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.
3 Steps Every Car Buyer Needs to Take to Save Maximum MoneyThe key to getting the best deal is to gather price or lease bids from as many local dealers as possible. Then shop that best price around until no one can beat it. Here are the steps:
Step 1 Get Prices From My Trusted NetworkSelect the vehicle you're interested in to see if there are local dealers in my network who will provide you with their best upfront price. You will get direct access to an internet sales manager who you can further negotiate with online (no need to visit dealership).
Step 2 Get Prices From TrueCar / CarsDirectTrueCar, and CarsDirect are my top 2 online price quote recommendations. These services show you pre-negotiated prices from dealers closest to you - and the deals are usually pretty decent. But remember, you can still negotiate further.
Step 3 Complete my ChecklistFollow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan
Each week, I'll keep you up-to-date on the latest car deals and news that might affect your purchase. This includes...
- Best Rebates, Incentives, and Lease Deals
- Latest Car Buying Scams and Tricks
- The Best & Worst Time to Buy a Car
- Which Cars You Should Avoid