12 Car Insurance Terms You Should Know
Is your car insurance agent mumbling some mystical words that you find hard to decipher? Learn new car insurance terms and be more confident the next time you talk with your insurance provider.
Car Insurance Coverage
Check out any car insurance FAQ, and you’ll know that this is the amount of risk or liability that you are covered through your car insurance company. Depending on the extent of your coverage, you can be covered for bodily injury, collision, property damage, and more. Let’s take a look at this scenario:
You were driving your car ala Dominic Toretto in Fast and Furious when suddenly a car appeared out of nowhere. You tried to hit the brake but it was all too late; and like many scenes from the movie, you hit the car and injured the passengers who were in it in a nasty collision. A few minutes later, you heard sirens coming toward you and saw the flashing lights of the police car followed by an ambulance. You closed your eyes and prayed to God that your auto insurance policy is sufficient to cover you and the people in the accident.
12 Car Insurance Terms You Should Know Before Buying
To help you understand your benefits, let’s look at these car insurance terms.
Car insurance term #1: Accident report form
Also known as the policy report, this report contains critical information about the vehicular accident such as parties involved, citations, and circumstances.
Car insurance term #2: At fault
Among car insurance terms, “at fault” means the degree at which you caused/contributed to the collision. This determines who will pay for the damage and how much will be paid.
Car insurance term #3: Bodily Injury Liability Coverage (BI)
According to our car insurance FAQ, this coverage kicks in when you are found to be “at fault”, and if you have this coverage, it can help you pay for the costs incurred for the treatment of injuries and/or death of people in the accident other than you. This car insurance coverage will also help pay for your legal defense if you get sued.
Car insurance term #4: Collision Coverage
When you overturned your vehicle in an accident or collided with another vehicle (such as the scenario above), your car insurance provider will pay for the repair of your vehicle.
Car insurance term #5: Comprehensive Coverage
This car insurance coverage helps pay for the repair of any damage that happens to your vehicle for a reason that’s not a collision. These can be damages done by: animals, vandalism, fire, theft, etc. A comprehensive insurance coverage will NOT pay for damages that happen in an accident. That’s one of the basic car insurance terms you should know before buying a policy.
Car insurance term #6: Covered loss
Car insurance term #7: Claim
As part of our list of car insurance terms, this one is the most asked. After the accident you will have to submit a claim to your car insurance company. A claim is a request to the company to pay for the repairs and reimburse your expenses.
Car insurance term #8: Claims adjuster
Once you filed a claim, a claims adjuster will investigate and settle the claims to make sure that everyone involved will receive fair compensation.
Car insurance term #9: Deductible
After the accident, you will have your car checked and repaired. Car insurance companies usually ask for a deductible before you can have your car repaired. A deductible is the amount of money that you contribute out of pocket for the repairs. The higher the deductible, the lower the premium.
Car insurance term #10: Premium
This is the amount of money you pay for your car insurance coverage to keep it in force. A premium can be paid monthly, quarterly, or yearly. Among car insurance terms, the premium is most important to buyers.
Car insurance term #11: Policy
This is your contract or a written agreement between you and the car insurance company.
Car insurance term #12: Exclusion
These are situations that are not covered by your car insurance policy.
GoBear Philippines helps you compare car insurance terms so you can find the best coverage for your needs. If you find this article helpful, share it on Facebook and spread more financial tips from Gobear!