Car insurance is one of those things you know you need to have, but might not fully understand how it benefits you. Of course, these questions are never really brought up until you have an accident and need some backup. Here we will break down some of the top auto insurance terms.
Deductible. The money that is paid out of pocket before the insurance policy pays out its covered amount. The deductible is related to the premium.
Premium. The monthly/yearly owed amount to purchase the policy. Coverage types determine the cost of the premium.
Bodily Injury Liability. The personal injuries or death sustained in an accident can be covered with this part of the policy. Lost wages, medical costs or other expenses are financed through this liability.
Collision Coverage. If the accident involved you hitting another car or an object, this coverage will usually assist with repairs or replacement. Many lenders require this car insurance coverage while a loan is still open on the vehicle.
Comprehensive Coverage. This is coverage that provides total assistance if something other than a collision damages your car. This could include theft, falling object, storms, natural disasters or striking an animal.
Property Damage. Many states require this coverage, as it pays out if your car does damage to another’s property.