Comprehending a Car Insurance Quote: Terminology to Know

When searching for affordable car insurance, it’s typically best to shop around. Comparing at least three (or more!) quotes from different insurance companies can ensure you find the best deal for your budget. 

However, there are a lot of technical terms that you will encounter while shopping for quotes or even when making a claim on a policy you already have.  This makes comprehending a car insurance quote difficult. Knowing what these terms mean can help you make the best possible decision in regard to your insurance coverage.

Keep in mind that quotes will vary based on specific information, including your age and other personal details, your driving history, and the vehicle you are insuring. 

Here’s the important terminology for comprehending a car insurance quote.

Understanding Car Insurance Quotes

Remember that a quote is just a quote; it is not a guarantee that is locked in until you take specific actions to do so. The premium or other information is subject to change based on new information. 

Key Definitions

Here is a list of common terms you will encounter and what they mean:

• • • Additional Insured—Any other household members besides the driver who are covered by the policy. 

• • • At-Fault Accident—When you are to blame for an accident, and the insurance company covers to their limit the other party’s damage and injuries, plus any legal defense in the event of a lawsuit.

• • • Auto Insurance Claim—What you make when you need to request insurance to pay out for damages or injuries covered by your plan.

• • • Car Insurance Quotes—An estimate of how much a policy will cost.

• • • Collision Coverage—Protects you in the event of a car accident or a situation where only your car is involved, as in hitting a tree or other obstacle. 

• • • Comprehensive Coverage—Covers issues not involving a collision, such as falling trees or auto-theft. 

• • • Covered Incident—A valid claim that your insurance covers with their policy.

• • • Declarations Page—A page showing important details about your car and personal information, including VIN numbers, your address, and liability coverage. 

• • • Deductible—The amount an insurer requires you to pay on a claim before their coverage kicks in. Higher deductibles mean lower monthly payments, but more payout upfront in the event of an accident. 

• • • Effective Date—The specific day your insurance coverage begins.

• • • Exclusion—Situations that are not covered by your policy.

• • • Full Coverage Car Insurance—Liability insurance, comprehensive coverage, and collision damage within one policy.

• • • Gap Coverage—This pays the difference of what you have remaining on your vehicle in the event it is totaled or stolen — if the value remaining is high enough.

• • • Liability Insurance—Protects you by providing legal fee coverage and repair and medical fees for the other party in an accident. 

• • • Limit—The maximum payout your policy allows for a specific incident, which can vary based on the category. 

• • • Medical Payment Coverage—Pays for you and any passengers’ injuries no matter who is to blame for the accident.

• • • Personal Injury Protection—PIP functions like Medpay above but covers a few additional aspects such as physical therapy or income losses. 

• • • Premium—This is the actual cost of your insurance plan based on your payment plan.

• • • SR-22 Insurance Form—A form that is often required to show that you have proper car insurance in the event that you have received a DUI or another serious traffic-related incident. 

• • • State-Required Minimum—The lowest amount of auto insurance that a state requires you to have.

• • • Underwriting—A combination of all the elements such as your age, automobile, accident history, and other considerations that the insurance company uses in order to determine what your premium will be for a policy.

• • • Uninsured Motorist Bodily Injury—In the event that you are involved in an accident with a motorist who is uninsured or has insufficient coverage, this will provide protection for your medical needs.

• • • Uninsured Motorist Property Damage—This is another type of uninsured protection, only it covers damage repair rather than medical situations. 

What to Do When an Auto Insurance Company Denies a Claim

• • • • Read the fine print on your policy.

• • • • Ask your agent about the procedure for appealing, and discuss the company’s reasoning. Take careful notes about everything they say so you will have documentation.

• • • • Hold on to any checks you receive if the claim doesn’t seem right. Don’t cash them.

• • • • If you believe your insurer is treating you improperly, you can file a complaint with the insurance commissioner for your state.

• • • • If nothing else is working and you feel you are in the right, hire a lawyer. They will know all about the legalities, and if there has been a transgression, it is the lawyer’s job to find it.

Quotes For Special Circumstances

Here is some extra information that can help in a few unusual situations:

Unemployed Car Insurance Quotes

When in the unfortunate situation of having lost your job, your car insurance shouldn’t be directly affected unless you are unable to make payments and become a risk. There are a few ways to mitigate the damage of unemployment, though. 

Compare rates from different companies. You may be able to find a better deal that will help you to sustain your payments uninterrupted until you are back on your feet. 

Also, look for discount programs for situations such as being a safe driver, usage-based discounts, and even some for taking defensive driving courses. Investigate to see if there are any that can help you. 

Impounded Car Insurance Quote

If your vehicle is impounded, it will need to be insured before it can be released. Check your current policy if you have one; it may actually cover this very situation.

If you do not have insurance on the car, you will find it difficult (but not impossible) to acquire insurance on an impounded car. Shop around for companies who will provide a policy and compare prices. Just be aware, it will probably be more expensive than a standard policy.

Hired and Non-Owned Additional Insured

If you use rented cars or those belonging to others frequently, you may want to consider this type of insurance. While it won’t cover damage to the vehicle itself, it will protect you from liability and cover any court costs and settlement fees, for instance. 

Author Shaan Powar

About the author: Shaan is a content writer who enjoys creative writing and her career in the marketing field. Shaan also has an educational background in Marketing Management.