts right of recovery.

C.L.U.E.  C.L.U.E. (Comprehensive Loss Underwriting Exchange) is a claims history database created by ChoicePoint that enables insurance companies to access consumer claims information when they are underwriting or rating an insurance policy. It typically contains up to five years of personal auto or personal property claims history.  You can order a C.L.U.E. report:  LexisNexis Personal Reports  Call toll free 1-866-312-8076

Collision (Auto)

Reimburses you for damage to your automobile sustained in a collision with another car or with any other object, movable or fixed, (for example, you accidentally backed into another object while pulling out from a parking stall and causing damage to the bumper and fender of your covered automobile).  Collision coverage covers damage to your car in a variety of situations. If you hit another car – the damage to your car would be covered by this part of your policy. For example, if you hydroplane on a wet road and hit a tree, damaging your front bumper, Collision coverage would take care of the repair costs – less your deductible.  Collision is an optional coverage and to include it on your policy, you must also purchase Comprehensive coverage. If you lease or finance your car, your bank may require  Collision coverage.  What should my collision deductible be?  When choosing a collision deductible, or if you want to purchase collision coverage at all, it’s important to think about the age of your car and how much you think repairs might cost you.  A collision deductible is the amount of money you would be comfortable paying out of pocket if a collision ever caused damage to your car. So if you hit a concrete barrier while trying to park and you had a $500 deductible, you would pay $500 out of pocket for the repairs and the insurance company would handle the rest of the repair costs.

Collision Deductive Waiver

This coverage waves your collision deductible if you are hit by an negligent uninsured motorist.

Common Carrier Liability

Coverage for transportation firms that must carry any customer’s goods so long as the customer is willing to pay. Examples include trucking companies, bus lines, and airlines.

Comprehensive (Auto)

Provides coverage for any direct and accidental loss of, or damage to, your covered automobile and its normal equipment, to include but not limited to fire, theft or malicious mischief.  Comprehensive coverage covers losses resulting from incidents other than collision. For example, you are covered if your auto is stolen or damaged by flood, fire or vandalism. Ever had a tree limb fall on your car during a storm? Or had someone break into your car?  Or had damaged to your car caused by hitting an animal like a deer? That’s what this coverage is for.  If you own or lease your car, your bank may require you to carry Comprehensive Coverage.  What should my comprehensive deductible be?  When choosing a comprehensive deductible, or if you want to purchase comprehensive coverage at all, it’s important to think about the age of your car and how much you think repairs might cost you.  A comprehensive deductible is the amount of money you would be comfortable paying out of pocket if you ever suffered this kind of loss. So if your car was stolen and you had a deductible of $500, you would pay $500 out of pocket and the insurance company would handle the rest of the expenses.

Comprehensive Glass Insurance

Coverage on an “all risks” basis for glass breakage, subject to exclusions of war and fire.

Credit Life Insurance

Insurance issued to a creditor (lender) to cover the life of a debtor (borrower) for an outstanding loan.

Custom Parts & Equipment Coverage  Many motorcycle owners like to customize their rides, and some policies pay for customized parts and equipment, often at no extra charge.

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The company refuses to accept the request for insurance coverage.


The amount of the loss which the insured is responsible to pay before benefits from the insurance company are payable. You may choose a higher deductible to lower your premium.  When you get insurance, you agree to pay up to a certain amount out-of-pocket in case of a loss. This amount is called your “deductible.” The deductible you choose often affects how much you pay for your premium. For example, a higher deductible usually means a lower premium. In the case of a covered loss, you’ll only be required to pay your deductible, and the insurance company usually covers the excess, up to the applicable limit for that loss under your policy.  Making decisions about car insurance is important.  A deductible is the amount you agree to pay out-of-pocket if you make a claim covered by your car insurance policy. For example, if your deductible is $500 and the accident damage costs $1,500, you’ll pay $500 and the insurance company will pay the remaining $1,000.  Select Source Insurance Group in Spartanburg can help you decide which is the right deductible for you.  The higher your deductible is, the lower your monthly premium will likely be. Figuring out the deductible that’s right for you depends largely on the amount you think you can afford to pay out-of-pocket if you have an accident. There is no right or wrong decision when it comes to determining your deductible amount-only what works best for you. At Select Source an agent can help you understand how the deductible amount you choose will affect your monthly premium.


A decrease in value due to age, wear and tear, etc.

Disability Insurance

Health insurance that provides income payments to the insured wage earner when income is interrupted or terminated because of illness, sickness, or accident.

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Amendment to the policy used to add or delete coverage. Also referred to as a “rider.”


Certain causes and conditions, listed in the policy, which are not covered.

Expiration Date

The date on which the policy ends.

Excess Liability  Sometimes used interchangeably with “umbrella”, “excess liability” refers to extended liability coverage. This coverage is meant to supplement your insurance coverage if the damages exceed your liability coverage. Be sure to talk to Select Source Insurance about what your excess liability covers.

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Face Amount

The dollar amount to be paid to the beneficiary when the insured dies. It does not include other amounts that may be paid from insurance purchased with dividends or any policy riders.

Fidelity Coverage  Companies and businesses often purchase this coverage to protect them against loss from employee dishonesty (such as theft of money, equipment, or other assets).

Financial Guarantee Insurance

A surety bond, insurance policy or, when issued by an insurer, an indemnity contract and any guaranty similar to the foregoing types, under which loss is payable upon proof of occurrence of financial loss to an insured claimant, obligee, or indemnitee.

Fire Insurance

Coverage for loss of or damage to a building and/or contents due to fire.

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Good Driver Discount

To be eligible for the Good Drivers Discount all operators of the insured vehicles must have been licensed for three or more year, have no more than a one (1) point charge on their driving record and has not been determined “at fault” in an accident resulting in bodily injury or death to any person.

Grace Period

A period (usually 31 days) after the premium due date, during which an overdue premium may be paid without penalty. The policy remains in force throughout this period.

Guaranteed Insurability

An option that permits the policy holder to buy additional stated amounts of life insurance at stated times in the future without evidence of insurability.

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Health Insurance

A policy that will pay specifies sums for medical expenses or treatments. Health policies can offer many options and vary in their approaches to coverage.

Homeowner Insurance

An elective combination of coverages for the risks of owning a home. Can include losses due to fire, burglary, vandalism, earthquake, and other perils.

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Identity Theft  Identity theft occurs when someone steals your personal information and uses it to open accounts or incur charges without your permission. Thieves can access your personal information in a variety of ways, such as stealing your personal mail, your wallet, or hacking your computer files. The thief then uses your identity to rack up debt in your name or perhaps to issue fake IDs. For more information on identity theft and tips on prevention visit the FTC’s Identity Theft Site.

Incontestable Clause

A policy provision in which the company agrees not to contest the validity of the contract after it has been in force for a certain period of time, usually two years.

Indemnity  Providing indemnity means to financially restore someone after a loss, through payment, repair or replacement.

Insurance Score  An Credit Based Insurance Score (CBIS) is derived from information on your credit report. It is a number that measures likelihood of having an insurance claim—not a measure of credit worthiness. Insurers use CBIS along with a number of other factors, including driving records, claims history, and the type of home or vehicle owned, to evaluate new and renewal auto and homeowner insurance policies.  Most states have rules about how credit information can be used in insurance. Contact your state’s Department of Insurance for the latest information on your state’s rules.



The policyholder – the person(s) protected in case of a loss or claim.


The insurance company.

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Legal Insurance

Prepaid legal insurance coverage plan sold on a group basis.

Liability (Auto)

Coverage for a policyholder’s legal liability resulting from injuries to other persons or damage to their property as a result of an auto accident.

Liability Insurance

Coverage for all sums that the insured becomes legally obligated to pay because of bodily injury or property damage, and sometimes other wrongs, to which an insurance policy applies.  If you are found at fault and hurt someone else in a car accident, Liability coverage can help you pay for bills that include:Emergency aid at the scene  Compensation for loss of income  Funeral expenses  Legal defense fees for anyone listed on your policy  Medical expenses for bodily injury  What are the right limits for me in Spartanburg South Carolina.  Let Select Source Insurance Group help you decide.  More Liability Information  What is Bodily Injury Liability?  Bodily injury liability provides coverage in case you cause an accident in which another person (or people) is hurt. It covers the damages that you’re legally responsible for, and provides a legal defense if someone sues you for damages.  Bodily injury coverage is mandatory in South Carolina, and the minimum limit is $25,000/$50,000.  What does Bodily Injury Liability cover?  Bodily Injury liability limits are typically shown like this: $50,000/$100,000.  This is meant to represent the highest amount per person and per accident that your insurance company would pay if you had to use this insurance.  So for example, if your limit was $100,000/$300,000 and you caused an accident that injured other people, your insurance would pay for up to $100,000 of one person’s medical bills and up to $300,000 for more than one person.  How much coverage do I need?  When choosing your Bodily Injury liability limits, to protect all of your assets, those assets could be at risk if you’re liable for damages that exceed your coverage limit.

Liability & Personal Liability Coverage   For homeowners, this coverage applies if someone is injured or property is damaged and you are to blame. The coverage applies anywhere in the world. When choosing liability coverage for your home, auto, boat, personal watercraft, or RV, consider things like how much money you make and what you own. Your liability coverage should be high enough to protect your belongings if you are sued.

Life Insurance

A policy that will pay a specified sum to beneficiaries upon the death of the insured.


Maximum amount a policy will pay either overall or under a particular coverage.  A limit is the highest amount an insurance company will pay you for a claim that your insurance policy covers. For example, if your limit is $300,000 and the cost of your accident is $315,000, you’ll have to pay the remaining $15,000.  Select Source Insurance Group helps many insured’s with the car insurance limit choices in Spartanburg.  Often see coverage limits that look like this: $100,000/$300,000. The first number, $100,000, is the maximum amount your coverage will pay per person in an accident. The second number, $300,000, is the maximum your car insurance will pay for the total accident.  A higher coverage limit means a higher payout to you on a covered loss. Increasing your limit will also affect the amount of your monthly premium. South Carolina has a minimum limit law.  A Select Source Insurance Agent can help you understand how the limits you choose will impact your insurance costs.  Do you have an adequate liability limit to protect your assets?

Living Expenses  If you can’t live in your home because of a covered loss, your insurance company may pay the necessary increase in living expenses while damage is assessed and your home is repaired or rebuilt.

Loan Value

The amount which can be borrowed at a specified rate of interest from the issuing company by the policyholder, using the value of the policy as collateral. In the event the policyholder dies with the debt partially or fully unpaid, then the amount borrowed plus any interest is deducted from the amount payable.

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Marine Insurance

Coverage for goods in transit and the vehicles of transportation on waterways, land, and air.

Material Misrepresentation

The policyholder / applicant makes a false statement of any material (important) fact on his/her application. For instance, the policyholder provides false information regarding the location where the vehicle is garaged.

Medical Payments (Auto)

Will pay reasonable expenses incurred for necessary medical and /or funeral services because of bodily injury caused by accident and sustained by you or any other person while occupying a covered automobile.  If you were ever in an accident in which you got hurt and had to be taken to the hospital, Medical Payments coverage would be the part of your policy that would pay for the cost of the ambulance ride and certain other medical expenses regardless of who was at fault for the accident. Medical Payments also covers passengers in your car. Family members living with you at the time of the accident also have coverage as pedestrians or when riding in other cars.  What does Medical Payments cover?  If you were involved in an accident and had to be taken to the hospital, where you then spent two nights recovering and those costs added up at $2,500, but you only had $1,000 of Medical Payments coverage, you would be responsible for the remaining costs.  How much coverage do I need?  Medical Payments coverage is not intended as a substitute to health insurance. Coverage limits are typically low and are meant only to help you cover your immediate medical expenses.  What is the right amount for a driver in Spartanburg South Carolina?

Medical Coverage (Home)  Covers medical expenses for guests if they are injured on your property, and in certain cases covers people who are injured off of your property. It does not cover healthcare costs for you or other members of your household.



An incorrect estimate of the insurance premium.

Mortgage Insurance

Life insurance that pays the balance of a mortgage if the mortgagor (insured) dies.

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The cause of a possible loss. For example, fire, theft, or hail.

Personal Property Coverage  Your home is filled with furniture, clothes, sports equipment, and other items that mean a lot to you. This coverage helps repair or replace these items if they are lost, stolen or destroyed as a result of an insured event.


The written contract of insurance.

Policy Limit

The maximum amount a policy will pay, either overall or under a particular coverage.


The amount of money an insurance company charges for insurance coverage.

Premium Financing

A a policyholder contracts with a lender to pay the insurance premium on his/her behalf. The policyholder agrees to repay the lender for the cost of the premium, plus interest and fees.

Pro-Rata Cancellation

When the policy is terminated midterm by the insurance company, the earned premium is calculated only for the period coverage was provided. For example: an annual policy with premium of $1,000 is canceled after 40 days of coverage at the company’s election. The earned premium would be calculated as follows: 40/365 days X $1,000=.110 X $1,000=$110.

Property Damage

Damage to another person’s property. The purpose of liability insurance is to cover property damage to a third party resulting from the negligent or intentional acts of an insured.Property Damage covers you if your car damages someone else’s property. Usually this means damage to someone else’s car, but it could be any property. If you were to accidentally hit someone’s fence, or run into a light post, this coverage would pay to replace it or repair the damage for which you are legally responsible.  Select Source Insurance can help you decide which limits would suit you best.  What does Property Damage Liability cover?  If you have a property damage limit of $50,000, that means that if you cause damage to someone else’s car (or other property) in an accident, The insurance company would provide up to $50,000 to repair or replace it. If the damage were to exceed your limits, you would be responsible for those costs.  What limits are needed in Spartanburg?  How much coverage do I need?  When choosing your Property Damage liability limits, you should consider all of your assets, including your home and future earnings. Why? Because if you don’t have enough coverage to protect all of your assets, those assets could be at risk if you’re liable for damages that exceed your coverage limit.  Also, think about the price of cars and trucks on the road.  Is $50,000, $100,000 or more enough to cover other vehicles or property?  At Select Source Insurance in Spartanburg South Carolina we can help you decide how much coverage you need.


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An estimate of the cost of insurance, based on information supplied to the insurance company by the applicant.

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Replacement Cost

The cost to repair or replace an insured item. Some insurance only pays the actual cash or market value of the item at the time of the loss, not what it would cost to fix or replace it. If you have personal property replacement cost coverage, your insurance will pay the full cost to repair an item or buy a new one once the repairs or purchases have been made.

Replacement Value

The full cost to repair or replace the damaged property with no deduction for depreciation, subject to policy limits and contract provisions.


The restoring of a lapsed policy to full force and effect. The reinstatement may be effective after the cancellation date, creating a lapse of coverage. Some companies require evidence of insurability and payment of past due premiums plus interest.


Usually known as an endorsement, a rider is an amendment to the policy used to add or delete coverage.

Emergency & Roadside Assistance  For auto, boat and personal watercraft, emergency assistance pays for the cost of towing or emergency service. For RVs, it also covers housing and transportation costs if your RV becomes uninhabitable and covers the loss of personal property in your RV. Some policies also provide roadside assistance for motorcycles.

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Scheduled Personal Property Coverage If you have special possessions such as jewelry, art, antiques or collectibles, you may want to talk to your agent about this additional coverage.

Short-Rate Cancellation

When the policy is terminated prior to the expiration date at the policyholder’s request. Earned premium charged would be more than the pro-rata earned premium. Generally, the return premium would be approximately 90 percent of the pro-rata return premium. However, the company may also establish its own short-rate schedule.


A licensed employee of a fire and casualty agent or broker who may act for the agent or broker in some circumstances.

Sprinkler Insurance

Coverage for property damage caused by untimely discharge from an automatic sprinkler system.


An extra charge applied by the insurer. For automobile insurance, a surcharge is usually for accidents or moving violations.


To terminate or cancel a life insurance policy before the maturity date. In the case of a cash value policy, the policyholder may exercise one of the non-forfeiture options at the time of surrender.

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Title Insurance

Coverage for losses if a land title is not free and clear of defects that were unknown when the title insurance was written.

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Umbrella Insurance  Umbrella insurance is the coverage that may kick in when your losses under other insurance policies, such as homeowner’s and auto coverage, have exceeded policy limits.


The process of selecting applicants for insurance and classifying them according to their degrees of insurability so that the appropriate premium rates may be charged. The process includes rejection of unacceptable risks.

Uninsured Motorist Bodily Injury

Will pay you and your passengers for bodily injury cause by a negligent uninsured motorist, a hit-and-run driver, or by a driver whose insurer is insolvent.

Uninsured Motorist Property Damage

Will pay for damages to your automobile, set up to a limit, when caused by a negligent uninsured motorist.

Uninsured/Underinsured Motorist Coverage  Pays for damages associated with bodily injury or death from an accident caused by an uninsured, underinsured or hit-and-run driver, as defined by the law in the jurisdiction where the accident occurred, who is at fault. It also covers you if you are hit as a pedestrian.


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Waiting Period

A period of time set forth in a policy which must pass before some or all coverages begin.

Watercraft, Personal (PWC)  A personal watercraft (PWC) is a recreational watercraft that the rider sits or stands on, rather than inside of, as in a boat. Models have an inboard engine driving a pump jet that has a screw-shaped impeller to create thrust for propulsion and steering.

Watercraft, Physical Damage Coverage   Pays to repair the damage done to your watercraft due to an accident. It also generally pays to repair or replace your watercraft for insured situations such as theft, fire, vandalism or other non-collision damages that occur in or out of the water.

Workers Compensation Insurance

Coverage providing four types of benefits (medical care, death, disability, and rehabilitation) for employee job-related injuries or diseases as a matter of right (without regard to fault).

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Insurance Terms Used in the Area of Sureties and Bonds

A person in custody whose release may be secured by posting bail.


A person or concern having possession of property committed in trust from the owner.

Bid Bond

A guarantee that the contractor will enter into a contract, if it is awarded to him, and furnish such contract bond (sometimes called “performance bond”) as is required by terms thereof.

Court Bonds

All bonds and undertakings required of litigants to enable them to pursue certain remedies of the courts.

Effective Date

The date on which an insurance policy or bond goes into effect, and from which protection is furnished.

Fidelity Bond

An obligation of the insurance company against financial loss caused by the dishonest acts of employees.

Judicial Bond

A bond required in civil and criminal court actions.

Named Schedule Bond

A fidelity bond providing coverage for persons listed or scheduled on the bond.


Broadly, anyone in whose favor an obligation runs. Frequently used in surety bonds, this refers to the person, firm or corporation protected by the bond.


Commonly called “principal,” one bound by an obligation. Under a bond, strictly speaking, both the principal and the surety are obligers.

Power of Attorney

Authority given one person or corporation to act for and obligate another, to the extent laid down in the instrument creating the power.


A person or organization whose obligation are guaranteed by a bond.


An arrangement whereby one party becomes answerable to a third party for the acts of a second party. Customarily an insurance company, the party in a suretyship arrangement who holds himself responsible to one person for the acts of another.

Surety Bond

A bond which the surety agrees to answer to the obligee for the non-performance of the principal (also known as the obligor).


Stated in its simplest terms, suretyship embraces all forms of obligation to pay debts or answer for the default of another.

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