Important car insurance terms to know

By Product Expert | Posted in Tips on Thursday, January 24th, 2019 at 7:52 pm
person signing papers, animated car in thought bubble

Car insurance is rarely something that we like to talk about. In fact, it’s pretty much the most boring subject imaginable. Nonetheless, it is something that needs to be brought up from time to time because, as boring as it is, it is important. There are some important terms that you should know, and we’re here to help. Continue reading to learn more. 

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5 car insurance terms you should know 


This is one of the most commonly-referred-to terms when discussing any type of insurance. Your deductible is simply the amount of money you pay out of pocket before your insurance company covers the rest of the claim. Car insurance deductibles typically range between $0 and $1,500. If you file a claim and have a $1,000 deductible, that is the amount you owe the insurer. After the deductible is paid, the company will process the claim.

Premium salesman showing car to customer

Your monthly premium is directly related to your deductible. A premium is what you pay every month, regardless of if you file a claim or not. If you want a lower premium, you likely will have a higher deductible. If you want a lower deductible, chances are your premium will go up. 

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Comprehensive coverage 

While most kinds of car insurance are meant to cover collision damages, comprehensive coverage goes further than that. Depending on your insurer, this type of coverage can protect you from theft, weather damage, damage from a falling object, or damage from natural disasters. 

Collision coverage 

As obvious as this one may be, it’s important to know that it might not always be included in your coverage package. If your car is damaged when another vehicle hits it, collision coverage has your back. There is no law requiring you to purchase collision coverage, but many drivers do. Payouts are often limited to the cash value of your car, so if you have an older car, collision coverage might not be worthwhile. 

Bodily injury liability 

If you cause a collision that results in someone else being hurt or even killed, this insurance is meant to protect you. It helps to fund your legal defense in the event that you are sued or charged, and it can pay for lost wages or medical expenses. Contact your insurance provider to learn more about car insurance terms. 

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