Insurance Terms - Defined.
- Jul 23, 2016
- 2 min read
It’s important to understand your coverage before you need it. Take a look at some of the most commonly used insurance terms and what they mean.
Bodily Injury Liability - If you are deemed at fault in a car accident, liability coverage will pay for repairs, medical costs for injuries suffered by others in the vehicle, plus other expenses related to the accident such as legal fees. Your liability limits are set at the time you purchase your policy. The limits are the maximum amount the policy will pay out; anything above that would come out of your pocket unless you have other insurance.
Property Damage Liability - This covers the cost to fix any physical damage to property of others. When selecting your limits for this think about it this way… is your limit high enough to cover the total loss of a Mercedes? If you are in an at fault accident and the damage exceeds your limits YOU are responsible for coming up with the rest of the money.
Uninsured Coverage - If someone without insurance were to hit you, this part of your insurance would cover your damages.
Underinsured Coverage - If someone hits you and isn’t carrying high enough limits to cover your medical expenses up to your limits.
Deductible - This is the amount the insured is responsible for paying in the event of a claim. The higher the deductible the lower the premium.
Stacking - Stacking coverage applies when you are insuring two or more cars. This allows you to “stack” the limits from each of your vehicles, making a higher total limit in case of a serious accident.
Medical Coverage - This covers medical damages to you, your family or any guests you have riding in your cars recovery and rehabilitation within 18 months of the accident.
Comprehensive Coverage - This pays for losses to your vehicle if it suffers damage from something other than an accident, like a deer or a tree.
Collision Coverage - If you hit another vehicle or an object (like a light post), your collision coverage will pay for damages or repairs to your vehicle after you pay a deductible.
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