An alphabetical glossary of pertinent food truck insurance terms:

ACTUAL CASH VALUE (ACV): The cost of replacing or restoring property at prices prevailing at the time and place of the loss, less depreciation, however caused. Another definition: the sum of money required to replace property less depreciation, which includes physical wear and tear, and obsolescence.

ADDITIONAL INSURED: One who is protected by an insurance policy other than the named insured. Examples: In automobile insurance, one who drives the insured’s car with his consent ordinarily is protected. In property insurance, this might be a co-owner, mortgagee, or lien holder.

BINDER: A written or oral contract issued temporarily to place insurance in force when it is not possible to issue a new policy or endorse the existing policy immediately. A binder is subject to the premium and all the terms of the policy to be issued.

BODILY INJURY COVERAGE: This coverage, often called "public liability insurance", protects an insured against legal liability for injury to the person of another arising from an accident.

BROKER OF RECORD (BOR): If you are happy with your insurance policy, but not your agent, you can change via a broker or record or an agent of record letter. Insure My Food Truck works with the top insurance carriers that offer food truck insurance. If you would like us to service your account chances are we can! Contact us to find out.

CARRIER: The insurance company or the one who agrees to pay the losses. The carrier may be organized as a company, either stock, mutual, or reciprocal, or as an association of underwriters such as Lloyds.

COINSURANCE PROVISION: An insurance provision for property coverage in which the policy holder must carry an amount of insurance that is at least equal to a set percentage of the value of the property in order to receive full payment of a loss.

COLLISION COVERAGE:  Covers loss to the insured person’s auto caused by its collision with another vehicle or object.

COMPREHENSIVE COVERAGE (physical damage other than collision):  Pays for damage to or loss of your automobile from causes other than accidents.  These include hail, vandalism, flood, fire, and theft.

CONTENTS: A term used to refer to the business personal property contained in a building or within a food truck. Typically movable property in nature, but can also be attached kitchen equipment and modifications to the truck depending on the carrier's definition.

DECLARATIONS PAGE:  The page in a policy that shows the name and address of the insurer, the period of time a policy is in force, the amount of the premium, and the amount of coverage.

DEDUCTIBLE: The amount an insured person must pay before the insurance company pays the remainder of each covered loss, up to the policy limits.

DEPRECIATION: A decrease in the value of property over a period of time due to wear and tear or obsolescence. Depreciation is used to determine the actual cash value of property at time of loss. (See ACTUAL CASH VALUE.)

ENDORSEMENT: A written agreement attached to a policy expanding or limiting the benefits otherwise payable under the policy.  Also called a “rider.”

EXCESS LIABILITY POLICY:  A policy that provides additional limits in excess of an underlying liability policy.

EXCLUSIONS:  Items or conditions that are not covered by the general insurance contract.

GAP INSURANCE:  Insurance that pays the difference between the actual cash value of a vehicle and the amount still to be paid on the loan.  Some gap policies may also cover the amount of the deductible.

GENERAL LIABILITY: A broad term meaning liability insurance, other than automobile, written to cover personal, professional and commercial risks. In respect to commercial liability, it protects business owners and operators from exposures such as liability arising from accidents resulting from the insured’s premises or operations; products sold by the insured; operations completed by the insured, and contractual liability.

GROSS VEHICLE WEIGHT (GVW):  The weight specified by a manufacturer for the maximum total loaded weight of a single vehicle.

HIRED AUTO LIABLITY:  Covers the liability arising from the use of rented or borrowed vehicles. The premium is based on the actual rental expenditures and can be added to a commercial auto policy on an "if any" basis generally for less than $50.

LAPSE: The termination or discontinuance of a policy due to non-payment of a premium.

MEDICAL PAYMENTS: Optional coverage under an auto policy to pay for medical expenses for bodily injury caused by an auto accident, regardless of fault.  Coverage for persons other than the named insured and his or her family members is typically restricted to circumstances occurring while they are occupants of the insured auto.

MVR – MOTOR VEHICLE RECORD:  A motor vehicle record contains information obtained from an individual’s driver license application, abstracts of convictions and accidents.

NON-OWNED AUTOMOBILE LIABILITY:  In commercial auto policies, coverage for autos that are used in connection with the named insured’s business but are neither owned, leased, hired, rented or borrowed by the named insured.  The term specifically applies to vehicles owned by employees and used for company business. Coverage applies to liability only, not physical damage to non-owned vehicles. 

OCCURRENCE:  An event that results in an insured loss.  In some lines of business, such as liability, an occurrence is distinguished from an accident in that the loss doesn’t have to be sudden and fortuitous and can result from continuous or repeated exposure which results in bodily injury or property damage neither expected nor intended by the insured.

PERSONAL INJURY:  A General Liability coverage for insurable offenses that cause harm, other than bodily injury, such as false arrest, detention or imprisonment, malicious prosecution, wrongful eviction, slander, libel and invasion of privacy.

PERSONAL INJURY PROTECTION (PIP):  An automobile insurance coverage mandated by law in some states.  The statues typically require insurers to provide or offer to provide first-party benefits for medical expenses, loss of income, funeral expenses and similar expenses without regard to fault. 

PERSONAL PROPERTY: This type of property is usually movable and easily transportable. On the other hand, real property generally is considered to be immovable such as land and things affixed to it. A rule of thumb definition for personal property is "everything other than real property."

PROPERTY DAMAGE:  In the general liability policy, a physical injury to property, resulting in the loss of use.

PROPERTY INSURANCE:  First-party insurance for real and personal property against physical loss or damage.

PRO RATA CANCELLATION:  The cancellation of an insurance policy with the return premium being the full proportion of premium for the unexpired term of the policy, without penalty for early cancellation.

REINSTATEMENT:  Putting a lapsed policy back in force by producing satisfactory evidence of insurability and paying any past-due premiums required.

REPLACEMENT COST: The dollar amount needed to replace damaged personal property or dwelling property without deducting for depreciation but limited by the maximum dollar amount shown on the declarations page of the policy.

RETURN PREMIUM:  A portion of the premium returned to a policy owner as a result of cancellation, rate adjustment, or a calculation that an advance premium was in excess of the actual premium.

SHORT TERM CANCELLATION:  Cancellation of an insurance policy prior to the expiration date in which a penalty in the form of a less than full pro-rata premium refund is allowed.

STATED AMOUNT VALUATION: This valuation method states that in case of loss the most your insurance company will pay is the least of the following amounts minus any applicable deductible shown in your auto policy schedule:

1. The actual cash value of your damaged or stolen auto at the time of loss;
2. The cost of repairing or replacing your damaged or stolen auto with an auto of like kind and quality; or
3. The stated amount listed for that auto as shown in your policy schedule.      

TOTAL LOSS:  A loss of sufficient size about which it can be said there is no value left.  The complete destruction of the property.  The term also is used to mean a loss requiring the maximum amount a policy will pay.

TOWING AND LABOR COVERAGE:  Auto insurance coverage that pays for towing charges when a car can’t be driven.  Also pays labor charges, such as changing a flat tire, at the place where the car broke down.

UNDERWRITER:  The person trained in evaluating risks, deciding whether to accept or reject an application for a policy, and determining rates and coverages for risks.

UNINSURED/UNDERINSURED MOTORIST (UM/UIM) COVERAGE:  Auto insurance coverage that pays for the policyholder’s injuries and, in some states, property damage caused by a hit-and-run driver or a motorist without liability insurance.  It will also pay when medical and car repair bills are higher than the other driver’s liability coverage.

UMBRELLA POLICY:  Coverage for losses above the limit of an underlying policy or policies such as general liability and auto insurance.

VIN (VEHICLE IDENTIFICATION NUMBER):  A 17-digit alpha-numeric code that provides valuable information concerning the vehicle’s serial number, make, model, options, and year in official records (like a Social Security number for your car).

WORKER’S COMPENSATION: A system (established under state law) which provides payments to employees who are injured in the course of employment, irrespective of fault.