15 Most Common Auto Insurance Terms Explained

 

It’s hard enough trying to shop around to find the best auto insurance in south Florida at the right price. The last thing you need is to be bombarded with long contracts full of terms no one understands. To help navigate the auto insurance world more easily, we give to you the 15 most common auto insurance terms explained.

  1. Binder – Temporary contract used as proof of insurance coverage until permanent policy is received.
  2. Bodily Injury (BI) – Pays for injuries or death to other persons involved in car accident, as long as you are legally at fault. This will also cover legal defense costs if you are sued. Limits and details vary by policy.
  3. Claim – Request by the insured for the insurance company to cover a loss incurred.
  4. Collision Coverage – Pays for damage to your car caused by accident with another car, an object, or as result of a rollover. Depending on the details of your policy this may also extend to a car you are driving but do not own (borrowed) or a rental. Limits and details vary by policy.
  5. Comprehensive Coverage – Pays for damages to your car caused by anything else other than an accident such as fire, flood, vandalism, theft, etc. As with other coverages, limits and details vary by policy.
  6. Declarations Page – Page included in your policy which details your name and address, the time period policy will be in force, description of the vehicle insured, amount of insurance premium and details of coverages you have chosen.
  7. Deductible – The amount you are responsible for paying out of pocket before the insurance pays.
  8. Endorsement – Also known as a “rider,” this is a written agreement attached to the original policy which expands or limits the benefits and / or coverages.
  9. Full Coverage – While this doesn’t actually exist, full coverage is the term used to imply that the insurance policy includes more than just liability coverage.
  10. Gap Insurance – If you have a loan on your car, this type of insurance will pay the difference between the actual cash value of your vehicle and the amount you still owe.
  11. Liability Insurance – If you’re at fault, this type of insurance pays for vehicle or property damage as well as medical costs to others. Limits and details vary by policy.
  12. Medical Payments and Personal Injury Protection – Pays for medical or funeral expenses for yourself, family members, or passengers in your car if they are injured or kill. Limits ad details vary by policy.
  13. Premium – The amount (payment) you are required to make for your insurance policy to remain active.
  14. Property Damage Liability Coverage (PD) – Pays for damages to another person’s property if you are legally responsible for the accident. This type of coverage also pays for legal defense if you are sued. Limits and details vary by policy.
  15. Uninsured / Underinsured Motorist Coverage – Under this term there is bodily injury coverage and property damage coverage. These pay for bodily injury and / or property damage (depending on specific coverage chosen) to you or your passengers if you are involved in an accident with someone who either has no insurance or too little insurance to cover your losses. This coverage also protects you in the case of a hit-and-run. Limits and details vary by policy.

 

Put and end to the confusion of insurance policies once and for all. Contact one of our licensed, professional insurance agents to review your policy and coverages, explore better rates, or purchase additional coverage.

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