10 Terms you must know about Car Insurance

Comprehensive Coverage

A comprehensive car insurance coverage protects the insured vehicle against both its own and third-party harm. It covers the policyholder for losses caused by events such as traffic accidents, natural disasters, man-made calamities, theft, fire, and so on, as well as third-party obligations. If you want more automobile coverage, a comprehensive car policy may be the best option for you.

Third-party Liability coverage

Third-party liability coverage is required for all car owners to lawfully drive on roads. This four-wheeler insurance coverage financially protects against third-party liability stemming from a traffic accident involving the covered vehicle. A third-party liability policy covers the death and harm of a third party indefinitely.

Car insurance premium

A premium is the fixed amount you must pay when acquiring a car insurance policy. In other terms, it is the cost of car insurance coverage that protects your vehicle from unplanned accidents while driving.

Deductibles

In the case of car insurance, the deductible is a portion of the claim amount that you will pay out of pocket during claim settlement. The insurance company pays the remaining claim amount. A mandatory deductible is a deductible that you will be compelled to pay if a claim is filed. The amount of mandatory deductibles is determined by the cubic size of a car’s engine. A voluntary deductible, on the other hand, is the portion of the claim amount that you voluntarily agree to pay at the time of claim settlement. You may also avoid paying optional deductibles by selecting zero voluntary deductibles when purchasing a car coverage. However, choosing a greater optional deductible will lower your car insurance cost.

Personal injury protection (PIP)

Personal injury protection is a legally required insurance policy issued by an insurance provider to financially protect the owner/driver of the insured vehicle. It covers the owner/driver in the event of an accident, incapacity, or death. It is only required for the owner/driver. However, it can be purchased as an add-on cover for other passengers by paying an additional cost.

Medical payments insurance

Medical payments insurance is comparable to personal injury protection but far less extensive. It pays for some medical bills but not lost earnings and may not give a death benefit. It has no deductible, unlike other coverages.

Add-on covers

Add-on covers are extra coverage options that you may purchase to supplement your four-wheeler insurance policy. The same insurance provider can provide an add-on cover by charging an additional charge on top of your existing four-wheeler insurance payment. Only with a comprehensive or own damages policy can you obtain an add-on cover to supplement their coverage.

Full coverage

Full coverage is not a specific sort of policy; rather, it is a broad word for automobile insurance that is intended to offer comprehensive protection for property damage and bodily harm. Different insurance companies may have different opinions about what constitutes comprehensive coverage.

Uninsured/underinsured motorist coverage

Uninsured/underinsured motorist bodily injury coverage covers bodily injury or death expenditures for you or your passengers if you are hit by a vehicle that does not have insurance or has insufficient insurance to cover the accident’s losses. It also protects you if you are hit by an unidentified hit-and-run motorist.

Actual Cash Value (ACV)

The fair market value of your automobile is its actual cash value. It’s what you’d get if you sold your automobile to a private bidder. And it’s what insurance would use to determine your payment if your car is stolen or totalled. It differs from replacement cost, which is the expense of replacing your old automobile with a new one.