In this article, we are going to look at 20 auto insurance terms that are used in general insurance quotes.
- Accident- this refers to a sudden or unforeseen, unexpected event that is beyond control of the insured thus resulting to a loss.
- Automobile insurance- this refers to the form of car insurance that provides protection against any losses that are car related. This insurance provides cover to losses incurred to the property of the insured or losses to other people’s property that the insured person is deemed liable resulting from operating or owning a vehicle.
- Deductible- this refers to the amount of money that the insured is supposed to pay in order to cover the loss incurred in a car accident which he/she is deemed responsible. The insurer pays the remaining amount so as to cover the total loss.
- Discount- this refers to the reduction in the premium of the insured if certain conditions to minimize the insurer’s expenses or losses are met by the car or the insured.
- Indemnification- this refers to the process of offering compensation to losses with intention of restoring an entity or individual to their estimated financial position before that loss occurred.
- Insurable interest- this occurs when a person would suffer a loss due to bodily injury or property damage after a car accident.
- Insured- this refers to an individual or organization that is covered by a car insurance policy.
- The insurer- this refers to the firm that is responsible for selling car insurance policies.
- Insurance score- these are the confidential ratings that utilized in certain states for underwriting and are considered to be the rating tool. This information may include the payment history of the consumer, bankruptcy and so on.
- Lapse in insurance coverage- this refers to the point at a certain time when the car insurance policy is terminated or cancelled for various reasons such as failure or delay to make payments for premiums.
- Leased vehicle- this refers to a car that has been rented/ leased under long term agreement contract. Ownership of that leased car remains with the car leasing firm and this must be indicated on the auto insurance policy of the insured.
- Legal liability- this is the law imposed liability and is different to the liability resulting from a contract or agreement.
- Personal damage- this refers to the property which is neither land nor land related (real estate).
- Physical damage- this refers to the damage that occurs to a car that is covered by an insurance policy. This damage may occur from various risks such as collision with another car, theft, vandalism and fire.
- Personal injury Protection- this refers to the coverage that may cover your lost wages, medical treatments or other expenses that are related to car accidents regardless of the person deemed responsible for the accident.
- Policy- these are the written contract documents of car insurance between an insured and a car insurance firm. These documents include; attachments, endorsements, forms and riders.
- Policy limit- refers to maximum amount of money that the insurance policy is willing to cover, either under a specific or overall coverage.
- Policyholder-this refers to the person who maintains the insurance of a car insurance policy. This may either be the owner of the insurance policy or even covered under that insurance policy.
- Rental reimbursement- this indicates the insurance coverage that will help you to cover for alternative transportation means that you may use when your car is at the garage after a car accident has occurred.
- Comprehensive/collision coverage-this refers to the coverage offered by the insurer so as to compensate for damages to your car as a result of colliding with and object or another car.
It is better to understand them to ensure that the policy you are purchasing is a no down payment car insurance.