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:
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.
