Common Car Insurance Terms to be Familiar With

Benefit - The amount the insurance company pays when you file a claim.

Bodily Injury Liability - This covers the medical expenses for injuries caused to other people.

Claim - Request for reinbursement for damages or loss.

Collision Coverage - Covers damage caused to your car during an accident with another vehicle or stationary object.

Comprehensive Coverage - Covers damage that isn't caused due to an accident - such as theft, fire, or natural disasters.

Deductible - This is the amount you agree to pay out of pocket in the event of an accident. The higher your deductible, the lower your premium.

Discount - Anything that will lower your premiums. Common discounts include multi-car discounts, good driving discounts, and safety devices discounts.

Emergency Road Service - Pays for the cost of having your car towed or jumped in the event of a breakdown.

Endorsements - These are changes to the original insurance contract, such as adding a driver to the policy.

Exclusion - Anything that is not covered by the insurance policy.

Extraordinary Medical Coverage - This coverage protects you in case you suffer injuries that require serious or long-term medical care.

Full Coverage - This means that you have met all the minimum coverage requirements for the state you reside in. This doesn't necessarily mean you will be covered in all accident situations.

High-Risk Driver - Someone that has several accidents or tickets on their driving record. The definition of high risk driver dffers from company to company.

Income Loss Coverage - Covers you in case you can't work due to accident-related injury. Sometimes it's a part of personal injury protection.

Indemnity - A predetermined amount paid for a covered loss.

Liability Insurance - Covers injuries and damage caused to other people and property in an accident which you are at-fault. This includes legal expenses.

Limits - The maximum amount the insurance company will pay for your losses.

Medical Payments Coverage - Pays for the medical expenses and lost wages for you and any passengers in your vehicle after an accident. Also known as personal injury protection (PIP).

No-fault Insurance - Certain states have no-fault insurance regulations where the car insurance company will pay for your injuries no matter who is at fault.

Personal Injury Protection (PIP) - See Medical Payments Coverage

Premium - The amount charged for an insurance policy.

Property Damage Liability - Pays for damages caused to someone else's property.

Rental Reimbursement - Pays for the cost of a rental car while your car is in the shop for repairs.

Surcharge - Charge added to your policy after a traffic violation or accident where you were at fault.

SR-22 - Document that shows proof of insurance.

Underinsured Driver Coverage - Covers injuries or damage caused by a driver without enough insurance to pay for your medical expenses.

Uninsured Driver Coverage - Covers injuries or damage caused by a driver with no insurance.