Common Auto Insurance Terminology

When shopping for auto insurance, you may be bombarded with phrases and terms that you don’t know. Unless you’re familiar with an auto insurance policy, looking at online quotes can be daunting and confusing. We’ve compiled a list of common terms in an auto insurance quote to help you understand your policy a bit better. Once you know what a policy can cover, you are better equipped to find the right coverage for your needs!

$25/50/15

You will see three numbers when you are buying liability coverage. They represent (in the $ thousands) your liability limits for per-person bodily injury, bodily injury for all persons injured in any one accident, and property damage liability. Most states require a mandatory minimum amount and insurance companies offer the option to purchase more.

Bodily Injury Liability Insurance (BI)

BI pays for injuries to other people when the insured vehicle’s driver is legally at fault.

Collision Coverage

This helps to pay for your vehicle damages if you cause a crash or have a one-car accident, such as hitting a lamppost.

Comprehensive Coverage

Even though it’s called comprehensive, it doesn’t pay for everything. This coverage helps to pay for repairs to your car after animal collisions, and non-collision issues, such as car theft, falling objects, fire, and more.

Declarations Page (“Dec Page”)

The first page of the insurance policy that generally includes your name, address, the insured property, its location and description, the policy period (how long the coverage will be in force), the amount of the insurance coverage, the premiums and additional specific information provided by the insured.

Deductible

This is the amount you have to pay out of pocket in a claim before the insurance will kick in to help. Choosing a higher deductible means that you are taking on more responsibility for the cost of repairs, and premiums are often lower because of this. However, bear in mind that this cost will be paid out of pocket, so it is wise to keep it at an affordable cost for your situation.

Personal Injury Protection (PIP)

This a package of first-party medical benefits that provides broad protection for medical costs, lost wages, loss of essential services normally provided by the injured person (e.g. childcare, housekeeping), and funeral costs. It is usually associated with a no-fault auto insurance system.

Property Damage Liability (PD)

This coverage is for when you damage someone else’s property with your vehicle. Usually, it’s someone’s car, but it can apply to other property such as buildings, utility poles, fences and garage doors.

Uninsured Motorist Coverage

This coverage protects you if you’re hit by a driver without insurance. If you don’t have uninsured motorist, and you’re hit by an uninsured driver, you may need to pay out of pocket for damages to your car.

Looking for the right coverage for your needs? For help securing auto insurance in your local area, visit the team at Tompkins Insurance Agencies.