Basic Car Insurance Terms

If we seek to learn more about car insurance, it is important for us to understand basic terms. There are a few terms that we need to understand:

  • Car insurance: It is a specific type of insurance that protects and covers against losses involving cars. Car insurance policies could have different kinds of coverage. It may also liability insurance that protect against bodily injury and property damage.
  • Accidents: It is an unexpected event that could cause damages on our cars or injuries to our body. This situation could happen due to our fault or others’ fault. In general, collision is defined as an impact between two different cars.
  • Report form: Police officers file accident report form and it is often called police report. It is an important document in car insurance process and it should provide details about the collision, such as the name of the people involved, property damaged, models and make of cars involved, deaths, injuries, time of the accident and other details.
  • Adjuster: Adjuster is the name of the people who observes the accident and evaluate the monetary value of the loss after the accident occurs. The person has a significant role in determine how much money will be given to car owners or whether the money will be given at all.
  • Agent: Trained and licensed people who receive the authorization to sell the car insurance policies. These people are directly authorized by car insurance companies.
  • At fault: This is an extent at how much someone has contributed to the car accidents. In some cases, the collision could be caused by specific individuals. This determines whether the insurance company should or should not pay the claim.
  • Insurance score: It is generally similar to credit record, but it indicates whether someone is worthy of getting an insurance policy. These scores should help us to determine prices of our car insurance policy. Negatives marks on our credit report could result in higher premiums or even refusals. It should be noted that the way insurance score is calculated could vary from state to state.
  • Binder: Binder is generally a short term and temporary policy agreement that’s implemented while the permanent, formal policy is being put into place.
  • Bodily injury liability: It is a type of insurance policy component that covers the expenses related to our injury. This may include medical expenses and lost wages.
  • Brokers: Brokers are licensed people who work on providers’ behalf to service and sell car insurance policies.
  • Claims: Claims are formal notices made by consumers to insurance providers that a loss already occurs. The claim is covered under specific terms of car insurance policy.
  • Claim adjusters: Claim adjusters are employed by insurance agencies to settle and investigate losses and claims. They are essentially representatives of insurance agencies to verify that claims are compensated correctly and fairly.
  • Commission: The amount of money that car insurance providers give to agents for their effort to sell and service the car insurance policy.