Car Insurance Basic Terms Explained

Car insurance is described by its name.  It is an insurance policy taken out on your car.  If you are involved in a car accident, this insurance will cover the damages on your car, you and your passengers and even your property. 

Coverage on Your Car

If a person is involved in a car accident and it was not their fault, the other driver’s insurance will cover the damage to your vehicle.  If the accident was your fault, your insurance will cover the damage, only if you have full coverage.  If not, you will be required to pay for your own damage.
If the insurance company is paying for the damages, most of the companies will have a list of preferred garages that you can send your vehicle to.  Although there are preferred garages, you are not required to take your vehicle to any of them.  You can bring your vehicle to any garage that you wish and the insurance company must still pay to repair it.

Coverage on Passengers Injured in the Accident

If you are in an accident and you are injured, the insurance company will cover the damages.  If you were not at fault, the other driver’s insurance will pay the damages.  If you were at fault then your insurance must pay the damages.
Whoever is at fault, the insurance companies will cover the same things. The first thing that will be covered is your medical bills.  Any hospital bills, ambulance bills, and any other follow up doctors appointments will be covered.  When you are in an accident and the insurance companies are involved, the victim should not pay any medical bills out of their pocket.

Another thing that is covered when a person is injured in a car accident is lost wages from work.  If you are injured in the accident and you are unable to work for a period of time, you will be reimbursed for the money that you lost. 
Pain and suffering is something else that you will receive money for if you are injured in an accident.  It is usually up your lawyer and the insurance company what you are in titled to.  Usually, the amount is based on the severity of the injuries that you sustained. 

Coverages to Property Damage

If you are in an accident and you end up in someone’s yard having damaged their fence, a tree, or even the house, your car insurance will cover it.  It is important to have property damage in cases such as these.  Property damage can be very expensive.

Full Coverage Defined

Full coverage is a type of car insurance which many people choose to have.  It is the most expensive type of insurance but it also has the highest coverage.  Full coverage will pay for both your vehicle and the other driver’s vehicle if there is an accident. 
If you are in an accident which is your fault, your insurance will cover both of the cars and all of the passengers involved.  If you are in an accident that is not your fault but the other driver did not have insurance, your insurance will cover it if you have full coverage.  Your full coverage insurance will also cover your vehicle if you are involved in a hit and run accident.  If there is no driver to blame, there is no way to insurance to put a claim in to.

Collision Insurance Defined

When a state makes having car insurance mandatory, collision is the minimum insurance required.  Collision insurance will cover only the driver of the other vehicle if you are at fault in the accident.  The collision insurance will also cover any property damage that you may cause.  You will be responsible for damages to your vehicle and passengers in your vehicle. 
This is the cheaper of the two insurances.  Many people choose this insurance because of its low price, however, they regret it later when they are in an accident that is their fault.

Uninsured Motorist Defined

Uninsured motorist insurance is not an insurance policy that can be purchased separately.  It is an insurance that can be attached to your collision insurance.  Uninsured motorist is an insurance that will cover a driver if they are hit by an uninsured driver.  This way, the damages will not have to come out of your pocket if you are hit.  Another way that uninsured motorist can help you is if you are involved in a hit and run accident.  If there is no one to go after for the damages, you uninsured motorist will pay the damages.

Deductible Defined

A Deductible is a small amount of money that must be paid to the insurance company if you are in an accident that was your fault and you want your insurance to pay for it.
Anytime you ask your insurance company to pay for any repairs.  You will need to pay the deductible.  Your Deductible is determined at the time you purchased your car insurance.  The typical amount of a Deductible is between $200 and $500. 
If you are in an accident which was not your fault and the other driver’s insurance company is paying for the damages, you will not be required to pay a Deductible. 
If you are hit by a driver with no insurance and you are having your car repaired by your insurance company, there is no Deductible. 

Insurance Premiums Defined

Insurance premiums are the payments that one pays to keep their car insurance covered.  The amount that a person pays in their premiums depends on several things such as the driver’s driving record, the driver’s vehicle, and the driver’s age and sex.  Each different insurance company charges different insurance premiums.  It is necessary to shop around to find the best rate.

Car insurance does not have to be complicated or scary.  With just a little research a driver can get the policy that is right for them at the best price.