The auto insurance policy you choose can be a lifesaver if you are involved in an accident, whether you or another driver was responsible. The amount you will pay out of pocket for repairs, whether your policy will pay for a rental car while it is being repaired, and if you are covered when traveling and driving a rental come into play when making a decision. These details are all found in the fine print of an auto insurance policy.
Choosing the best car insurance can be intimidating if you are unfamiliar with the legal language and terms. The best way to ensure you make the right choice is to understand the terms of a car insurance contract.
Common Car Insurance Terms Defined
You certainly do not need to become a car insurance expert to understand your policy, but it can be helpful to understand the meaning of some standard terms. Here are some car insurance terms that could be helpful to know:
Automotive liability insurance: If you were to get involved in an accident that caused physical or property damage to others, automotive liability insurance offers protection in cases in which you are being held legally responsible. Collision coverage: If your car sustains damage from hitting another vehicle or object, this coverage covers some of the cost of repairs. This insurance is required when leasing or financing a vehicle. Comprehensive coverage: If any item is stolen from your vehicle or you sustained damage that was not caused by an accident or collision, comprehensive coverage could help cover the damages. Deductible: The deductible refers to your out-of-pocket expenses, which you agree to pay. The higher the deductive, the lower the cost of premiums. Personal injury protection (PIP): PIP encompasses broad protection for other risks, including medical costs and lost wages, no matter which driver was determined to be at fault. Property damage liability (PD): PD covers you when you damage another individual’s property with your vehicle. Generally, this refers to another’s vehicle but could be any type of property, including buildings, fences, etc. Threshold: Refers to the cutoff point that, if met, gives the injured person the opportunity to file a claim against the at-fault driver to recover damages for bodily injury. Uninsured/underinsured motorist coverage (UM): If you were involved in a hit-and-run accident in an accident in which the at-fault driver was uninsured or underinsured, UM could pay you and other passengers in your vehicle for any damages or injuries sustained. Third party: In the world of insurance, a third party refers to anyone other than the policyholder or family members covered.
Familiarizing yourself with these terms can be helpful as you review your options or acquaint yourself with the policy you purchase.
Protect Yourself with the Right Auto Insurance Policy
If you are shopping for new car insurance, our insurance agents will work with you to find the best coverage at the most affordable rates. We know it can be confusing to be confident you are choosing the best option. Our local agents can work with you to understand your needs and budget and find the best auto insurance at the best rates. Connect with us today for the personalized service you can rely on.
September is Life Insurance Awareness Month.
It’s the perfect time to remind ourselves to plan ahead for the ones we love.