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Important Terms In Auto Insurance


When you want to buy auto insurance, there are a lot of significant terms which you should look out for. These terms are very vital and you should understand them well. If a policyholder does not know these terms, he or she might be spending a whole lot more on their policy than they should. Or in the end, he or she may not get proper car insurance that they really need.

Comprehensive coverage is the first of these terms. This kind of coverage will protect you a lot when you are involved in an accident and no other driver is liable, including yourself. Examples of things covered by a comprehensive coverage are the so called “acts of God” like hurricanes and typhoons and other more common occurrences like, thefts, floods, fires, falling objects, vandalism and a lot more.

Another concept you should understand is liability and bodily injury. This is a term in your policy that most states in the U.S. look for. It provides coverage for bodily injuries and other physical damages that were caused to you and other people. In the event that you are the one who is at fault, a victim or victims can file a claim against you. Two types of amounts for this kind of coverage are known. The first of this is the amount per person involved in a particular accident. The other type is the maximum amount that is allowable in an accident. The costs vary from state to state.

Collision coverage as its name implies has something to do with the repairs and replacement of vehicle parts when it is involved in a collision. A collision may be with another vehicle or another hard object or structure.

Personal Injury Protection commonly shortened to PIP is another term you should be familiar with. This kind of coverage covers bills in medical services, hospitals, and funeral expenses of an insured driver or passenger. This is without particularity as to who is at fault in the accident. Limits can vary from one state to another.

The final one for this article is uninsured motorist coverage. If you are involved in accidents like hit and run and other related events, you will be protected by this kind of coverage. In addition, your property will also be covered. This is particularly useful when a person does not have enough coverage for damages. Medical expenses, costs of property, and miscellaneous expenses like lost wages are covered here.

Now that you know these terms, take time to find out which one of these you should focus on.