Insurance Tips

Basic Car Insurance Terms Defined

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Basic Car Insurance Terms Defined

Basically, there are six different parts of an insurance policy. Some of them are mandatory when you purchase car insurance, and some may be optional. Here is a brief definition of the different types of policies that are offered by most insurance companies.

Basically, there are six different parts of an insurance policy. Some of them are mandatory when you purchase car insurance, and some may be optional. Here is a brief definition of the different types of policies that are offered by most insurance companies.

 


Collision Insurance

This is the part that allows your car to be paid for when you get in an accident. If you were to hit another vehicle, have another vehicle hit your car, or you hit another object (such as a tree), then the damage to your vehicle is covered.

There are some exceptions, such as stunts and racing, which will void your being covered during those events.

 

Comprehensive Insurance

This coverage will protect your car in those events that are not listed under Collision Insurance.

This means that if your car were caught in a fire, flood, is vandalized, stolen, or damaged by falling objects, then it would be covered. For older cars, you probably should just drop this part of your policy.

 

Medical Payments


This part of your policy provides medical coverage for any bodily injuries to you or your passengers while you are driving. It also covers people who drive your car with your permission, or you and passengers when you are driving someone else's car.

Funerals are covered, too, in the event of any deaths that may occur. It may also be called Personal Injury Protection in some countries.

 

Bodily Injury Liability

Whenever you get sued because of a bodily injury or a death, then this part of the policy covers you. There are a number of exceptions under this part of the policy as to who may not be covered and under what circumstances.

 

 

Property Damage Liability

Any property that becomes damaged as a result of your driving, or if your vehicle is driven by someone that you gave authorization to, it is covered under this part of the car insurance policy.

This part is usually written together with the Bodily Injury Liability.

 

Uninsured Motorist Coverage

This is for that other person who did not bother to buy car insurance. With more than 25% of motorists being uninsured in some countries, you definitely need this. It will also cover you in the event of a hit and run driver.

posted by Xplico Insurance Company Limited XIC LTD
09 Apr 2014
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