Car Insurance

Although many see car insurance as a "necessary evil" of owning an automobile, when you need to make a claim because of an accident or damage, you are grateful that you have it. But, it is not just enough to have car insurance; you should also understand what it covers and the "ins and outs" of your policy. Here are some common car insurance terms and definitions to help you get started:

  • Collision Coverage: this is the part of your policy that covers you when you hit another car or an object and pays for the repairs to your car-it doesn't make a difference who is at fault.

  • Comprehensive Coverage: covers any damage to your car that is not caused by a collision or an upset-such as a tree branch falling on your car, etc.

  • Deductible: most people are familiar with this term. It is the amount of money you must pay out of pocket when you make an insurance claim. Higher deductibles generally mean lower premiums.

  • Effective date: The time period which your car insurance policy covers. If you let your insurance lapse and do not renew your policy, you will not be covered.

  • Endorsements: Additional coverage and discounts that you may receive on your car insurance. Sometimes you will get a discount for having multiple policies with a company, for a student's low grades, and you can also add protection for full new car replacement cost among other items.

  • Exclusions: Things that are not covered by your car insurance-you will probably not be covered if your car is damaged while you are in the commission of a crime.

  • Glass Coverage: You can opt for "full glass coverage" in your car insurance which will replace any glass in your car with no out of pocket cost.

  • Liability Coverage: This is required by most states to some degree. It covers any damage that you are legally responsible to pay for.

  • No-fault Coverage: This means that your insurance company will pay for any damage or repairs to your car no matter whose fault it is.

  • Personal Injury Protection: Optional coverage that will cover lost wages, medical costs, and funeral expenses (if necessary) in the event of an accident.

  • Property Damage: Covers any damage that your car does to someone else's property.

  • Underinsured/Uninsured: Makes sure that if the other driver is at fault and does not have adequate insurance that you are covered and your damages are taken care of.




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