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Basic auto insurance terms that

Auto Insurance Terms You Should Know

A glossary of auto insurance terms can really help you understand your policy as you deal with a claim. What does car insurance cover? At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. Our opinions are our own.

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Many companies will give you a discount if you decide to pay it all upfront. The higher the deductible, the lower your premium costs will be. Most of the time, this includes all members of the household who are old enough to drive. Policy Period or Term — This represents the time period for which the insurance policy stays in effect. Typically, the individual found to be at fault or their insurance company will pay for the majority of damages to each vehicle.

Basic auto insurance terms

These can vary from policy to policy and from company to company. Of course, you can raise your limits, which will also raise your premiums.

Types of Car Insurance Coverage Not all car insurance policies are created equal. Essentially, this is required in every state in one form or another. This is often used in place of collision insurance.

This could include damage from events such as hail, wind, flood, fire, vandalism, and theft. It will pay for limited medical and funeral expenses that are incurred due to a car accident.

A glossary of auto insurance terms can really help you understand your policy as you deal with a claim. It can also help you compare car. When you start to consider the various types of auto insurance coverage It does not include all terms and conditions and exclusions of the services described. You pay for car insurance every month and may make a claim or two in time discussing basic car insurance definitions and coverage types.

Uninsured Motorist Coverage UM — If another driver is at fault for an accident that results in injuries or death and does not have auto insurance, your uninsured motorist coverage can help you pay for those expenses.

Covered persons include you, your passengers and relatives living with you. Limits may apply.

While different states mandate different types of insurance and there are several additional options (such as gap insurance) available, most basic auto policies.

Underinsured Motorist Coverage UIM — This type of coverage is basically the same as UM, however it applies when the other driver who is at fault does not have enough insurance to cover the bills. UIM is also subject to the limits that you choose.

Other Terms Here are a few other terms that could affect the premiums and payouts on your car insurance policy. Depreciation — This means that the value of your car becomes less over time due to use.

Glossary of Common Auto Insurance Terms. This basic coverage is called "25/ 50/25" coverage. Loss - The amount an insurance company. Home / Auto Insurance / Glossary Of Auto Insurance Terms . to provide additional coverage for risks other than those covered under the basic policy provisions. Of course, navigating the world of car insurance can be a confusing some of the most basic car insurance definitions so that you can properly.

Your premiums should also decrease as the age of your car increases. Continuously Insured — Like the term states, this means that your vehicle has been insured continuously without any break or lapse in coverage. Take the Day Money Challenge Our Day Money Challenge will help you get out of debt, save more, and take back control of your life.

Start the day money challenge! We hate spam as much as you do. March 22, at 7: September 7, at 9: May 19, at 6: It is usually associated with a no-fault auto insurance system.

19 Car Insurance Terms You Need to Know

This coverage is for when you damage someone else's property with your vehicle. Usually it's someone's car, but it can apply to other property such as buildings, utility poles, fences and garage doors. Insurance is based on the history of loss experience for similar risks. What a driver pays for auto insurance is based in part on past experience by that company with drivers categorized by similar factors such as age, gender, marital status, driving record and make and model of car.

The insurance industry is state regulated.

Auto Insurance Glossary of Terms

State insurance laws are administered by insurance departments whose job includes approval of rates and policy forms, investigation of company practices, review of annual financial statements, periodic examination of books and liquidation of insolvent insurers see McCarran-Ferguson.

In an insurance contract, a third party is anyone other than the policyholder and the family members covered under the insurance policy.

The policyholder is the first party. The insurance company is the second party in the contract. Anyone else is a third party. A cutoff point, which, if met, allows the injured person to file a lawsuit to attempt to recover damages for bodily injury, such as "pain and suffering," from the driver who caused the accident.

10 common car insurance terms every consumer should know because they appear on your premiums and explain your insurance rates. But, you need to at least understand the basic auto insurance terms because they spell This is a general term that covers bodily injury (BI) liability and property. Getting basic car insurance is probably your top priority when buying a vehicle. Not everyone knows all the car insurance terms and lingo. This is what protects you when you injure someone in a car accident and or.

A wrongful act resulting in damage or injury, on which a civil action can be based. This does not include breach of contract. It pays up to the coverage limit the insured person and other passengers in the vehicle when they're injured as the result of an accident where the at-fault driver is uninsured, underinsured or a hit-and-run.

This also comes in a second form - UMPD - to cover damage to your vehicle if hit by an uninsured or underinsured driver. However, most people do not purchase the second form because they carry collision and comprehensive coverage.

Verbal or Descriptive Threshold. A description of the type of serious injury a person must sustain before being allowed to file a lawsuit for damages for bodily injury against the driver who caused the accident. See monetary threshold. Your car insurance is really six separate policies—some are required, others optional—carefully weigh your risks when buying protection for you and your family. Auto Insurance Glossary of Terms If you feel like you need to take a foreign language course to "speak insurance" don't worry, you're not alone!

Auto Insurance Terms Explained - Definitions You Should Know

Here is a translation of some basic insurance lingo: Collision Coverage Optional coverage for when your car is damaged as a result of colliding with another object—a brick wall, for example, or a rollover.

Comprehensive Coverage Optional coverage for when your car is stolen or damaged in ways that don't involve a collision. Declarations Page "Dec Page" The first page of the insurance policy that generally includes your name, address, the insured property, its location and description, the policy period how long the coverage will be in forcethe amount of the insurance coverage, the premiums and additional specific information provided by the insured.

Economic Benefits Tangible, out-of-pocket expenses, such as medical expenses, rehabilitation expenses, lost wages and essential services. Financial Responsibility Law Typically, this refers to the law that requires motorists to have auto insurance, however most states also permit a bond or cash deposit as evidence of the ability to pay for negligence in causing losses to others from the operation of a motor vehicle.

McCarran-Ferguson Enacted by Congress inthis law grants authority to the states to tax and regulate the business of insurance see regulation. Medical Payments Coverage MP or Med Pay This coverage usually optional pays the doctor, hospital bills, and funeral expenses for injuries to you and the passengers in your car, regardless of who causes the accident, up to the policy limits.

Monetary Threshold In some "no-fault" states, a dollar amount for medical and rehab expenses that must be reached in order to file a lawsuit for damages for non-economic damages i.

Non-Economic Benefits Intangible benefits, such as pain and suffering, inconvenience, emotional stress, impairment of quality of life, loss of consortium, etc.

Personal Injury Protection PIP This a package of first-party medical benefits that provides broad protection for medical costs, lost wages, loss of essential services normally provided by the injured person i. Property Damage Liability PD This coverage is for when you damage someone else's property with your vehicle.

Regulation The insurance industry is state regulated. Third Party In an insurance contract, a third party is anyone other than the policyholder and the family members covered under the insurance policy. Threshold A cutoff point, which, if met, allows the injured person to file a lawsuit to attempt to recover damages for bodily injury, such as "pain and suffering," from the driver who caused the accident.

Tort A wrongful act resulting in damage or injury, on which a civil action can be based. Verbal or Descriptive Threshold A description of the type of serious injury a person must sustain before being allowed to file a lawsuit for damages for bodily injury against the driver who caused the accident.

3 comments

  1. Tygora

    It is a pity, that now I can not express - there is no free time. I will be released - I will necessarily express the opinion on this question.

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