Your auto insurance policy is not only a good thing to have to protect your financial well-being, it’s also the law here in Wisconsin. Understanding the terminology used in you policy can help you better understand it, and help you be sure that you have the best policy for your needs. The following are some of the terms commonly used with auto insurance.
- Bodily injury liability: This covers expenses if you injure someone else in an accident. Commonly covered expenses are medical bills or lost wages.
- Comprehensive coverage: If your car is damaged through some event other than an accident (such as vandalism), your comprehensive coverage kicks in.
- Gap insurance: This coverage, for the lease or rental of cars, covers the difference between what you owe and the actual value of the vehicle if the car is damaged.
- Liability insurance: If you’re found at fault for an accident, liability coverage pays for the damage and injuries to other people. It will also cover your legal fees if the case goes to court.
- Personal property liability: This category of coverage pays only for damage to property.
- Personal Injury Protection (PIP): Also sometimes called medical payments coverage, PIP pays for expenses if you or your passenger is injured during an accident.
- Binder: When you get a new insurance policy, the binder provides temporary proof of insurance till you get all your official documents.
- Declarations page: This page is a summary of all the coverage you have. If you have questions about your policy, it’s useful to show your insurance agent your declarations page.
- Deductible: Your deductible is the amount of money you’ll be responsible for paying if you’re in an accident. Deductibles may vary for different kinds of coverage.
- Exclusion: Your policy may have certain exclusions, that is, items that aren’t covered by your policy.
- Limits: The limit is the maximum amount your insurance company will pay for a specific claim. Limits may differ for different coverage, just like deductibles.
- Premium: The premium is how much you pay for your policy. It is affected by a wide variety of factors including age, location, and driving history.
- Rental reimbursement: If you need to rent a car while your car is being repaired or replaced, your insurance company may reimburse you for the cost of the rental fee.
If you have questions about your auto insurance policy, or any type of insurance for that matter, be sure to give us a call or stop in, we’d be glad to answer any of your questions.