Auto Insurance Glossary – D Definitions

Declarations

The part of an insurance policy which contains information relating specifically to the insured, such as name, address, the insured vehicle, its location, the policy period, policy limits, the amount of insurance coverage, the premium amount and any other relevant details. It is also referred to in terms of a ‘page’, for example ‘dec page’ and ‘information page’.

Declination

The rejection by an insurer of an application for insurance.

Deductible

The dollar amount of an insured loss for which the insurer is not liable, and which is therefore borne by the insured. The amount is ‘deducted’ from any claim payment to the insured. An insurance policy may specify more than one deductible, depending on the type of loss insured. Learn more about deductibles.

Default

A breach of the terms of an insurance policy, usually by an insured, whether intentional or otherwise. For example, an insured is said to be ‘in default’ if a premium is not paid when due.

Depreciation

In relation to auto insurance, the decrease in value of a car over time, principally due to wear and tear, age and obsolescence.

Designated Insured Endorsement

An endorsement which can be attached to commercial auto insurance policies to provide coverage to named (designated) persons or entities.

Drive-In Claim Service

A facility maintained by an auto insurer into which a policyholder may drive a car in order to have damage to it assessed, and arrangements made for the car to be repaired or a claim payment made.

Drop-Down Provision

A clause within umbrella insurance policies which provides that coverage ‘drops down’ to meet the limit of coverage under a primary policy, even if that limit is nil. The umbrella coverage consequently acts as primary coverage, and in that circumstance it may apply the terms in the primary policy or its own terms.

Dual Agency

A circumstance in which an individual acts for two parties in the same transaction, such as acting as an agent for an auto insurance company while acting as a broker for an insured.

Duty to Defend

The duty of an insurer to provide a defense to an insured for liability claims made under an insurance policy. The duty comes into effect at the point at which coverage under the policy either applies or potentially applies, irrespective of whether it is subsequently found that coverage does not in fact apply. As a consequence, an insurer’s duty to defend is wider than its duty to indemnify an insured.