Auto Insurance Glossary – E Definitions
Effective Date
The date on which the provisions in an insurance policy become effective, including coverage provisions.
Employee Hired Autos Endorsement
A business auto insurance endorsement which provides coverage to employees who hire or rent cars in their own names, but who do so as employees carrying on the business of their employer. The endorsement provides liability and physical damage coverage as though the car had been rented by the employer directly. It is only available as an endorsement if the policy provides liability and physical damage coverage for the employer for hired autos.
Employer’s Non-ownership Liability Insurance
Liability coverage provided to an employer which arises from employees using their own cars on company business.
Endorsement
An additional set of provisions added to an insurance policy and which change its provisions, usually (but not necessarily) with the effect of extending the policy’s type, amount or scope of coverage. Also (decreasingly) referred to as a rider.
Estoppel
A legal principle in which a party loses a right prescribed in a contract or at law, if the party has acted in such a way as to lead another party to believe that the right does not exist. For example, an insurer may be estopped from voiding an insurance policy on the basis that an insured breached one of the terms of the policy, if the insurer had previously allowed the insured to breach the same policy term. That is, if an insurer leads an insured to believe that a breach of a particular policy term will not result in the policy being voided, then the insurer is not able at a later date to void the policy on the basis that the term has been breached again.
Exclusion
A provision in an insurance policy which stipulates that no coverage applies for specified causes of loss, for losses which occur to specified property or persons, or if other conditions detailed in the provision are met.
Exclusive Agency System
A system operated by an insurance company for the distribution of its insurance policies, whereby the agents who sell those policies represent that insurer only, or insurers which are part of the same group to which that insurance company belongs. See also captive agent and independent agent.
Exemplary Damages
Damages which are awarded in a lawsuit in order to punish a defendant for an act committed, and which are additional to any damages awarded to compensate the plaintiff. Exemplary damages presuppose either intent or culpable negligence in respect of the offending act. Also referred to as punitive damages. See also compensatory damages.
Expected or Intended
With respect to auto insurance, a policy exclusion for personal injury or property damage which is either expected or intended by the insured. The exclusion may not apply if the insured intentionally acts, with reasonable force, in the defense of the subject person or property.
Expiration
The date on which the provisions of an insurance policy terminate. The date of expiration is usually, but not necessarily, specified in the insurance policy itself. For example, an expiration date which is specified in an insurance policy could subsequently be amended by agreement between the parties, with the amended date being specified in a document other than the insurance policy.
Express Authority
Authority which is expressly granted to an agent under an agency agreement with an insurer. See also implied authority.
Extended Non-Owner Liability
An endorsement to a personal auto insurance policy which provides liability coverage to persons named in the endorsement. When operative, the endorsement provides the insured with coverage for non-owned autos, and for the use of vehicles to carry people or property for reward.
