Car Insurance Terms Defined - Part 1
A Insurance Article Contributed by Brandie King
Introduction to Car Insurance Terms Defined
Car insurance is something that every car owner has to have, and in fact it is usually a legal requirement, but that does not mean that you have to be in the dark when you read your policy. There are a lot of terms used in car insurance policies that the average person may or may not understand, and a lot of the time insurance agents are not much help when it comes to explaining what those terms mean. Here you will find some of these terms defined.
Car Insurance Terms Defined: a-C
Additional Insured (Additional Interest) - An additional insured is a person or business, besides the person that is covered on the policy, that is protected under the policy. Here is an example to help you understand what this means. If you lease your car then the company you leased it from may want to be named as an additional insured on your policy. Your leasing company may want want to be named as an additional insured so that if you cause an accident and are sued they will have some protection under your policy.
Bodily Injury Liability - This is a coverage that you may have on your insurance policy and that covers your legal liability if you cause injury or death to another person in an accident.
Collision Coverage - This coverage is what covers losses to your car during a collision with another car or object.
Combined Single Limit - This is a single piece of coverage that includes both bodily injury and property damage coverages.
Comprehensive Coverage - This is what covers damage to your car for events other than accidents. Some examples are fires, your car being stolen or vandalized, falling object, and natural disasters.
Car Insurance Terms Defined: d-G
Deductible - The deductible on your policy is what you will have to pay for each loss covered by your policy before your insurance company will pay for anything.
Effective and Expiration Dates - The effective date of your policy is the date coverage begins. The expiration date of your policy is the date that your coverage ends and is when you will have to renew your policy.
First Party Benefits (Personal Injury Protection, PIP) - This coverage is what pays those covered by the insurance policy when they are injured during an accident, no matter who was at fault. Things that may be covered by First Party Benefits are medical expenses, loss of wages, and even funeral and death.
GAP Insurance - Insurance that will pay your leasing or loan company if your car is stolen or totaled. This will pay your leasing or loan company for the gap between the actual cash value of your car and what you still owe on it.
Good Student Discount - This is discount that a student (or their parents who carry car insurance on them) can receive if the covered student has very high grades.
