These are the car insurance terms you need to know.
Car Insurance Terms
Car insurance is a type of insurance that covers the cost of damage to your car and the cost of your medical expenses if you are in an accident. There are many different terms associated with car insurance, and it can be difficult to know what they all mean. This article will explain 10 of the most important car insurance terms so that you can be more informed about your coverage.
1. Liability insurance
Liability insurance is the most important type of car insurance. It covers the cost of damage that you cause to other people’s property or to their injuries in an accident. If you are found to be at fault in an accident, your liability insurance will pay for the other driver’s medical bills, property damage, and lost wages.
2. Collision insurance
Collision insurance covers the cost of damage to your own car if you are in an accident. It will pay for the cost of repairs, even if you are at fault in the accident. Collision insurance typically has a deductible, which is the amount of money that you have to pay out of pocket before your insurance company will pay for repairs.
3. Comprehensive insurance
Comprehensive insurance covers the cost of damage to your car that is not caused by a collision. This includes damage caused by things like fire, theft, vandalism, and hail. Comprehensive insurance also typically has a deductible.
4. Uninsured motorist coverage
Uninsured motorist coverage covers the cost of your medical expenses and the cost of damage to your car if you are in an accident with someone who does not have insurance. This is an important coverage to have, as many people on the road do not have insurance.
5. Underinsured motorist coverage
Underinsured motorist coverage is similar to uninsured motorist coverage, but it covers you if you are in an accident with someone who has insurance but their insurance is not enough to cover your damages.
6. Medical payments coverage
Medical payments coverage covers the cost of your medical expenses if you are in an accident, regardless of who is at fault. This is a good coverage to have if you have high medical costs or if you do not have health insurance.
7. Rental reimbursement coverage
Rental reimbursement coverage pays for the cost of a rental car if your car is in the shop for repairs after an accident. This is a good coverage to have if you need a car for work or for other essential purposes.
The deductible is the amount of money that you have to pay out of pocket before your insurance company will pay for repairs or other covered expenses. Deductibles can range from a few hundred dollars to a few thousand dollars.
The premium is the amount of money that you pay for your car insurance policy. The premium is based on a number of factors, including your age, driving record, and the type of car you drive.
10. Claims process
The claims process is the process of filing a claim with your insurance company after you are in an accident. The claims process can be complex, so it is important to understand your rights and responsibilities.
These are just 10 of the most important car insurance terms. By understanding these terms, you can be more informed about your coverage and make sure that you have the right insurance for your needs.
Here are some additional tips for understanding car insurance:
- Read your policy carefully. Your policy will explain your coverage in detail.
- Ask questions. If you don’t understand something about your policy, ask your insurance company for clarification.
- Shop around for quotes. Compare quotes from different insurance companies to get the best price.
- Review your policy annually. Your needs may change over time, so it’s important to review your policy annually to make sure that it still meets your needs.