Auto Insurance Glossary
An auto insurance glossary is often helpful to individuals that are not familiar with insurance. There are many terms that are used in regards to insurance and knowing what the terms mean can help you better understand insurance and what it can do for you. Following are some of the more commonly used terms.
Applicant - The person whose applies for the insurance and whose name is on the policy.
Application - A written statement filled out by an applicant when they first attempt to get an insurance policy.
Appraisal - A survey by a claims appraiser working for the insurance company determining the extent of the damages and the cost of repairs resulting from an accident.
Basic Limits - The lowest amount of coverage you can get in your auto insurance policy.
Bodily Injury - Injury to a person's body. The amount of bodily injury coverage is the amount the insurance will pay for injury resulting from an accident.
Collision - A term on your auto insurance policy used when your car needs to be repaired from a collision with another vehicle or object. If you have collision insurance, your insurance company will get the other driver's insurance to pay if they were at fault.
Comprehensive - A term on your auto insurance referring to damage to your vehicle by any cause other than collision. Trees falling on your car, vandalism and deer accidents are all examples of damage that is paid for from your comprehensive coverage.
Claim - When you make a demand for money from your insurance company for some kind of damage done to your car.
Cancellation - Termination of your insurance policy. Cancellation can be done by the policyholder or by the insurance company.
Declarations - The part of the policy that describes all the important information about this particular insurance policy including your name, address, description of your automobile, term of the policy and amount of coverage.
Deductible - The term referred to the amount that you will have to pay towards a claim. For instance, if your deductible is $500 and your damage amount it $5,000, you will have to pay the $500 and your insurance company will pay 4,500.
Depreciation - The amount of value that your car goes down in as it gets older.
Gap Insurance - Insurance on leased and financed vehicles. It's not available in all states and covers the difference between what you owe on the vehicle and what the vehicle is worth.
High-Risk Driver - An individual that has a poor driving record with traffic violations or has been in accidents and filed insurance claims. The premium for high-risk drivers is usually higher.
Liability Insurance - This policy does not cover damage to your vehicle. It only protects you against lawsuits from other individuals or insurance companies.
No-fault insurance - This style of insurance will pay for damages from an auto accident regardless of who is at fault.
Uninsured driver - A driver that does not have insurance. When you have uninsured driver insurance, it will pay for damages from an accident where the driver causing the accident does not have insurance.
Although there are many other insurance terms you may come in contact with, this auto insurance glossary should help you understand your insurance a little better.
