Car Insurance Terminology: Understanding Definitions Such As Comprehensive Coverage, Collision Coverage, Named Insurer, Insurance Waiver and Much More.

Buying car insurance is not always the easiest task considering the fact that there are professional terms involved, terms not always understandable by the layman.
We have put together a list of terms and their meanings that are widely used in car insurance policies.

Additional Interest Insured

Another company or person who might be liable for an accident and who has been named under the policy as an Additional Interest Insured

Anti-Theft Device

Is a device that helps prevent vehicle theft.  There are active and passive Anti-Theft Devices.  Active anti-theft devices track a vehicle and Passive anti-theft devices help prevent theft by using steering wheel locks or electronic car alarms.

Bodily Injury Liability Coverage (BI)

A BI coverage plan in car insurance covers and pays for injuries or death of people (other than the insured driver) involved in an accident. If in case the driver is sued, Bodily Injury Liability Coverage pays for the Defense cost too.

Comprehensive Coverage

Comprehensive Coverage is a car insurance coverage that pays for the damages that happen not by a collision. It covers damages caused by theft, vandalism, windstorms, fire, flood, etc.

Collision Coverage

Collision Coverage is a car insurance coverage that pays for damage to your vehicle when it collides with another vehicle or object

Collision Deductible Waiver

In case an uninsured driver caused an accident, having this coverage means that the car insurance company will pay for your selected deductibles if you have been involved in an accident that is the fault of the uninsured driver.

Full Coverage

Full Coverage is a term that describes how much car insurance coverage the driver has and usually relates to a policy that covers more than Liability coverage only.

Liability Coverage

Liability Coverage Is an Insurance that provides compensation for the harm done to a third party by an insured person that legally is obligated to pay.
Liability insurance protects the insured person from having to pay for damages to people if he or she has been found responsible for that injury or damage.

Named Insured

Named Insured relates to the first person whose name is on the insurance policy.

Occasional Driver

The person who is not the primary or principal driver of the vehicle is termed Occasional Driver. This driver, (such as a son or daughter of the insured), will occasionally operate the vehicle.

PIP Coverage

- Personal Injury Protection (PIP or MEDEX):
PIP covers medical, hospital and funeral costs of the insured. PIP covers these expenses with no regard to fault. It is available only at some states and the amount of coverage varies.

Policy Limits

The driver that holds the car insurance selects a car insurance coverage limit. Most states in the USA have laws that specify the minimum limit, a limit that has to be purchased for every insurance coverage.

Policy Expiration Date

Policy Expiration Date is the date a current insurance policy expires. Policy Expiration Date can be found on the insurance identification card, Declaration page or recent cancellation notice.

SR-22

An SR-22 is a vehicle liability insurance document that is used by some state DMV – Department of Motor Vehicles offices.  A DMV usually requires an SR-22 to reinstate uninsured drivers driving privileges following a car accident or conviction of another traffic-related offense. SR-22 provides proof that a driver has the minimum required liability insurance coverage for that particular state.

Of course, there are more terms in the insurance jargon, but these are the basic terms that will help the driver when he or she are about to purchase a car insurance.

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Tagged with: Additional Interest Insured • Anti-Theft Device • Bodily Injury Liability Coverage (BI) • Car Insurance Definitions • Car Insurance Terminology • Collision Coverage • Collision Deductible Waiver • Comprehensive Coverage • Full Coverage • Liability Coverage • Named Insured • Occasional Driver • PIP Coverage • Policy Expiration Date • Policy Limits • SR-22

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