Auto Insurance Glossary – H Definitions

Hard Market

A cycle within the insurance market which is characterized by one or more of the following: increasing premium rates (a hardening of rates), a reduced scope of coverage, an increase in the use of exclusions and limitations and a reduction in limits of coverage. A hard market often follows a period of high claims, usually as a result of adverse weather patterns or a substantial loss such as that which occurred on September 11, 2001. Contrasts with soft market.

Hazard

A circumstance which materially increases the probability of the occurrence of an event which can produce loss. For example, an icy road, talking on a cell phone while driving, congested traffic, a broken tail light, driving with an unsecured load and leaving keys in the ignition of an unattended vehicle are all hazards as they can result in events which cause loss. Contrasts with peril which from an insurance perspective is an actual cause of loss, such as a car crash, theft and personal injury. Consequently, a hazard can result in a peril which results in a loss.

Highway Loss Data Institute (HLDI)

A not-for-profit organization sponsored by the U.S. car insurance industry, and an affiliate of the Insurance Institute for Highway Safety. The HLDI analyzes losses according to six specific types of auto insurance coverage, namely collision, comprehensive, property damage, bodily injury protection, personal injury protection and medical payments. These losses are collated with respect to cars, SUVs and motorcycles across all states, and the Institute’s database now comprises more than 150 million vehicles. Its principal purpose is to help consumers make informed car purchasing decisions based on loss statistics and safety features such as electronic stability control and antilock braking systems.

Hired Automobile

A vehicle which is in the state of being temporarily leased, hired, rented or borrowed, or otherwise placed under the temporary control or use of another person or entity for a fee or other consideration. From a business insurance perspective, a hired automobile excludes any vehicle which has been borrowed from an employee or from any member of an employee’s household. Learn how to protect yourself when renting a car.

Hold Harmless Agreement

A provision in a contract which transfers liability from one contracting party to another on the occurrence of a defined event. For example, a car lease may contain a hold harmless clause in which the lessee indemnifies the lessor in the event of any loss caused by the lessee in using the car, or caused by any person using the car with the lessee’s authorization. Such provisions require the contracting party who assumes liability to provide a legal defense to the other party, and to pay any judgments awarded against that party.

Home Office

The corporate headquarters of an insurance company, being the complex in which the principal officers of the company are located.