When you buy auto insurance it’s good to know what you’re getting. Just like buying most things you want to know what it is you’re paying for and what it does for you. For auto insurance there are some terms everyone should be familiar with.
Collision is the kind of coverage that pays for damages to your vehicle, no matter who is at fault. Collision is always good to have as it will make sure your car is taken care of. When you finance a new car, you will likely be obligated to cover it with collision.
Comprehensive coverage pays for damage to your car or truck not caused by a collision with another vehicle. Things such as acts of vandalism, your car being stolen, or your car is damaged during a storm or other type of event.
Most people know what the Deductible is. This is the amount you pay out of pocket for repairs when making a claim before your insurance kicks in. The higher your deductible, the lower your monthly payments.
Declarations page is where a summary of your coverage is listed. This includes the kind of coverage you have, the limit and cost for each and what vehicle is covered. This is a good part of your contract to be familiar with if you want to understand your policy.
Liability insurance is the minimum amount of insurance you need to carry. It pays for damages and injuries to the other party in an accident of your fault but does not pay for any damages/injuries to you or your vehicle. Liability is an important part of your policy to understand because it will explain the limits that your insurance will cover when you are found at fault in an accident.
Become familiar with these terms and you will find it easier to understand what you are getting when you buy auto insurance.
