GLOSSARY OF COMMON TERMS

Adjuster – An adjuster works for the insurance company to evaluate and negotiate insurance claims. 

Arbitration – Arbitration can sometimes be an alternative to a lawsuit.  Arbitration can be required by the terms of a contract, such as an insurance contract, or the parties can agree to arbitrate a claim instead of filing a lawsuit.  Arbitration is binding, meaning decision reached in arbitration is a final decision.  Most often, the arbitrator presiding over the arbitration is a lawyer or a former judge agreed to by the parties. 

Bad Faith –When it comes to your insurance company, your insurance company must put your interests at least on the same level of the insurance company’s interests.   An insurance company acts in bad faith if it puts its interests ahead of your interests. 

Bodily Injury Claims – These are claims for money to compensate you for bodily injury.  These claims can include claims for past and future medical bills, past and future lost wages, pain, suffering, disfigurement, and loss of the quality of life. 

Damages – The harm you have experienced.  Damages include monetary damages, such as medical bills or lost wages, as well as non-economic damages, such as pain and suffering, disfigurement, or loss of the quality of life. 

Declarations Page – This is a part of your insurance contract that lists the policy limits for each type of coverage under your policy.  It’s a good idea to request a copy of your declarations page every time you obtain or renew your insurance policy. 

Insurance Agent – The insurance agent is the salesperson that sells you (or someone else) an insurance policy.  In most cases, the agent has no relationship with the adjuster.  Even though you might have a good relationship with your insurance agent, your insurance agent often can’t help with an insurance claim.   

Liability Claims – Liability claims are the claims asserted against the at-fault driver.  These claims can be resolved through informal settlement negotiations, formal settlement negotiations, arbitration, or a lawsuit. 

Liens – A lien in a personal injury case is a legal interest in the outcome of your case.  There can be many types of liens.  Hospital liens are filed by hospitals for medical bills and other treatment the hospital provided.  Hospital liens, by law, are ranked higher than most other liens.  Other healthcare providers, such as physical therapists, may ask you to sign a lien. Liens have important legal consequences, and it’s important to talk with an attorney before signing one. 

Medicare Set-Aside – if you are eligible for Medicare, or if you will soon be eligible for Medicare, Medicare might ask you or your attorneys to set aside some or all of your recovery to cover future Medicare expenses paid on your behalf.

MedPay Benefits – Med-Pay is an optional insurance coverage through your insurance company that pays for medical bills, up to a specific policy limit.  Many Med-Pay policy limits are $5,000.00, but it’s not uncommon for policies to include higher limits.  Because this is an optional coverage, your auto insurance policy might not have Med-Pay benefits.  It’s important that you or an attorney review the declarations page for your insurance to see what benefits you may be entitled to. 

Primary Coverage – Hospitals or other medical providers might ask for your primary insurance coverage.  If you have health insurance, your health insurance probably is your primary coverage.  Ask your healthcare providers to bill your health insurance company first. 

Property Damage Claims – These claims are for money to repair or replace your vehicle.  Property damage claims do not include claims for medical bills, lost wages, or pain and suffering.  In cases of homeowners’ insurance claims, property damage claims are to repair the damaged part of the home and its contents. 

Secondary Coverage – Your secondary coverage could be your MedPay coverage, if you have it.  Secondary coverage also could be the at-fault driver’s auto insurance policy.  However, in most cases, the at-fault driver’s insurance company won’t pay anything until after the case is settled or after the jury returns a verdict. 

Set-Off – Many insurance policies say that you must set-off any liability recovery from the amount of underinsured motorist benefits you can recover.  For example, if you recover $25 from the at-fault driver, and you have $100 in underinsured motorist benefits, the insurance policy might require you to subtract the $25 from your $100 of available coverage.  However, Colorado law now forbids setoffs in some circumstances.  See C.R.S. §10-4-609. 

Stacking – Stacking is combining policy limits to increase the amount of available insurance coverage.  For example, you might insure two cars through the same insurance company.  Each policy might have $100,000 policy limits for uninsured motorist coverage.  If the policy or policies let you stack coverage, you can combine both of these $100,000 policy limits for a total of $200,000 in uninsured motorist coverage.  However, many auto insurance policies have provisions that say you cannot “stack” coverage. 

Subrogation – Subrogation is your insurance company’s interest in the outcome of your case.  The subrogation right comes from the terms of the insurance policy itself.  The most common form of subrogation in personal injury cases is health insurance subrogation, where your health insurance company may ask for reimbursement for health insurance benefits paid in connection with your claim against someone else.  For example, if your health insurance company paid $10 for an x-ray for a broken arm, and you recovered money from an at-fault driver for your broken arm, your health insurance company may ask you to pay the $10 back. 

Umbrella Coverage – Umbrella coverage is a voluntary form of insurance that some people purchase.  Umbrella coverage is usually separate from an auto policy, and it usually only applies if you first use the limits of other coverage.  In some cases, if the at-fault driver has umbrella coverage, and your claims exceed the at-fault driver’s auto policy limits, you might be able to make a claim against the at-fault driver’s umbrella policy.  In other cases, you might be able to make a claim against your umbrella policy if your claims exceed the at-fault driver’s policy limits and if your claims exceed your underinsured or uninsured motorist policy limits.  Some umbrella policies don’t provide coverage for automobile accidents, so it’s important to check the terms of the policy.   

Underinsured Motorist Benefits (or “UIM” benefits) – Underinsured Motorist Benefits are an optional insurance coverage through your insurance company.  If you purchased these benefits, you are eligible for these benefits if the at-fault driver doesn’t have enough insurance coverage to pay for all of your damages. 

Uninsured Motorist Benefits (or “UM” benefits) - Uninsured Motorist Benefits are an optional form of insurance coverage through your insurance company.  If you purchased these benefits, you are eligible for these benefits if the at-fault driver is uninsured.