By Madeline Klein on April 27, 2017 in Insurance Basics
Who's up for another round of un-complicating auto insurance terms? If you missed parts one, two or three, go ahead and give 'em a look when you get a chance. For now, let's dive into three new terms!
Transportation Network Company (TNC): A company that connects drivers, who drive their own personal vehicles, with passengers through a mobile app or website. Consider non-taxi companies (like Uber or Lyft) that coordinate all of the details of the ride including driver, pick up location and fare rate. The trendier term for a TNC is ridesharing, though some prefer ridesourcing, since the driver and passenger don't technically "share" the same destination.
Direct Loss: Any physical or financial loss (including injuries), that is an immediate result of an accident, disaster or other incident. It's when you can clearly define a cause (like an accident) and effect (damaged vehicle) without any broken chains or extra influences. Say a hail storm comes through town and cracks your windshield. A direct loss would be how much it costs to replace your windshield, while a consequential loss (which we defined in part three) would be the cost of using Uber while your car is being fixed.
Financial Responsibility Law: A law requiring a person to prove he or she can afford to pay for damages resulting from an auto accident, before he or she can own, use or allow others to use a vehicle. There are several ways a person can go about proving they have enough money, but the most common way is to purchase a car insurance policy, since most state minimum requirements satisfy the law. Other options are, according to DMV.org, posting a surety bond, keeping a cash deposit or filing a government bond with your state.
That's it for this round! Have any terms holding you up? Let us know on Facebook or Twitter.