Auto Insurance Policy - Glossary

Auto Insurance Policy - Glossary

We have listed the most common auto insurance policy terms and coverage definitions below. We hope that this serves as useful for your educational needs.

Accident Forgiveness - In the event that you have accident, your policy premium would not be increased. Consult your agent for details.

Additional Equipment - Additional coverage for rims, tires, stereo equipment, etc.

Bodily Injury – Medical damage payable to others when an accident is your fault. It is usually stated in two parts.

Ie. 50/100 – This means that your policy in the event of a claim would reimburse the other party at $50K per person & 100K per accident regardless of the number of people in the other vehicle for their medical expenses due to the accident.

Collision – Provides coverage for damage to your vehicle in the event that you collide with another vehicle, property, etc. Your deductible would apply to damages from a collision accident if you are at Fault.

Comprehensive – Provides coverage for damage to your vehicle when it is not being driven. Such as theft, vandalism, acts of god, etc. Your deductible would apply to damages from a comprehensive when there is no other person or policy to claim against. Such as a hit and run.

Deducible - Your deductible amount is the amount of money you are responsible for as the insured before the insurance company begins payment.

Deductible Buyback – For additional premium, in the event that you have an accident, your policy deductible would be reduced or waived. Consult your agent for details.

Glass Coverage – In the event that you have a glass claim, your policy deductible would be reduced to a lower limit. Consult your agent for details.

Good Credit Discount – Discount given to insured’s with an above average credit rating.

Medical – This is the maximum amount of medical coverage your policy would pay out in the event of an accident whether or not you are at fault.

NOTE: It is important to understand that medical expense coverage on your auto insurance is not designed to replace a health insurance policy. It is designed to assist you with any out-of-pocket costs you may incur from your health insurance policy. Such as your out-of-pocket maximum deductible in your health insurance policy. This coverage usually comes in increments of $1K, $2K, 5K, 10K, etc.

Multi-Car Discount – When insuring more than one vehicle with the same company.

Multi-Policy Discount – When insuring your autos and your home with the same company.

New Car Replacement – In the event that your car is involved in an accident and is deemed a total loss, the insurance company would pay the necessary cost to replace your car with a new vehicle. Consult your agent for details.

Property Damage – This would cover any damages you have caused to another person’s vehicle or property.

Rental Car Coverage – Provides you with a rental car while your vehicle is in the shop for any covered loss. Companies usually have different levels of coverage from which you may choose. May differ from company to company. Speak to your agent for details.

Residual Debt Coverage – Also known as “gap coverage” would pay the amount you owe on your vehicle to your bank, above what the insurance company determines the value of your vehicle.

Towing – Provides towing service for your vehicle. In most cases you will need to pay up front and submit the receipt to your agent for reimbursement. May differ from company to company. Speak to your agent for details.

Uninsured/Underinsured Motorist – Uninsured Motorists would cover your medical expenses in the event the other driver at fault is not insured. Underinsured Motorist would add medical coverage to your existing medical amount in the event the other driver at fault does not have sufficient liability coverage to cover your medical expenses up to the limits of your policy. It is usually stated in two parts.

Ie. 50/100 – This means that your policy in the event of a claim would reimburse the other party at $50K per person & 100K per accident regardless of the number of people in the other vehicle for their medical expenses due to the accident.

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DISCLOSURE: All entries by QuoteFishing.com are for informational purposes only and it is always recommended that you consult with your local insurance agent as coverage, definitions and claims procedures may differ from state to state.