Having car insurance is essential and also a necessity by law if you drive a car. Insurance cover can help you in different ways, and you can choose from numerous options when shopping for a policy. These are some must-know car insurance terms that can help you choose a suitable policy that best fits your requirements:
- Collision insurance: If your car is in an unfortunate accident like a collision, this kind of insurance coverage covers your losses. If the damage on the vehicle is due to your or someone else’s negligence, this kind of cover can be used to get them fixed. Deductibles are an integral part of this kind of insurance, and the amount of premium relies on the deductible. A high deductible will result in lower premium rates.
- Comprehensive insurance cover: A vehicle can incur damages other than collisions too, and that’s exactly what this type of insurance provides cover for. Getting comprehensive cover is one of the common entries on the list of must-know car insurance terms. Comprehensive cover can include more than one vehicle that you generally drive, and insurance companies usually cover the costs of damage incurred due to thefts, floods, and vandalism. The points covered can vary for every policy and are clearly mentioned in the documentation.
- Liability insurance cover: This can be defined as the bare minimum amount of coverage that you must have. If you’re responsible for an accident or anything else that damages your car, this type of insurance helps pay off the other party. That being said, the damage to your vehicle is not included in the liability cover.
- Deductible: Another must-know car insurance terms, you must have heard about deductibles a lot. It is the amount you have to pay from your end before the insurance cover kicks in to cover the rest.
- Gap insurance cover: If you owe any extra amount on your car loan, a gap insurance policy covers it. If the amount that the insurance provider gives is less than what you owe to the bank, the difference is paid by the insurance company.
- Multi-policy discount: Almost every insurance provider extends financial benefits to people who take more than one insurance policy from their company. So, try to bundle up multiple policies from the same company to get more benefits.
- Declaration: A summary of your entire auto insurance policy is mentioned in this document. The breakdown of the insurance coverage, along with other details like the premium, coverage costs, total duration of the insurance, and the insured vehicles and drivers, are clearly stated in this document.
The above-mentioned must-know car insurance terms can help you understand the concepts of insurance and make a smart decision. Getting the right insurance cover provides you with multiple benefits in the long run.
