Here are standard terms that you may encounter during your search for cheap car insurance. Purchasing car insurance can be confusing if you don’t understand the terminology and what each type of policy offers. A quick read through this list will provide you with relevant knowledge to help you make the best decisions.
Minimum Insurance Requirements
Every state in the USA will have their own minimum insurance requirements. If your insurance policy does not meet these requirements then it will not be legal for you to drive on the road. This type of insurance is known as ‘liability insurance’ as it dictates the amount that the insurer will be liable for in each type of accident. It is always suggested that you purchase insurance higher than the minimum requirements to reduce the amount of personal financial liability that you will have for an accident. Your insurer should be able to advise you on the best route to take.
This is a guarantee to replace or repair your car in the event of an accident. Don’t forget however you will only receive current market value for the car, which is why many people that own lease cars also opt for ‘Gap Cover’.
This cover will protect you against Fire, Theft and any other damage cause to your car which isn’t the direct result of an accident. Despite this being optional coverage many people opt to purchase it due to the amount of benefits it can provide them.
When looking into Comprehensive or Collision Coverage you will come this term. It basically means the amount of contribution you will have to make before either of these types of two covers kick in. For example, if you have a deductable of $500 and your car is stolen then you will need to pay the first $500 towards replacement costs of the car.
Many people sign up to this without knowing exactly what they are getting themselves into. This cover will allow simple repairs to be carried out at the road side, for example a flat tire or a battery problem. If you are unable to be repaired at the roadside then your insurer will make sure you get taken to the nearest garage. Don’t forget however that you will not be covered on your insurance for any repairs that your garage may need to carry out.
Actual Cash Value
This would be the value of the car before an accident. You will never be offered the full price to purchase a new car. The value of a car will start to depreciate as soon as it leaves the garage. You will only be awarded contributions towards a new one.
The terms listed above will be the most common things you encounter when looking to purchase car insurance, and with a little bit of know how the application process will seem that much simpler.