Clicky

Car Insurance Companies
Facebook Fan Page
Twitter Account
Car Insurance Blog

Car Insurance Terms


In order to understand what your car insurance company is really telling you, you need the right terminology. All of those big words that they use on your policy and when they discuss how much you have to pay won't help you at all if you don't know what they mean. You need to understand not only the terminology but the different kinds of insurance that you can get, too. That way you'll get what you need at a price that you can afford, and you won't find that you aren't covered for something you thought that you had coverage for in the event of an accident, theft, or other problem. There are some basic types of coverage:

Liability this is required by most states and means that the driver is legally obligated to pay for the damage that was caused if he or she causes an accident. The insurance company will pay the damages and then can either refuse to continue insuring the driver or raise his or her rates. This doesn't always happen, though, depending on the accident and how long the driver has been insured with the company, as well as whether he or she has had other accidents.

Collision this protects a person from having to pay to get the car fixed if they are in a wreck, regardless of which person was at fault.

There are other car insurance terms that are very important, as well.

Deductible This is how much you'll have to pay if there is damage to your car. In other words, if you have a $500 deductible on your collision insurance and you cause an accident, you must pay the first $500 toward getting your car fixed and the insurance will pay the rest.

Premium A premium is how much you pay each month, quarter, six months, etc. to have insurance on your vehicle.

Claim When your vehicle is damaged, you'll need to file a claim with your insurance company so that you can recover damages. If someone else damaged your car their insurance should be notified, but it's a good idea to call yours, too.