Car Insurance 101: 10 Terms you Need to Know.

 

Car Insurance 101: 10 Terms you Need to Know.

Here are 10 car insurance terms you should know:

1.    Premium: This is the amount you pay for your insurance coverage. It can be paid monthly, quarterly, semi-annually, or annually.

2.    Deductible: This is the amount you pay out of pocket before your insurance coverage kicks in. For example, if you have a $500 deductible and you get into an accident that causes $2,000 worth of damage to your car, you would pay the first $500 and your insurance company would pay the remaining $1,500.

3.    Liability Insurance: This is insurance that covers damages or injuries that you cause to other people or their property while you're driving your car.

4.    Collision Insurance: This is insurance that covers damages to your own car when you get into an accident, regardless of who is at fault.

5.    Comprehensive Insurance: This is insurance that covers damages to your car that are not the result of a collision, such as theft, vandalism, or natural disasters.

6.    Uninsured/Underinsured Motorist Coverage: This is insurance that covers you if you get into an accident with a driver who doesn't have insurance or doesn't have enough insurance to cover the damages.

7.    Personal Injury Protection (PIP): This is insurance that covers medical expenses and lost wages if you or your passengers are injured in an accident, regardless of who is at fault.

8.    No-Fault Insurance: This is a type of insurance that covers your own medical expenses and lost wages if you're injured in an accident, regardless of who is at fault.

9.    Named Driver Policy: This is a type of policy that only covers drivers who are specifically named on the policy.

10.                      Comprehensive Deductible Waiver: This is an option that allows you to waive your comprehensive deductible if your car is damaged by a covered peril, such as theft or a natural disaster.

Premium.

In the context of car insurance, premium refers to the amount of money you pay to an insurance company for coverage. It is usually paid on a monthly, quarterly, semi-annual, or annual basis. The premium amount is determined by a variety of factors such as the type of coverage you have, your driving history, your age, your location, and the make and model of your car. Generally, a higher premium will provide more coverage and benefits, while a lower premium will provide less coverage and benefits. It's important to choose a premium that fits your budget and provides adequate coverage for your needs.

Deductible.

In the context of car insurance, a deductible is the amount of money you agree to pay out of pocket before your insurance coverage kicks in to cover the rest of the expenses. For example, if you have a $500 deductible and you get into an accident that causes $2,000 worth of damage to your car, you would pay the first $500 and your insurance company would pay the remaining $1,500.

Deductibles are typically set by the insurance company and can vary based on the type of coverage and the policy. Generally, a higher deductible will result in a lower premium, while a lower deductible will result in a higher premium.

It's important to choose a deductible that you can afford to pay out of pocket in case of an accident, but also provides a balance between the cost of the deductible and the cost of the insurance premium.

Liability Insurance.

Liability insurance is a type of car insurance coverage that protects you if you are found responsible for causing damage to another person's property or for injuring someone in a car accident. Liability insurance coverage is mandatory in most states in the US and typically includes two types of coverage: bodily injury liability and property damage liability.

Bodily injury liability coverage pays for the medical expenses, lost wages, and other damages that may result from injuries sustained by other people in an accident that you caused. Property damage liability coverage pays for the cost of repairing or replacing the other person's property that was damaged in an accident that you caused.

Liability insurance coverage limits are typically expressed as a set of numbers, such as 25/50/25. This means that the policy will cover up to $25,000 per person for bodily injury, up to a total of $50,000 per accident, and up to $25,000 for property damage.

It's important to choose liability insurance coverage that provides adequate protection for your assets and financial situation in case of an accident. If the damages exceed your policy limits, you may be held responsible for the remaining costs.

Collision Insurance.

Collision insurance is a type of car insurance coverage that pays for damages to your own car in case of a collision, regardless of who is at fault. This coverage is designed to help cover the cost of repairing or replacing your car if it is damaged or totaled in an accident.

Collision insurance typically has a deductible, which is the amount of money you agree to pay out of pocket before your insurance coverage kicks in to cover the remaining expenses. For example, if you have a $500 deductible and you get into an accident that causes $2,000 worth of damage to your car, you would pay the first $500 and your insurance company would pay the remaining $1,500.

Collision insurance is not mandatory by law, but it is usually required if you are financing or leasing your car. It can also be a good idea to have collision insurance if you have a newer or more expensive car, as the cost of repairs or replacement can be high.

It's important to choose a collision insurance policy with a deductible that you can afford to pay out of pocket in case of an accident, and to make sure that the policy provides adequate coverage for your car.

Comprehensive Insurance.

Comprehensive insurance is a type of car insurance coverage that provides protection for damages to your car that are not caused by a collision, such as theft, fire, vandalism, or natural disasters. This coverage is designed to help cover the cost of repairing or replacing your car if it is damaged or stolen.

Comprehensive insurance typically has a deductible, which is the amount of money you agree to pay out of pocket before your insurance coverage kicks in to cover the remaining expenses. For example, if you have a $500 deductible and your car is damaged in a hailstorm that causes $2,000 worth of damage, you would pay the first $500 and your insurance company would pay the remaining $1,500.

Comprehensive insurance is not mandatory by law, but it is usually required if you are financing or leasing your car. It can also be a good idea to have comprehensive insurance if you have a newer or more expensive car, as the cost of repairs or replacement can be high.

It's important to choose a comprehensive insurance policy with a deductible that you can afford to pay out of pocket in case of an accident, and to make sure that the policy provides adequate coverage for your car.

Uninsured/Underinsured Motorist Coverage.

Uninsured/underinsured motorist coverage is a type of car insurance coverage that protects you if you are in an accident with someone who does not have insurance or does not have enough insurance to cover the damages.

Uninsured motorist coverage provides coverage for your own injuries and damages, while underinsured motorist coverage provides coverage for damages that exceed the limits of the other driver's insurance policy.

Uninsured/underinsured motorist coverage is not mandatory in all states, but it is highly recommended as it can provide added protection in case of an accident with an uninsured or underinsured driver. It can also provide peace of mind knowing that you are protected if you are hit by someone who does not have adequate insurance coverage.

It's important to choose uninsured/underinsured motorist coverage that provides adequate protection for your assets and financial situation in case of an accident. The coverage limits for this type of coverage are usually expressed in the same way as liability coverage, such as 25/50/25, and you can choose a limit that fits your needs and budget.

Personal Injury Protection (PIP).

Personal injury protection (PIP) is a type of car insurance coverage that pays for medical expenses, lost wages, and other expenses related to injuries sustained by you or your passengers in a car accident, regardless of who is at fault.

PIP coverage is mandatory in some states, while in others it is optional. In states where it is mandatory, it is often referred to as "no-fault" insurance, as it is designed to cover your expenses regardless of who caused the accident.

PIP coverage typically includes medical expenses, lost wages, and other related expenses, such as childcare or housekeeping services. The coverage limits for PIP are usually expressed as a set of numbers, such as $10,000 or $20,000, and you can choose a limit that fits your needs and budget.

It's important to choose PIP coverage that provides adequate protection for your assets and financial situation in case of an accident. If you have health insurance or disability insurance, you may not need as much PIP coverage. However, if you don't have these types of insurance, PIP coverage can provide valuable protection in case of an accident.

No-Fault Insurance.

No-fault insurance is a type of car insurance system where your own insurance company pays for your damages and injuries sustained in a car accident, regardless of who was at fault for the accident. This means that regardless of who caused the accident, each driver's own insurance company pays for their damages and injuries.

No-fault insurance is mandatory in some states, while in others it is optional. States that have no-fault insurance laws often require drivers to carry personal injury protection (PIP) coverage, which pays for medical expenses, lost wages, and other expenses related to injuries sustained in a car accident.

The purpose of no-fault insurance is to streamline the process of resolving accident claims and reduce the burden on the court system. It can also provide faster compensation for injured parties and reduce the number of lawsuits filed after accidents.

However, no-fault insurance laws vary by state and can be complex. It's important to understand the laws in your state and the coverage options available to you.

Named Driver Policy.

A named driver policy is a type of car insurance policy that covers only the drivers specifically named on the policy. This means that only the drivers listed on the policy are covered, and any other drivers who use the car are not covered.

Named driver policies are often used when the main driver of a vehicle is not the owner, such as in the case of a parent buying car insurance for a young driver. By only naming the young driver on the policy, the parent can save money on insurance premiums.

However, named driver policies can also be used in situations where the primary driver of a vehicle has a poor driving record or is considered high-risk, and the owner wants to limit their liability by not allowing others to drive the car.

It's important to note that named driver policies may not provide coverage for all situations, such as if the named driver allows someone else to drive the car and an accident occurs. Additionally, named driver policies may not provide coverage for damages to the car or liability coverage in case of an accident, depending on the specific policy. It's important to review the policy carefully and understand the coverage limitations before purchasing a named driver policy.

Comprehensive Deductible Waiver.

 A comprehensive deductible waiver is an optional coverage that can be added to a car insurance policy. It waives the deductible (the amount the policyholder is responsible for paying out of pocket) for comprehensive coverage claims.

Comprehensive coverage typically covers damage to a vehicle that is not caused by a collision, such as theft, vandalism, fire, or weather-related damage. If a policyholder has a comprehensive deductible waiver, they would not be responsible for paying the deductible if they make a claim under this coverage.

Adding a comprehensive deductible waiver to a car insurance policy can provide peace of mind and save money in the event of a covered loss. However, it's important to note that adding this coverage may increase the cost of the insurance premium.

It's important to review the details of the coverage and the deductible waiver to determine if it's right for you and your budget. Additionally, it's important to consider your specific risk factors, such as the likelihood of theft or damage from severe weather, when deciding whether to add this coverage to your policy.

 

Does Uber Insurance Cover Passengers?

Yes, Uber does provide insurance coverage for passengers while they are riding in an Uber vehicle. Uber provides commercial auto liability insurance that covers up to $1 million per incident for bodily injury and property damage to third parties, including passengers. This insurance coverage is in effect from the moment a passenger enters an Uber vehicle until they are dropped off at their destination.

In addition to the commercial auto liability insurance, Uber also provides uninsured/underinsured motorist coverage that can provide protection if the at-fault driver does not have insurance or does not have enough insurance to cover the damages.

It's important to note that Uber's insurance coverage applies only when the driver is using the Uber app and is available to accept rides or is actively transporting a passenger. When the driver is offline or not using the Uber app, the driver's personal insurance coverage would apply.

 

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