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Home / How Do The Figure Out The Rates? / Insurance Terminology Explained!


 

 


Comprehensive and collision

coverages are the physical damage coverages for your vehicle. While comprehensive coverage insures your vehicle against damages that are out of your control, such as fire, theft and acts of nature, collision coverage insures your vehicle against damages you cause to your car when hitting something. Both coverages require a deductible, which you get to select at the time of your insurance purchase.

 

Deductible

 

Insurance deductibles help auto insurance carriers to reduce their overall risks in the vehicles and drivers they insure. Unlike the property damage liability coverages that mandate a $200 to $250 deductible, comprehensive and collision coverage come with deductible options. The options range from $100 to $2000, depending on the carrier and the policy's specifics. The most common deductible selections range from $100 to $500.

 

Selections

 

There will be an increase in premium when you add comprehensive, collision, or both coverages to your policy. However, the amount of increase is partly determined by your selected deductible. A higher deductible will result in a somewhat lower premium. This is because the higher deductible selection lowers the insurance carrier's risk.

Liability Insurance

Liability insurance has two components always included together: Bodily Injury coverage and Property Damage coverage.Liability insurance is the basic insurance coverage that covers injuries or damage to other people or property if you're at fault for an accident.

If you cause an accident that injures or even kills another person, the Bodily Injury (BI) portion of your Liability insurance will pay for the related expenses. Bodily Injury (BI) will cover hospital and medical bills, rehabilitation, long-term nursing care, funeral expenses, lost earnings, pain and suffering, and other expenses, up to the limits you select.

If you cause an accident that damages another person's property, the Property Damage (PD) portion of your Liability insurance will pay for the related expenses. Property Damage (PD) will cover the expense to repair or replace damaged items, including other vehicles, lamp posts, houses or even a pet, up to the limits you select.

What is Inside Your Driving Records

Do you know whats in your driving record? The DMV keeps a history of all the violations, conviction, collisions and departmental actions which you have incurred. Your driving records will contain information about any accidents you were part of, how many demerit points you collected, unpaid parking tickets and any DUIs which your were convicted of. 

Driving Records are Important

Driving records are used extensively by insurance companies for determining what premiums you should pay. If you don't know whats in your driving record then you could be paying unnecessarily high premiums. Driving records are also used by employers as part of their screening process, even if the job will not involve driving. Whats more, you might be passed over for jobs because some companies will consider any blemish on you driving record unacceptable.