Car Insurance Terms Everyone Should Know
Almost every state in the U.S. requires you to have auto insurance, but do you really understand all the terms and conditions described in your policy? It can be difficult to learn the jargon included in auto insurance policies and some companies aren’t always as transparent as they should be when explaining your coverage in detail.
At Lindow Insurance, we work hard every day to ensure our customers get the best coverage for their needs at the best possible price. A large part of that involves making sure our customers are as educated as possible about their policies. Below we define and describe some key car insurance terms you should know when reviewing your auto insurance policies.
A deductible is the money you pay out of pocket before an insurance company covers the rest of the claim. Your deductible depends on what policy you choose and which insurance company you go through. The deductible amount usually ranges from $500 to $1,500.
A premium is the amount of money an insurance company charges to provide coverage. Premiums get paid on a variety of timelines. This includes yearly, every six months or monthly and depends on your driving record and age.
- Liability Insurance
Liability insurance is the type of insurance paid when the insured is legally responsible for damages or bodily injury. There are typically two main types of liability insurance: bodily injury and property. Bodily injury covers you in case you cause major injury or death to another person and property covers you if you damage someone else’s vehicle or other property.
- Collision Coverage
Collision coverage is important because it pays to repair or replace your vehicle if you are in a collision and no one else is at fault. It’s important for our customers in Wisconsin to know that collision coverage does not cover collisions with animals, such as deer.
- Comprehensive Coverage
This type of coverages applies to damages caused by something other than a collision. These damages could include fire, theft, flood, falling tree limbs or branches, etc. Comprehensive coverage is also referred to as Other-Than-Collision (OTC) coverage by your insurance provider. It’s important to mention that comprehensive coverage provides coverage for a collision with an animal that causes damage to your vehicle.
- Uninsured Motorist Coverage
Another important type of coverage is Uninsured Motorist Coverage. As the namesake suggests, this type of coverage makes sure you’re protected if an uninsured driver hits and damages your vehicle.
- Actual Cash Value (ACV)
The Actual Cash Value (ACV) is a method of valuing insured property and is defined as the value of the vehicle at the time the loss occurs. There are a variety of different factors that go into calculating this value, including condition and mileage. Insurance companies will also use a variety of sources (NADA, CCC, etc.) to come up with this approximate value.
As always, our team of knowledgeable agents are always here to help! Give us a call today with any questions or concerns you might have or if you’d simply like to review your policies!