An Auto Insurance Glossary
If you’re just getting your first car, or if you want to reread your policy and make sure you’re getting a good deal, you may find a whole bunch of auto insurance lingo that you’re not really familiar with. Some of it will sound vaguely familiar; that’s because you hear them in a car insurance commercial on television ever five seconds!
To know how to navigate and fully understand your existing policy, or to arm yourself with the requisite information when settling on the terms for a new policy, you should be prepared with knowledge of some of the more common, yet not-always-understood words used in the foreign language we call “insurance speak”.
Adjuster refers to the person who will investigate and then settle auto insurance claims made by the insurance company’s customers.
An auto insurance agent and a broker both sell, advise, and manage insurance policies to their customers. The difference between the two is that, an agent is usually contracted to a single insurance company, and is considered an authorized representative, whereas a broker is a representative of the customer.
In Car Insurance, the Benefit refers to the amount that the insurance company pays to either you, or your beneficiary, when you file an auto insurance claim, and it is deemed valid.
Bodily Injury Liability Coverage. If you are deemed responsible in an accident wherein somebody is injured, BI coverage will pay that person’s medical expenses. In some cases, this may cover other things such as lost wages or court costs.
Comprehensive coverage is coverage which extends to such damages as fire, natural disasters, falling objects, vandalism, and theft. The maximum amount you can insure your car for is the car’s actual cash value, and then the deductible is subtracted from this amount.
Deductible refers to the amount of damages you will agree to pay for in the event that you file an auto insurance claim that is deemed valid. Not all insurance coverage options will require a deductible.
Indemnity refers to a pre-determined benefit that will be paid for a loss that is covered under your policy.
The NCF will provide objective, unbiased information regarding the financial record of any individual. This generally looks into things like credit, and is used to calculate insurance scores.
Property Damage Liability Coverage. This refers to the amount that your insurer is willing to cover you for in the event that you are deemed at fault in an accident which damages somebody else’s property.
No, it’s not a type of pastry. Tort refers to instances wherein one party is deemed legally responsible for damaging another party’s property, or injuring somebody.