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Auto Insurance Terms
Filed Under Auto Insurance Terms | Leave a Comment
Auto insurance can be confusing as it is. Throw in some sometimes crazy vocabulary words and well, it can enough to want to pull the bike out of the garage and give up driving. Here are a list of common insurance terms ad what they mean in the simplest form. Hope this helps you out.
Deductible - The amount an insured person must pay before the insurance company pays the remainder of each covered loss, up to the policy limits.
Multi-Car discount - A discount offered by some insurance companies for those with more than one vehicle insured on the same policy.
No-Fault Insurance - Many states have enacted auto accident laws permitting auto accident victims to collect directly from their own insurance companies for medical and hospital expenses regardless of who was at fault in the accident. Although there are many legal variations of no-fault insurance, most states still allow people to sue the party at fault if the amount of damages is above a certain state-determined amount.
Personal Auto Policy - The most common auto insurance policy sold today. Often referred to as “PAP,” this policy is written in simple wording and provides coverage for liability, medical payments, uninsured/underinsured motorist coverage, and physical damage protection
Split Limit - Any insurance coverage with separately stated limits for different types of coverage.
Term - The length of time for which a policy is in effect.
Usage - This refers to the primary function or purpose of your vehicle. For example, if you primarily drive your car to and from work, the usage is considered commute.
Liability - This coverage pays for accidental bodily injury and property damages to others. Injury damages include medical expenses, pain and suffering and lost wages. Property damage includes damaged property and automobiles. This coverage also pays defense and court costs. State laws determine how much liability coverage you must purchase, but you can always get more coverage than your state requires.
Collision - This coverage pays for damages to your vehicle caused by collision with another vehicle or object.
Comprehensive - This coverage pays for loss or damage to the insured vehicle that doesn’t occur in an auto accident. The types of damages comprehensive insurance covers include loss caused by fire, wind, hail, flood, vandalism or theft.
Medical Coverage - Pays medical expenses regardless of fault when the expenses are caused by an auto accident.
PIP - Personal Injury Protection (PIP) is required in some states. This coverage pays medical expenses for the insured driver, regardless of fault, for treatment due to an auto accident.
Uninsured Motorist - Pays your car’s damages when an auto accident is caused by a driver who doesn’t have liability insurance.
Underinsured Motorist - Pays your car’s damages when an auto accident is caused by someone who has insufficient liability insurance.
Rental Reimbursement - This type of coverage will pay for a rental car if your car is damaged due to an auto accident. Often this coverage has a daily allowance for a rental car.
Source: Insweb.Com
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