9 Car Insurance Terminology Everyone Should Know

Auto insurance is one of the most important insurance policies that you need to have. Your car is an asset and as such, you should have it financially covered, especially for emergency situations like accidents or liability for damage to someone else’s property or causing physical injury. In such cases, your insurance will cover all the expenses required to remedy the situation. Just like home insurance in Palm City, car insurance is also equally important. To help you understand auto insurance better, we have created a list of auto insurance terminologies. This will give you a clear idea of what the common car insurance terms mean and thus a clear understanding of what is involved in an auto insurance policy.

At-Fault Accident

This is the type of auto accident that you cause either fully or partially. In case of an at-fault accident, you are required to pay the chosen cost limit for the other individual’s injury and property damages as well as your legal defense charges in case you are sued. Liability insurance usually covers all these expenses, so to protect yourself from such financial hurdles it is best to purchase auto insurance with liability coverage.

Agreed Value

This is the value of your vehicle that both you and the insurance provider agree upon so that they can set up a limit for compensation in case of a mishap or damage to your vehicle. This value remains the same until there is a renewal of the policy.

Collision Coverage

This is optional coverage that you can buy with your vehicle insurance and compensates for the financial losses when your car collides with an object, for example, a light post or a brick wall. This policy also holds good if you run over a pothole that severely damages your car. However, this policy only applies to your car and doesn’t cover the property that the car collided with that is included in property damage liability coverage.

Deductible

The deductible is the amount of money that is subtracted from your insurance payout and the amount you are responsible for paying. Say, for example, if you have a $2000 payout for your damage to the car, accident, collision, etc and you pay a deductible of $500 then the rest $1500 will be paid by the insurance company. Liability coverages do not have any deductible.

Auto Insurance Claim

An auto insurance claim is the payment request you make to the insurance company in the event that your car has been in an accident, collision, or other damages. The insurance provider will then compensate for the loss, damage, or injury after examining the situation. 

Claim Repairs

Claim repairs are the vehicle repair conducted after the insurance claim has been made. The repairs are usually conducted by a supplier preferred by the insurance company. In case the repair is made by any other supplier, they need to be a legitimate repair service and the provider for auto insurance in Palm City may also require competitive quotes from the same.

Comprehensive Coverage

This is optional coverage that covers the expenses in the event where your car is either stolen or damaged in ways that are not included in the auto insurance coverage. However, comprehensive coverage includes the damages caused by hail, fire, vandalism, flood, earthquake, damage by animals, and falling objects. 

Declaration Page

This is the page in your insurance policy that lists all the important details like your address, driver’s insured by the policy, your car’s VIN, your liability limits as well as other coverages included in the policy. 

Uninsured Motorist Coverage

This insurance is helpful when your vehicle or you are hit by a driver who lacks insurance or has minimum insurance. The uninsured or underinsured bodily damage coverage pays for all your injuries and your passenger’s injuries sustained in the accident while the uninsured or underinsured motorist property damage pays for all the damages caused to your vehicle in the accident.