Understanding auto insurance premium terms is essential to comparing policies, information you must which can help you make an informed decision, perhaps saving you money too.
Insurer
The name of the company authorized to do business in your state is the insurer. Only insurance companies approved by your state’s department of insurance may write policies in your state, offering coverage minimums corresponding to state law.
Insured
The person who is covered by the insurance policy is the insured. That information will include your full name, address and contact information including your phone number. An account number assigned by your auto insurer will also be found on your declarations page.
Bodily Injury Liability
Bodily injury liability is the limits by which the company will pay for injuries sustained in an accident. Your insurer may list categories by cash limits: by person and by occurrence.
Property Damage Liability
Property damage liability is coverage which pays damages to the car and possessions of the other party in an accident that. This may include labor and parts, replacement for valuables inside of that car and repairs to stationary objects including signs, trees, mailboxes and buildings.
Deductibles
Your insurance kicks in after you have satisfied a deductible. That means if you have a $250 deductible for collision damage, then the insurance company covers your repairs minus that amount.
Uninsured Motorist Coverage
If the other driver involved in a car accident does not have insurance or is underinsured, than uninsured or underinsured motorist coverage will protect you. This insurance kicks in when the liability limits for the other driver falls short of being able to cover injuries to you or other passengers in your car according to Insure.com.
Endorsement and Exclusion
Two terms which are sometimes confused with each other are endorsement and exclusion. An endorsement is “…a written agreement that changes the terms of an insurance policy by adding or subtracting coverage,” according to the state of California. An exclusion is a “…contractual provision in an insurance policy that denies or restricts coverage for certain perils, persons, property, or locations.”
Other Terms
Additional terms related to auto insurance which may not be prominently listed with your premium terms include the claim which is your notice to your insurer that a loss has occurred whereby you are seeking relief. An adjuster is the person who comes to look at your vehicle following an accident to assess damage and estimate loss and payment of claims. An agent is the person who is authorized to sell insurance on behalf of your insurance company with a broker being the person who oversees agents.
References/Resources
California: Auto Insurance Terms
Connecticut: Automobile Coverage Information
Insure.com: The Benefits of Uninsured/Underinsured Motorist Insurance
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