Car insurance is easy to ignore and even harder to figure out. We’ve all had that moment when we’re searching for car insurance and suddenly realize we don’t know what any of the terms mean. But what are those terms? Read on to find out.
Here are the five terms you need to know in car insurance:
Collision Coverage
The term collision coverage is used to describe the insurance that pays for damage to your car in the event of an accident, like colliding with another car or coming into contact with an object, such as a telephone pole or mailbox. It is an optional coverage that you can add to your auto insurance policy and is definitely something worth considering if you want to keep yourself and your passengers protected at all times, or if you’re someone that has had previous accidents. As it is one of the most essential parts of the policy, it’s very important that you read the policy carefully before purchasing. For example, it will explain that it will cover the damage of an accident you’re involved in, but not from the damage done to another car.
Comprehensive Coverage
A comprehensive car insurance policy is as comprehensive as the coverage you choose. The fact is, most comprehensive policies have the same types of coverage since the cost to provide is generally the same across the board. Put simply, it is an optional plan that can protect against damage to your vehicle caused by non-collision events that are outside of your control. Some examples include; theft, vandalism, and fire. Because of what it can protect you against, it is no surprise that it is becoming more common, and is a great way to ensure you have the coverage you need for any situation.
Uninsured Motorist Coverage
Uninsured motorist coverage refers to insurance you purchase when you are involved in a car accident that was not your fault. For example, Uninsured Motorist (UM) coverage will protect you if you are involved in a car accident with another driver that doesn’t have any insurance. Whether you are a pedestrian or someone driving your car, this coverage can help protect you. While you may think you will never be involved in this situation, it still should be a plan worth considering.
Physical Damage Coverage
Physical damage coverage (also known as “collision coverage”) is one of the most important types of insurance you need to consider when buying a new car. If you’re going for a cheaper vehicle, you may want to skip this coverage, as you can get better deals on more affordable insurance (which has a higher deductible). However, this coverage is still one of the most important to consider, as it can cover the damage to your car in the event that it suffers from any physical damage. For example, if your car gets broken into, the insurance policy will be able to cover the costs.
Medical Payments or Personal Injury Protection
What is personal injury protection? Essentially, it’s an additional layer of insurance that can help pay medical costs and lost wages if you are involved in an accident and was not at fault. Personal injury protection is often referred to as PIP or personal injury protection in the U.S.
Car insurance is about more than just the price. It’s about coverage and the type of coverage you need to protect yourself from the risk of a loss. Your car insurance policy can also play a role in your liability coverage. And, if you’re in a high-risk group, or something happens to your vehicle, that coverage can protect you from a big claim.
It may be something you take for granted, but it is very important and should be taken seriously. If you do not have insurance, you should be careful about driving your own car. You can be sued by an uninsured car owner, which can put you in a lot of trouble. If you are involved in an accident, the other person’s insurance company will pay for your damages. However, if you have inadequate insurance and are involved in an accident, you can be sued by the other person’s insurance company for all your damages.
So, if you are a driver, be sure to have adequate car insurance today!
