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Auto Insurance Terminology
As anyone who has shopped for auto insurance or filled an auto insurance claim knows, car insurance agents and companies use terminology all their own. Below is a list of definitions to give you the expertise to close the gap. Now, online insurance quotes and dealing with claims won’t have to feel like negotiating in a foreign language!
Actual cash value: The market value of your car as it stands today.
Anti-theft device: A device that deters thieves or burglars from stealing your car. Some insurance companies offer a discount if you have one in your car.
Assigned risk insurance: In states requiring insurance coverage for its drivers, it's a law that requires insurance companies to accept a certain number of high-risk drivers onto their policies. Such policies can be pricey, but they do exist.
Auto replacement coverage: Supplement that allows for your entire vehicle to be completely repaired or replaced, regardless of cost to the insurance company.
Bodily injury liability coverage: Covers another party's personal injuries if you caused a crash.
Binder: Temporary auto insurance that protects you until your new policy comes into force.
Betterment: Parts damaged in an accident may be replaced with parts in better condition than the car already had, and the driver may be asked to pay the difference in cost.
Collision coverage: Pays for damage to, or replacement of your car in the event of an accident. Sometimes collision coverage is required by car lenders.
Comprehensive insurance: Covers events not covered by collision insurance. For example: natural disasters, theft, and vandalism.
Deductible: The amount you pay for an incident before your insurance policy kicks in. The higher the deductible is, the lower the rate you pay.
Gap car insurance: Covers the difference between what you still owe on your car and its actual cash value as totaled in a wreck.
Good driver plan: An incentive offered by some insurance companies for maintaining a good driving record over a designated time period. Each company has difference incentives, so read the terms of your online insurance quotes for details.
Lien: A claim on property as security for an owed debt.
Liability insurance: Covers losses to people and property damaged by your found negligence. This type of insurance is a required minimum in many states.
Passive restraint system: A safety system, such as an airbag or seatbelts, that works on its own to protect drivers and passengers from bodily injury. Some insurance companies give discounts for their presence in the car.
No-fault auto insurance: In some states, this type of policy replaces liability insurance. It covers damages to your own party or automobile, regardless of who was at fault. It allows for more expedient accident-related health care. Sometimes no-fault insurance comes with a limit to claims (as part of a limit on torts claims).
SR-22 auto insurance: If your license has been suspended or revoked, you will need an SR-22 auto insurance certificate. SR-22 is proof of a liability auto insurance policy.
Total loss: When the cost of repairing a damaged automobile exceeds its actual cash value.
Uninsured motorist coverage: Covers you when the other party in an accident doesn't have liability insurance coverage to pay for damages to your car or body.
Now That You Know Your Terminology, Connect With Auto Insurance Agents Now By Filling Out the Quick Form At The Top Of This Page.
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