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Breaking Down Insurance Lingo: The Ultimate Guide to Auto Insurance Terms

Posted in: Auto Insurance | by Riders Plus | December 31, 2019

Let’s say you have your first meeting with a new insurer. You want to go in with your head held high and not look confused when insurance terms arise, right? In this article, we break down auto insurance terms. We always try our best to speak in terms everyone understands, but it never hurts to be in the know of the vocabulary we use here behind the scenes. These auto insurance terms will also help you better understand the basics when you are shopping around for an insurer.

Basic Terms You Need To Know

Insured

Being insured implies that a person or thing is covered by an insurance policy. If a person, place, or thing has any form of insurance coverage, they are insured.

Quote

A quote refers to an assessment of what your insurance is going to cost you. Quotes are made based on both the coverage you have selected and all of the information you provide the insurer. Quotes aren’t the exact amount you will pay, but are estimates and are usually rather close to what your final cost will be.

For those with little time that can’t go to an insurer and discuss insurance, which, given the hectic Canadian lifestyle, is probably true, you can make use of our easy online quoter and find out how much your insurance will cost you in just a few clicks!

Claim

An auto insurance claim is a request made by the insured to the insurance company. Claims cover compensation for any damage sustained after a car accident and they can be made online, by phone, or in writing.

Deductible

Your deductible is the portion of money you must pay for repairs or anything else before your insurance coverage starts helping you. As an example, if you had a policy that had a

auto insurance terms you need to know

$300 deductible and you were in an accident and your vehicle needed a repair that cost $800, you would pay the first $300 and your insurance would cover the other $500.

Premiums

Your auto insurance premium is the amount of money you pay your insurance company consistently – usually on a monthly, bi-yearly, or yearly basis for insurance coverage. Each insurance company has different ways of determining what your premium rate will be, but they are usually based on details about you, your car, and the coverage you need.

Carrier

The term carrier refers to the insurance company that actually issues and holds your insurance policy. This is the company in which your premiums are sent. The term is used due to the company assuming or carrying certain risks for the insured.

No-fault Insurance

No-fault insurance is when each insured person has their claim paid by their insurer, regardless of who was at fault in the accident.

Types of Coverage

auto insurance coverageWhen looking for insurance you want to make sure you know the different forms of coverage you can get for your automobile. Different forms of coverage cover you for the different things you may face when you get into an accident – think of it as a safety net for any potential bad days. We will start with the coverage that is mandatory by law in order to legally drive a vehicle.

Liability Coverage

Liability coverage protects you if you were involved in an accident that you were held liable for the injury or death of other people. It will also cover damage to their vehicle or any property within the vehicle.

Accident Benefits

Accident benefits provide compensation if you, a passenger in your vehicle, or pedestrians are hurt or, in the worst case, killed in a car accident. This covers funeral costs, medical bills, or loss of income due to disability.

Direct Compensation Property Damage

Direct compensation property damage coverage is for damage done to your vehicle or property when you were involved in an accident when the other driver was at fault.

Optional Coverage

Optional coverage refers to any coverage on your policy that is not required by law. These forms of coverage are not mandatory but are the more popular forms of optional coverage that people tend to choose.

Collision Coverage

Collision coverage pays for any damage to your vehicle that has come about due to a collision with another vehicle or object. Collision coverage covers the repair costs of a collision where you are found at fault or your vehicle was damaged by an unidentified vehicle.

Comprehensive Coverage

For more comprehensive coverage, you may want to consider comprehensive coverage. This type of coverage pays for damage done to your vehicle as a result of something other than a collision like fire, weather, vandalism, theft or other causes.

Bodily Injury Coverage

Bodily injury coverage pays for medical expenses or funeral costs of others who were injured or killed in an accident where you were at fault.

Medical Payments Coverage

Similar to bodily injury coverage, medical payment coverage pays for medical expenses or funeral costs of others who were injured or killed in an accident, but regardless of who was at fault.

Uninsured Motorist Coverage

Uninsured motorist coverage pays for injuries either you or another occupant sustained as a result of a collision with an uninsured driver who is at fault.

Now that you are armed with the knowledge needed to speak about auto insurance, you can have meetings with your insurer and look confident and well informed. More importantly, these terms will help you find and understand which auto insurance policy is best for your needs.

At Riders Plus Insurance, we help our clients get the best protection for their car, motorcycle, home, RV, and other valuables through affordable rates and comprehensive policies. Protect more of what you care about. Simply call us to get a quote that meets your home, auto and motorcycle insurance needs. Call 1-888-784-7235 to speak with an advisor.

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