Car insurance is something that everyone needs if they’re going to get behind the wheel, but somehow there are a lot of vocab words that they don’t teach you in school. When it comes to decoding Alabama car insurance, you might feel like you need a cheat sheet. Well, we decided to make one. Here are ten car insurance terms to keep up your sleeve – and wow your agent with when you toss them around casually.
Car insurance vocabulary words
Fault is a way to describe how much responsibility someone has for an accident. If you are at-fault, that means you caused the accident. Figuring out who is at-fault is important where insurance is concerned because it can make a big difference when it comes to which driver’s insurance company is going to pay out for the claim.
A covered loss is a type of damage that your insurance company will pay for. The damage could be to your car, to someone else, or to someone else’s car or property. When you read through your policy, be sure to pay extra attention to what losses are covered losses (it will outline what is and isn’t covered.) What losses will be covered can depend on what types of coverage you purchase for your car.
The declarations page (a.k.a. dec page) of your policy gives a helpful little overview of your insurance policy. It gives a shortened, abbreviated version of the coverage you have for the vehicles on your policy.
It may include:
- Which coverages you chose
- How much insurance you purchased for each coverage (the limits of insurance)
- The price of each coverage
- The cars covered and the coverages on each car
If you just have a quick question about your policy or you want to refresh your memory, you can read through the dec page and see if it answers your question.
The deductible is the amount of money you’ve agreed to pay if you have a claim. When a loss happens, you have your portion of the expenses and the insurance company has theirs. You’re responsible for paying for your part.
To illustrate, let’s say that you have a $1,000 deductible for your collision insurance. You’re in an at-fault (see, you’re using those terms already) accident and your car has $4,000 worth of damage. You cough up $1,000 and the insurance company pays $3,000.
Limit of coverage:
It’s really important to pay attention to this when you’re getting insurance. The amount of insurance that you purchase is called the limit of coverage. It’s the maximum amount that your insurance will pay out for specific coverages. Every state has its own requirements for the minimum amount of car insurance a driver has to carry to be able to legally drive on the roads. However, the state minimum of insurance might not be enough to fully protect you if you’re in a serious accident. The other driver could decide to sue you. Anyways, what we’re trying to say is make sure you have high enough limits of car insurance to truly protect yourself financially in the event of an accident.
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An MVR, or Motor Vehicle Report, is a record of your driving history (it usually goes back a few years.) It’s held by the state. Things like traffic violations, suspensions of your license, the status of your license, and accidents can appear on your MVR. Why is this important? Because insurance companies often use MVRs when they’re determining car insurance rates. The MVR gives them an idea of how “risky” a particular driver is to insure and how likely they are to have an accident. That’s why safe drivers with clean MVRs are likely to get lower car insurance rates.
The named insured is simply the main person the policy covers. That’s all.
Primary use designates how you’re using your vehicle. You might use your car mostly to commute to work. You might use it just to run errands and drive around town (in other words, for pleasure.) You might use your car for business (in which case you would need to talk to your agent to make sure you have the proper coverage.) Or maybe you use your vehicle on a farm. Whatever it might be, the primary use is what the car is mostly used for.
Your car insurance premium is probably of great interest to you. That’s because it’s the amount of money you pay for your auto insurance.
Many different factors affect your car insurance rates. These factors include:
- Your location
- Your car (Year, make, model)
- How old you are
- The purpose of the vehicle
- Your driving record
- Your coverages (for example, collision and comprehensive)
- The deductibles you select
- Your credit score
Because car insurance rates depend on so many different things, the best way to get an accurate idea of how much your premium will be is to get car insurance quotes. It’s important to get multiple quotes so you can compare coverages and pricing. (Though you have to make sure to compare apples to apples.) If you’d like some help getting Alabama car insurance quotes, you can fill out our online quote form or give us a call today.
This is the person who drives the insured vehicle most frequently. Who’s most likely to be in the driver’s seat at any given time?
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Car insurance might seem a little complicated and there might be a lot of fancy words, but hopefully, these quick definitions give you an idea of the basics of auto insurance. And hopefully they help you feel a little more confident as you begin your quest for car insurance – or your quest to understand what on earth your policy is saying.
If you need Alabama car insurance quotes, we’d be happy to help. We’ll help you get quotes and we’ll go over your options with you so that you can choose the car insurance policy that’s right for you. We believe in making insurance easy and helping people save money on car insurance. All you have to do to get in touch is fill out our online quote form or give us a call today.