Each and every industry tends to have its own specific language. The same case applies to the insurance industry. In this article, we will have a look at some of the most common insurance terms that you will definitely encounter in auto insurance so as to familiarize with them.
Meaning of some common auto insurance terms
• Insured/ policyholder
This refers to the vehicle owner who has purchased an auto insurance policy.
This refers to the insurance firm that provides the auto insurance coverage by selling various policies to vehicle owners.
This refers to the proportion of money out of the average cost that a policy holder agrees to contribute before the auto insurance firm can then come in to pay the remaining amount.
• Liability coverage
This refers to an insurance policy that provides coverage to other people’s property damaged and death or bodily injuries experienced by other people due to an accident that occurred as a result of your mistake.
• Insurance Limits
This refers to the maximum amount of money that the insurance firm will cover for as per the insurance policy purchased.
• Motor Vehicle report
This refers to the report that contains the driving history of a person and includes information such as violations and accidents that were recorded by a state’s motor vehicles department. It is very crucial to the auto insurance firms as it helps the set the premium rates.
• Personal injury protection
This is an extension in auto insurance that provides coverage to medical expenses of pedestrians, passengers and even the driver involved in the car accident unconcerned with the person responsible for the accident.
This refers to the written contract that vehicle owners buy from auto insurance firms so that they can provide coverage to various outcomes that may arise from car related accidents.
This refers to the amount of cash that you regularly pay to the auto insurance firm so that they can provide you with auto insurance coverage.
• Primary use
This means the work that the car is often used for.
• Primary/ principal driver
This is the individual that drives the vehicle most of the times.
• Rental reimbursement
This represents the coverage that assists you to compensate for the alternative means of transportation as you car is being repaired after an accident.