If you are new to auto insurance, then you would be finding many terms being used in this sector of the insurance industry. If you have not been able to comprehend their true meaning, then you must read on and find out what they mean.
- Deductibles- The deductibles means the out of pocket expenses that have to be paid from you in case of any damages. In general, the average cost of the deductibles would be $500. However, in case you increase the deductibles to $1000, then you would be in a better situation. This would lower down your insurance payments and would also provide better damages payment in case of a major accident.
- Discounts- this is quite a simple term. It is the amount or percentage of an amount that certain sections of the consumers pay lesser than the others dues to special privileges.
- Liability Insurance- this is the most basic type of auto insurance and it is generally mandatory in all the states in order to be driving a car legally. A liability insurance covers the cost of the damages occurred to life and property in case of an accident where you were at fault. Therefore, it is called ‘liability’ as it shows the amount that you are liable to pay to the others involved in the accident. Most people with expensive vehicles forego this kind of an insurance and buy a comprehensive coverage instead. You must check with the state rules for the same.
- Driving record- your driving record is a small chronology of how you have been driving in the past. If you have been charged of any kind of a traffic ticket, then you would be paying a higher insurance. In case you have been involved in an accident where it was your fault, then you can definitely expect a raise in the cost of auto insurance. The insurance companies would check if you have been charged of any driving mistakes in the preceding three years.
- Collision insurance- this kind of an insurance would be paying off the damages and repair costs for a vehicle that has been involved in an accident. It would either make you repair the car to its original condition or help you buy a car with a similar value and condition.
- Comprehensive insurance- this kind of an insurance is bought by those who have very expensive and valuable cars. It helps them protect their car against theft, vandalism, natural disasters, public disturbances and much more.