I tried reading my car insurance policy to get to know my coverage, but the language in the document is really confusing me. What does it all mean?

Percy

Great question, Percy.

Thousands of people go about their day to day lives as policy holders while never knowing much beyond their insurance policy than that they have what is required. Few learn all of the terms and practices associated with filing a car insurance claim, and the language that the car insurance companies use in their policy is mostly unknown. For anybody who does not have much experience in the world of claims and coverage, that first look at a car insurance policy can need a translator. Here are a few phrases and words that often show up in a car insurance policy.

1. Actual cash value, which is the dollar amount that you get in your claims check when you total your car. This is the worth that your car is valued at, after things such as depreciation and previous repairs.
2. Benefit, which is your car insurance claim settlement.
3. Bodily injury liability is the type of coverage, usually required by state, that takes care of the medical or funeral expenses of a person injured or killed in a crash in which you are at fault.
4. Claim is when you file to get reimbursed for coverage in your car insurance policy after an accident.
5. Collision, is coverage that repairs or replaces your car in an at fault automobile accident.
6. Comprehensive is car insurance coverage that covers things like floods, theft, and vandalism.
7. Deductible is the amount that you have to pay before your actual car insurance coverage kicks in.
8. Endorsements are additions or alterations to your first policy, such as adding a vehicle.
9. Exclusions are what you do not have car insurance coverage for, such as perhaps a mechanical breakdown.
10. Extraordinary medical coverage is like an umbrella policy for medical coverage, in case you need to be taken care of on a long term basis.
11. Income loss coverage is when you miss work due to an auto accident and you file a claim for lost wages.
12. Indemnity is the limit of your coverage.
13. No fault insurance is when the medical damages are taken care of by a person’s insurance provider instead of that of the at fault driver.
14. SR 22 is a form you have to file when you are required to maintain proof of insurance after a DUI or speeding ticket.
15. Tort is when you can freely file a lawsuit for emotional damages and requires that claims be paid by the at fault driver’s insurer.

Cheers,

Fashun Guadarrama.