Often, person to person it is difficult to keep up with the barrage of auto insurance lingo that will come your way from an insurance agent, so this article is going to break down the meaning of ten different auto insurance terms. This will ensure that the next time you are purchasing a policy you will be one hundred percent clear on what your coverage is all about.
The Blue Book
Many times I have encountered friends who hear the term blue book and immediately conjure up the idea that it is a “Who’s Who” book of the variety often flashed in retro-TV shows. However, for the purpose of auto insurance, the blue book is a book that contains the value of used cars and trucks taking into account depreciation. Your auto insurance company will use the value from this book to determine the amount of insurance coverage you need.
A covered person in insurance is anyone who is stated as being covered on your insurance policy. This will include the person who purchased the policy, and in many cases a spouse or another close relative. In some cases, people assume that anyone who drives their car will be covered under their auto insurance policy, but this is not always the case. It is always best to check with your agent if you are unsure about who is and who isn’t a covered person on your policy.
Yes, we all know what discounts are at the grocery store, but when it comes to car insurance they are slightly different. Many insurance companies have “discounts” that are based on measures you have taken to protect your automobile from situations such as theft.
I have always been intrigued about discounts but have rarely associated them with insurance but there is always a dreaded possibility of the car being stolen or subjected to mishap, which is why it is important to get it insured to repair the damages that you won’t find in non owner car insurance with sr22.
A premium is not to be confused with a quote. The premium is the actual money that you pay for your insurance policy whereas a quote usually provides you with the premium you would pay for insurance with any given company.
Rental Reimbursement is typically a policy “add-on.” If you go for minimum coverage, you likely do not have rental reimbursement. If you do have it however, rental reimbursement means that while you have a covered claim you are provided with a rental car within your policies specified limit.
The term limits can be slightly confusing, as insurance policy minimum limits vary from state to state within the U.S. When you purchase a policy, you choose the limit of the coverage the policy will pay in the event of an accident. You may choose to stay at the state mandated minimum level or opt for extra coverage.
Declaration’s page actually refers to the section of your bill that most of us would consider a summary of our policy, because that is in fact what it is. It lays out all of the basic information related to our policy including coverage limits, vehicles, and extra coverage options.
A deductible refers to the amount you would pay upfront if you were in an accident. If you are willing to pay more upfront in this event, then you could have a lower premium or insurance payment. However, should an accident occur, the money will come from your wallet!
Full coverage is not technically a type of coverage or a stated plan. When a friend tells you they have full coverage on their vehicle they typically mean they have more than the state requires or more than basic liability coverage.
To be continuously insured means that there has not been a span where you were without insurance coverage. If you have been doing consistent business with one insurer for a length of time, this can lead to a discount on your insurance policy if you have been a good driver.
These ten terms are not the only ambiguous or misunderstood terms on an insurance policy. If there are other terms you don’t understand then never hesitate to call your insurance provider or agent and ask for clarification. Being an informed consumer can save you hassles in the future should you ever be in auto accident.