Here's a
handy reference for Auto Insurance
Terms and Definitions.
Binder:
A temporary
insurance contract that provides proof of coverage until a
permanent policy can be issued.
Bodily injury liability:
The part of an
auto insurance policy that pays for injuries you may cause another
driver or pedestrian. It includes medical expenses and loss of
wages.
Collision:
The part of an
auto insurance policy that pays to get your car repaired after a
collision with another vehicle or an object, such as a fire hydrant
or utility pole. It is collision insurance that will get your
insurance company to seek out another driver's insurance company to
pay for repairs if they were at fault. A deductible amount will
apply.
Comprehensive:
This part of an
auto insurance policy covers damages to your car caused by
something other than a crash: a vandal breaks in, a tree falls on
it or floodwaters engulf it. A deductible amount will
apply.
Declarations page:
The front page
of an auto insurance policy listing the name of your insurance
company, your policy number, your coverage, the cost of the
coverage and your deductibles. This page also lists the vehicles
insured on the policy as well as vehicle identification numbers
(VIN).
Factors that affect your auto insurance
include:
- Age
- The type of car you
drive
- Marital
status
- Driving
record
- Where you live: an urban or
rural area
Deductible amount:
The amount of
money a policyholder must pay before an insurance company steps in
and pays the rest. Deductible amounts range from $100 to $1,000.
The higher your deductible, the lower your insurance premium. A
higher deductible also means you'll have to pay more money out of
your own pocket if an accident, theft or another covered incident
should occur
Discount:
A reduction in
the cost of your auto insurance premium. Insurance companies offer
discounts for everything from a teenage driver's good grades to a
car's safety equipment, including airbags, anti-lock brake system
and a security alarm.
Emergency road service: This part of an auto insurance policy pays for the cost of having your car towed after it breaks down.
Exclusion:
A provision in
an insurance policy that denies coverage for certain losses,
locations, people and properties.
High-risk driver: If you have accidents or tickets on your driving record, many insurance companies will classify you as a high-risk driver and charge you more for insurance.
