Car Insurance Terms

There is a lot more to understanding car insurance than just knowing you have to have it! In order to evaluate your car insurance needs, it's helpful to understand some of the more commonly used insurance coverage options athat some people decide to purchase in combination with their car insurance policies, as well as some of the standard car insurance terms and fundamentals.

Accidental Death Insurance

Accidental Death Insurance provides coverage for the insured in the event of death that is a result of accidental injuries, but not illness. If there is a death, then the car insurance company makes a payment to the insured's beneficiary. If a limb is lost or another bodily injury occurs, then the holder of the car insurance receives a sum as specified by the car insurance contract. Usually, the coverage is usually used in combination with dismemberment insurance.

Dismemberment Insurance

Dismemberment Insurance provides coverage for when a policy holder loses one or more limbs or the sight in one or both of their eyes. It's usually used in combination with Accidental Death Insurance.

Uninsured/Underinsured Motorist Coverage

Uninsured/Underinsured Motorist Coverage is a standard part of car insurance policies that helps provide coverage for any losses suffered by yourself or others when you are in a car accident with someone who tries a "hit and run" or a driver who isn't carrying adequate insurance (or none at al!) to cover the accident expenses.

Bodily Injury Liability Coverage

Bodily Injury Liability Coverage is part of the standard car insurance policy and covers you for the losses that come as a result when you cause bodily injury to other people. Losses might include pain and suffering, the loss of income and medical expenses. Most US states require Bodily Injury Liability Coverage.

Collision Car Insurance Coverage

When you carry collision coverage, it covers damage made to the vehicle caused by a collision (impact) with another vehilcle, an object or due to a rollover.

Comprehensive Coverage

Comprehensive coverage is the division of car insurance policies that covers the cost of damage made to a vehicle from natural disasters and damage other than collision- including things like windstorms, hail, theft, fire, or contact with an animal.

Deductible

A deductible is the amount of money that must be paid by the insurance policy holder towards the covered losses before the car insurance company will pay anything towards the cost of the submitted claim.

Disappearing Deductible

Some car insurance companies offer decreasing deductible amounts as the cost of the loss increases. The idea for disappearing deductibles is that small claims are not paid for, but large claims with costly losses are paid in full.

Liability Car Insurance

Liability car insurance covers the cost of expenses a car insurance policy holder must pay for bodily injuries and/or property damage caused to others.

Medical Payments Coverage

Medical payments coverage is a standard part of auto insurance policies to provide coverage for medical expenses for yourself or the passengers in your vehicle if there is an accident. Medical payments coverage will cover regardless of which driver is at fault.

No Fault Car Insurance Coverage

In some states, the automobile insurance laws require that car insurance companies protect policy holders with a no-fault policy and cover the losses in the event of an accident- whether fault is found or not.