Guide to Online Auto Insurance: Terms, Coverage

To find the perfect policy, there’s a lot you first must learn. Mastering auto insurance would take a long time, but even learning the basics will give you a big advantage when dealing with insurance companies. Use this page as reference to find confidence and the expertise to decide if what you’re getting is worth what you’re paying.

TERMINOLOGY

Coverage – When and how much an insurer will pay for damages or injuries involving your vehicle. This will specify whose injuries and damages are covered and to what dollar amount maximum.

Deductible – The amount of money you pay yourself when you file a claim. If you want your insurer to pay for something, you will have to pay the deductible.

Policy – The total listing of the agreement you make with a provider. This is a detailed account of services and money to be exchanged, as per your contract.

Premium – What you pay regularly to retain your auto insurance. Payments recur each billing period, which is usually monthly, biannually, or annually. If you do not pay it, you will not have coverage.

COVERAGE TYPES

Liability – When the driver of your insured vehicle is found to be at fault for damage, injuries, or death to another party in a driving collision, this coverage kicks in. It pays for the other party’s claim as well as providing a legal defense if you should be sued. There is a maximum amount of coverage.

Collision – Pays for damages to your own vehicle that result from collisions and traffic accidents. Claims will be paid up to the coverage limit, regardless of fault.

Other vehicles not on your auto insurance policy are not covered.

You should purchase up to the blue book price of your vehicle in Collision coverage.

Comprehensive – Pays for damages to your vehicle resulting from non-driving incidents. This includes damage from weather, natural disasters, wildlife, hit-and-runs, crime, and more. Theft is also covered by Comprehensive packages.

Medical Payments – For injuries to the driver and passengers of an insured vehicle, Medical Payments coverage will provide financial assistance for medical treatment. There will be a coverage level per person and total that states the maximum the insurer will pay. Funeral costs are also often covered here.

Uninsured/Underinsured Motorist – If the party responsible for the collision does not have the coverage required to compensate you for damages and injuries, this coverage will. Nearly half of drivers in the US have no insurance or too little.

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