9 Car Insurance Terms You Should Know
Top Car Insurance Terms You Need to Know
Almost every state in the U.S. requires some form of car insurance. If you live in Florida, registering your vehicle requires getting auto insurance. Notably, the minimum auto insurance coverage requirements are personal injury protection and property damage liability. Besides these two, you might want to consider optional insurance coverage, which would require some knowledge of car insurance terms.
Here are the top ten you should know:
Collision insurance, as the name implies, covers damage to your car caused by hitting another vehicle. The insurance company will pay for your car’s repairs up to your policy limit, regardless of whether you or the other party is at fault. This coverage is typically mandatory if you are the one financing your car. The only exception might be if the car is twenty years old. If unsure, speak to a licensed insurance agency.
Comprehensive insurance covers a list of damages not related to a collision. These include contact with animals, fallen objects such as tree branches, natural disasters like hurricanes and earthquakes, vehicle theft, and fire. It is beneficial if you live in a high-risk area and also for the fact that it covers unforeseen damages.
A deductible is the amount of money you pay out of pocket while waiting for the insurance claim to go through. You choose whether to have a low or high deductible amount. However, remember that a low deductible means a high premium, and vice versa.
An auto insurance declaration page is one of the most common car insurance terms. It’s a document that summarizes your policy and is one of the first things to look at whenever you have questions about your coverage. Every insurance company has its own format. However, they all have the following information:
- Your agency’s contact information
- Lender/lesser details
- Your policy details
5. Liability coverage
Liability insurance is a legal requirement for anyone with a car. It pays for damages to the other party’s car and their injuries but does not cover yours. Two forms of liability coverage exist. Bodily injury liability includes medical fees, lost earnings, and what could be termed “pain and suffering.” This insurance also covers your defense and court fees. The other coverage is property damage liability, which covers damages to the other party’s car and any other accident-related property. This insurance comes with bodily injury liability.
No-fault insurance is another common car insurance term known as personal injury protection insurance (PIP). It helps prevent blame as each party’s insurer covers injuries for the other regardless of who is at fault. The agency will, however, not pay to restore the property. The coverage limit is different in every state. Also, you could claim at-fault insurance if the other party was driving under the influence. Note that the limit is different in each state.
Certificate of financial responsibility (CFR)
A CFR is also known as an SR-22, another car insurance term you should know. It is coverage that serves as proof for drivers with a past driver’s license suspension. People with an SR-22 are those with DUIs, poor driving records, or who were caught driving without a license. Having this proof can deem you a high-risk driver, making insurance cover rates high or resulting in policy cancellation by your insurer.
Medical payment coverage
Also known as MedPay, medical payments coverage is an additional auto insurance type that covers the medical fees for you, passengers, and pedestrians involved in an accident. It takes effect regardless of who is at fault. It is valuable for people living in urban areas with higher chances of pedestrian injuries.
Gap insurance is a wise investment for anyone making payments on a vehicle. It covers the difference between the amount you owe for the car and its cash value after a total loss. Typically, if an accident occurs and you suddenly owe $100,000 but the car is worth 80,000, your insurer will only pay the eighty, and you have to figure out how to cover the rest.
Coleman Insurance Provides All-In-One Car Insurance in Clearwater
Coleman Insurance Agency offers the best car and homeowner’s insurance rates in Clearwater. Our team comprises professionals who will strive to safeguard you, your loved ones, and your property. Feel free to request car insurance quotes today or call us at 727-441-9911.
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