Are you having problems in understanding what auto insurance companies tell you? Can’t distinguish what portion of your auto insurance company they will pay for? Fret not, we’ll gathered together the most commonly used terms in insurance, categorized from A to V. Continue reading below to know more about it.
Accident: An unforeseen event that harms person(s), property and/or automobiles.
Accident report form: A detailed report about what happened in an accident.
Agent: The trained professional who is licensed to sell auto insurance policies.
At fault: The amount of money determined needed to pay for the damages you were at fault.
Auto Insurance Score: It determines the rates for an auto insurance policy.
Automobile Insurance: An insurance policy, specifically for automobiles.
Binder: A provisional policy agreement made while waiting for a official permanent policy.
Bodily Injury Liability Coverage: What you pay for in damages for a person’s injury or death.
Claim: A formal request given to the insurance company for them to reimburse expenses or damages.
Claims Adjuster: A person that investigates the loss or damage in an accident and determines how much money will the insurer can claim.
Collision Coverage: Part of the auto insurance that pays for damages with your car colliding with another car or object.
Comprehensive Coverage: Part of the auto insurance that pays for damages with your car not caused by collision but by other things such as flood, theft or fire.
Contract: A contract is an agreement between the policy holder and the insurance company. It is also called the insurance policy.
Covered loss or Coverage: What the auto insurance company pays for under the coverage of your contract.
Declarations Page or Dec Page: The part of the contract that provides specific information including the insurer’s basic info, the effective dates and the rates.
Deductible: The amount paid by the insured before the auto insurance company pays a claim.
Endorsement: Any written change made to the policy.
Exclusion: A part of the contract that states everything not covered in the policy.
Gap Insurance: If a rented car gets destroyed or stolen, it covers the amount of the vehicle minus the loan amount.
High Risk Driver: An insurance company can mark a person as a high risk driver if he or she has numerous traffic violations, which will be considered ineligible for a coverage in the future.
Insured: A person covered by a insurance contract.
Insurer: The provider of the insurance, in this case, the auto insurance company.
Liability insurance: The coverage of the amount that an insured person needs to pay when proven at fault in an accident.
Limit: The maximum amount that an auto insurance company will pay.
Medical Payments Coverage or Personal Injury Protection (PIP): The coverage of medical expenses in an accident.
Motor vehicle report: Your driving record that states the vehicles in an accident that you were involved in.
No-Fault Insurance: Depending on your state, your auto insurance company will pay automatically for any costs in an accident.
Premium: The amount paid in installments for an insurance policy.
Quotation (also called auto insurance quotes): The estimated amount of the insurance cost.
Risk: The chance of loss paid in an auto policy.
Surcharge: Amount added to your insurance policy if you were proven to be at fault.
Total Loss: The assessment of a car or property that has too much damage that repairing it would cost the same as the actual value.
Uninsured (UM) and Underinsured Motorist (UIM) Coverage: The amount paid if an owner or driver of a vehicle is not insured but is accountable for an accident.
Vehicle Identification Number (VIN) also called a chassis number: It is a specific number used to identify the owner of automobiles once registered.
The above is just a list of common terms used by car insurance companies. Make sure to shop around for the best insurance plan for your needs. Car insurance can generally be inexpensive if you choose the basic level. You can always upgrade your coverage at a later time.
If you are a car owner, here are the most important coverages which should be included in your auto insurance:
- Comprehensive Coverage
- Collision Coverage
- Property Damage Coverage
- Natural catastrophes such as earthquakes, flash floods, tornadoes
- Damage resulting from an animal
- Damage resulting from a falling object
- Broken windows
- PIP or Medical Payments Coverage
- Uninsured Motorist Coverage
Every auto insurer has different coverages and policies. Before selecting one speak to an auto insurance agent that can advise you on what type of insurance is right for you.