What car insurance terms actually mean
We know that the insurance terminology is a little confusing. The last thing we want to do is learn these terms because that means you’re either, paying a bill or have had an incident/accident but at the same time they’re important to know.
Here are a few of the most frequently used terms you may see on your policy:
- Collision Insurance: This is the part of the insurance that covers your vehicle if you’re in an accident. Furthermore this is what is used when an accident is “your fault”. Typically in an accident if someone let’s say, hits you from behind while you were stopped at a light, the person who hit you would need collision to fix THEIR vehicle.
- Deductible: This term you will hear if you get into an accident and you’ll remember it. Why? Because it’s the portion of the repair that you are liable to pay for. Think about it as your medical copay. Depending on how high or low you set your deductible, it will reflect the price of your premium payment to the insurance company. Most people opt for a high deductible. The problem is when things happen, one thousand or two thousand dollars are a lot to spend on a whim. Five hundred is the most common deductible, being as it still keeps the premium low and is manageable when things go wrong.
- Liability Insurance: This is the most important insurance coverage. Why? Because this is the insurance you absolutely must have in the majority of the states in the United States. This is the coverage that covers damages to the other person’s property in the case of a collision or incident.
- Comprehensive Insurance: This one covers most things that can happen to your vehicle that doesn’t involve a collision. If your car is parked under a tree in a storm and a branch falls on it, this would be comprehensive. If your neighbour’s kid hits your vehicle with a baseball while playing catch, this would be comprehensive. Lastly if your vehicle is stolen or broken into, this would also fall under this coverage. The deductible can be the same as collision or can be adjusted differently. Meaning, the collision deductible can be $500 while comprehensive can be $1000 if you would like.
- Bodily injury liability: This will cover the injuries that you cause in an accident. People don’t realize that most medical billing will go through your vehicle insurance and not your medical coverage. Confusing, we know.
- Uninsured/underinsured motorist coverage: If someone hits you and doesn’t have coverage or doesn’t have enough liability insurance to cover all the damages, this will pick up the difference. Not all states make this one obligatory, check with your agent for your state’s regulations.
- Personal injury protection: Unfortunately, sometimes it’s not just us we need to worry about in an accident. This covers the passengers in the vehicle that were possibly injured by the accident.
If you have any further questions about insurance terminology or which insurance you will need, please give us a call and we would be more than happy to explain it. Misner Auto Body has been in business for over 35 years and we’ve seen our share of insurance claims.