Terms Found on an Auto Insurance Policy and Their Meanings

When you get an auto insurance quote, do you know exactly what you need to ask? Do you know what the terms are and what they mean? Here are a few tips that will help you think and talk like an insurance agent when you call for an auto insurance quote. First of all remember that an agent is in the business to sale his product. However, you being the customer you always have the final say. Here are some terms and their meanings.

Liability is the coverage that will protect you and your property and possessions in the event you are at fault in a multi-vehicle accident. This coverage will pay the other person or persons involved for hospital bills, their vehicle repairs or pay off, and protect you in the event of a law suit. The limits of liability vary from state to state. Here in Tennessee the minimum limits are $25,000 per person up to $50,000 per accident. This means the insurance will pay up to $25,000 to the other person(s) involved but will not exceed a total of $50,000 for one accident. Limits range also from $50,000/100,000 up to $250,000/500,000.

Uninsured motorist is the coverage that will protect you in the event someone collides with you, and they are not carrying any insurance at all. This coverage will help pay for your vehicle repairs or replacement minus a $250 deductible. If this happens, the other person who is not carrying insurance is given the chance to make restitution to your insurance company and provide proof they have gotten insurance before they have their license taken. This is providing they have a license and do not end up in jail for some reason.

Medical payments will pay for your hospital and ambulance services up to a certain amount which is specified on the policy. Standard medical pay is $5000. You can carry higher or lower medical payments if you desire. Just ask the agent what their choices are.

Full coverage insurance is when a person carries liability, uninsured motorist, medical payments, comprehensive, and collision coverage. In other words, they have it all.

Comprehensive covers the fire, theft, vandalism, glass breakage, and animal collision on your vehicle. This coverage comes with several choices of deductibles. Deductibles are what you pay out of pocket before the insurance takes over. The standard deductible on this is either zero or $50. Most people carry such a low deductible since if a windshield or glass is broken, they usually only cost $300 to $400. Thus, there would be no need to have a $500 deductible on comprehensive since broken windshields are the most common claims turned in under this coverage.

Collision is what will pay for repairs or pay off of your vehicle in the event of an at fault accident or a single vehicle accident. Most people will opt for a $500 deductible on this coverage in order to keep their premium lower. Collision is the most expensive coverage on the entire policy.

Some companies offer Emergency Road Service and Rental Reimbursement. First Rental Reimbursement will not pay for you a rental vehicle if you automobile is in the shop just for mechanical repairs. This only covers a rental car if your car must be repaired due to an accident. Emergency Road Service will cover a tow in the event of a mechanical break down but will not cover just having a vehicle pulled from a ditch. If a tow is done due to sliding in a ditch or getting stuck, this is actually considered a collision and would fall under that coverage. Both of these coverages are optional.

Always do your homework on a company also. Check on their ratings and rankings, check to see if there are any complaints filed against them, and definitely check on their cancellation policies and statistics. Just doing this could save you a bundle on your auto insurance.

I sure hope this will help you if you are looking to get auto insurance. If you talk and think like an agent, you could probably save yourself some money on your auto insurance.

Source:

Personally working in insurance for seven years