Auto Insurance Policy Definitions
Auto insurance policy terminology can be puzzling and difficult to understand. The only way you will really know what you are getting for your money is to make sure you understand the different types of coverage offered by the various insurance packages you are examining. What is collision coverage, comprehensive coverage, liability coverag and bodily injury coverage? Here is an explanation of these three common types of coverage which will make reading your quote much easier.
What is collision coverage? Collision coverage is the part of your auto insurance policy that will help you to foot the bill for vehicle repair or even replacement if your car is overturned or hits another vehicle or object. With this cover you choose a deductible. What does this mean? If for example, you chose a deductible of $ 800, you will be expected to as much as this amount out of your own funds to repair or replace your car in the event of damage. The higher your deductible, the lower your rates on the policy are likely to be.
What is comprehensive coverage? Comprehensive coverage is the portion of your auto insurance policy that helps pay for damage that occurs due to falling objects, fire, certain natural disasters, and vandalism. Comprehensive coverage usually covers the theft of your motor vehicle.
You will need to choose a deductible for your auto insurance policy. If you choose a deductible of $ 800 you will need to pay as much if your car needs to be fixed or replaced. Again, the higher the deductible you choose, the lower your insurance premiums are likely to be.
What is liability coverage? Another portion of your auto insurance policy is liability coverage. This insurance coverage helps you to pay ohers for their losses if they are injured and you are at fault. It also helps pay for damage to another person's vehicle or property. Liability coverage also helps you to cover any fees if a lawsuit is in the cards. There are two types of liability coverage namely bodily injury and property damage coverage and it is required by law in many states.
What is bodily injury coverage? A vital portion of your auto insurance policy, bodily injury coverage assists drivers in paying an injured person's medical expenses and lost earnings when you are at fault. In the event of a lawsuit being instituted funds are also made available. How much you will be covered for depends of what you decide when you take out the policy.
What is property damage coverage? This is a kind of coverage that helps you pay for damages to another person's property if you are at fault. Again lawsuit fees are covered as well. How much you will be covered for depends on what you decide when you take out your auto insurance policy.
