Auto Insurance Terms You Need to Know

Auto insurance can get confusing, we’re here to help with that! Below is a list of common auto insurance terms easily explained.

Coverage: The protection and benefits provided by the insurer in an insurance contract.

Premium: The amount stated in your policy that you pay your insurance company in exchange for coverage.

Deductible: The amount you pay out of pocket before your insurance company covers the rest of the claim. Going with a higher deductible will mean lower insurance premiums.

Claim: This means a request for payment under the terms of your insurance policy.

Property Damage: This is the damage you cause to another person’s property; their vehicle, home, storefront, etc.

Add-on Covers: Add-on covers are additional covers that you can purchase to enhance the coverage of your policy. An add-on cover can be purchased by the same insurance company by paying an extra premium over your existing car insurance premium amount. Some add-ons offered by almost all motor insurers include dero depreciation cover, engine protection cover, NCB retention cover, and more.

Declarations Page (“Dec Page”): This refers to the summary of your coverage, often the first page of your policy which includes your name, address, the insured property, its location, description, the policy period, the covered amount, premiums, and additional information provided by the insured.

Insured Value: This term means the total amount the insurance company will pay if your vehicle is damaged beyond repair.

Liability insurance: This is a part of your policy that helps pay for damage and injuries sustained by the other party in an accident that’s your fault.

Acts of God/Nature: This refers to any event which people (humans) have no influence or control over. For example, natural calamities such as floods, earthquakes, etc.

Accident Forgiveness: Additional coverage to your policy where your rate won’t go up as a result of your first accident where you are at fault. Only some qualify for accident forgiveness.

Still have questions? Centro Hispano is always here to help! Call us today and one of our agents will gladly assist you.