Auto Insurance Terms Every Driver Should Understand


We have been told repeatedly that we need to purchase an ample auto insurance coverage just to make sure that there is enough money to cover the cost during an accident. Along with that are the list of jargon terms that we often take for granted.

Lucky for you, because today, we’re going to discuss about some auto insurance terms that every driver should know what it means and what it does. Few of these terms include comprehensive, uninsured, collision, underinsured motorist coverage, personal injury protection, and so on. Understanding these basic terms will significantly reduce your risk during a car accident.

If you drive in the United States, you will likely encounter the term minimum requirements on your auto insurance coverage. Each state has set its own minimum, which means that if you live in Nevada, you are required to have 15/30/10 coverage, while those living in Indiana are required to have at least 25/50/10 policy. What do these numbers mean? These amounts refer to the state’s minimum coverage requirement. It’s mandatory as stipulated in your state’s insurance laws.

In the case of Nevada (15/30/10), 15 and 30 are the maximum amounts that will be used to take care of bodily injuries for one accident, while 10 is the maximum amount to cover property damages. Now, if any of these amounts becomes insufficient to cover for its intended cause, the policyholder is legally obliged to shoulder the excess amount.

PIP or personal injury protection is the policy that will take care of the amount due for injuries regardless of who is the responsible driver. This protection is also used to treat or cover any passengers caught in the accident. PIP protection also extends by taking care of loss wages, rehabilitation and medical expenses, as well as funeral costs and benefits to the surviving party.

Next, we have the comprehensive coverage, which pays the damages beyond collision. This will cover the cost of the accident due to vandalism, fire, hail, animals, broken glass, theft, and so on. If you hit a deer while driving and your vehicle sustained some damages, comprehensive coverage will take care of the cost the moment you send the car to the repair shop.

Accidents involving collision are covered by the collision policy. Collision coverage is not only limited to cars but also include trees, guard rails, etc. Speak to your insurance agent to see if you can receive reimbursement for repair costs, even if you are the at-fault driver. If you are not the responsible driver, your insurance company will attempt to recover the reimbursement from the insurance company of the other party.

Then we have the uninsured car insurance coverage, which supposedly protects you and your family from uninsured drivers. This will also cover hit-and-run accidents. Without this policy, you end up absorbing all the expenses resulting from this type of accident.

Underinsured protection coverage, as the name implies, protects you from drivers who have