Auto Insurance Terms Explained

admin — Mon, 14 Dec 2009 05:22:26 +0000

The typical insurance policy will use terms of language that are not used in regular situations. These terms may actually be unique to the auto insurance industry and used exclusively. If you want to be in a knowledgeable position where it comes to your insurance coverage, you should have, at least, some grasp of the auto insurance lingo you might encounter.

There are a few basic things you should understand about car insurance. If you do not have insurance you need to realize that you lack any sort of protection if you happen to get in an accident. Without insurance protection, you can be held legally libel and subject to lawsuits. If sued, you may have to pay for any damages sustained in the accident if it was your fault. On the other hand, if the accident isn’t your fault, you may still have to pay for your medical bills, those of your passengers, as well as repairs or replacement of your automobile. These consequences underscore the need for auto insurance coverage. This fact, of course, explains why most states make some level of auto insurance coverage mandatory.

There are really only five basic terms you might want to understand when reading a policy or discussing it with an agent. Those terms are liability coverage, physical damage coverage, medical coverage, emergency assistance coverage, and unattached equipment coverage.

For many car owners, the above terms might be somewhat recognizable. They may have come up in early conversations about insurance. Other may be less familiar to you. Liability, medical, and physical damage coverage are considered more recognizable to car owners who know a little about insurance or have discussed it in brief. Meanwhile, emergency assistance and unattached equipment coverage are mentioned less frequently and remain more obscure to the average insurance policyholder. They are not typically considered as important as other types of coverage. Still, they do offer some great advantages if added to your policy.

Above all terms, liability will probably be the most familiar to you since it is the most basic coverage. Liability coverage is usually the minimum amount of insurance you can have. It protects the driver from any costs for damages sustained in a collision. When you have liability coverage, the point is to have protection from any fees incurred when damages are done. If you do not have sufficient coverage it may mean you will pay the victim’s damages or injuries yourself. Physical damage insurance is simply that coverage you used to pay for repairs or a to replace a damaged vehicle. Of course, medical coverage is meant to cover not only you but passengers as well by paying for medical expenses.

The last auto insurance terms are not essential. If you have emergency assistance coverage, you can access roadside assistance programs. Once emergency assistance coverage is added to your policy, you can feel safer knowing that you can make use of towing and other services when your vehicle has a problem. Unattached equipment coverage deals with those aspect of your vehicle that may have been added later, after purchase that are not permanent parts of the automobile. They may be expensive additions like fancy lighting, customizations, or sound systems; all may be eligible for protection under this last form of coverage.

If have a working knowledge of these types of terms, you will be able to approach the topic of auto insurance with far more confidence than before. You will understand what each means so you can better evaluate plans to see if they are fitting your insuring needs.

By: Alisdair Cosgrove

Understanding Auto Insurance Jargon

admin — Wed, 04 Nov 2009 02:41:12 +0000

When reading through an auto insurance policy, it can seem almost impossible to understand. This is because there are various words that we do not use in our everyday language. Actually, those words are not really used outside of the insurance industry or outside of a conversation involving insurance. If you don’t have an understanding of those words, then it can seem as if someone is speaking a foreign language to you. That is why you should learn some of the insurance jargon that is thrown around because insurance happens to be a large part of your life.

Without insurance, you do not have any type of protection in case you are in a car accident. If you don’t have protection, then you can be sued. Being sued means you’ll have to pay for any damages sustained in an accident if the accident was your fault. Even if the accident wasn’t your fault, you still have to worry about your medical bills, replacing your car and the medical expenses of anyone in the car with you. This in itself makes it obvious why auto insurance is a necessity. Luckily, states mandate that people must have a minimum amount of auto insurance.

Basic terms

There are really only five basic terms that you need to know when talking about car insurance. Those terms are:

- Liability coverage
- Physical damage coverage
- Medical coverage
- Emergency assistance coverage
- Unattached equipment coverage

A few of these may look a bit familiar to you, but there are a couple of them may not. We frequently hear the terms liability coverage, physical damage coverage, and medical coverage when talking about car insurance and reading our policies. What we don’t hear much of is emergency assistance coverage and unattached equipment coverage. These are, of course, not as important as the other aspects of your coverage, but that does not mean that they should be ignored since they are great add-ons to your policy.

The most common of the terms you will hear is liability coverage. Liability coverage is the part of your policy that covers damages caused by you in the case of an accident. You should always make sure this coverage is enough to cover damages. If not, then you may have to pay an out of pocket expense to the person who was the victim in the crash. Medical coverage covers you and any passengers within your vehicle as a result of a crash. Physical damage coverage will help you repair or replace your vehicle.

As for the two terms that are a bit different, emergency assistance coverage is like a type of roadside assistance. Adding this to your plan provides you with tow service so that you’re not stranded on a highway in unfamiliar territory. Lastly, unattached equipment coverage provides coverage for that equipment that is not a permanent attachment to your car. That may include something such as a satellite radio system. If you have expensive attachments on your car, you want to make sure that you insure those as well so that you don’t have to pay for their replacement or can have those items repaired by your insurance.

Having an understanding

Knowing these terms is the first step in understanding some of the confusing but important terms that you will see and hear. If you don’t understand them, you cannot understand what type of home and car insurance coverage you have or even how it works. Knowing how it works helps you determine if what you have is adequate enough for your particular needs.

By: Amy Nutt

Auto Insurance Term » Equipment Coverage

Auto Insurance Terms Explained

Understanding Auto Insurance Jargon