Car Insurance: 10 Terms to Know

Refresh your auto insurance know-how with these ten terms.

• Liability coverage – if you’re involved in a car accident and found at-fault, auto liability coverage can help pay for someone else’s bodily injuries and property damage. 
• Comprehensive coverage – if you’re involved in a car accident not caused by a collision, auto comprehensive coverage can pay to repair or replace your vehicle. For example, losses from vandalism, theft, or inclement weather would typically be covered. 
• Collision coverage – if you’re involved in a car accident and collide with an object such as another vehicle or a guardrail, auto collision coverage can pay to repair or replace your vehicle. 
• Deductible – an auto insurance deductible is the amount of money you pay out of pocket toward a covered claim.
• Full coverage auto insurance – the term “full coverage auto insurance” isn’t a particular policy, but instead refers to a combination of coverages that protect you from a wide range of incidents. Full coverage auto insurance typically includes liability, collision, and comprehensive coverage, plus any other state-mandated coverages.
• Personal Injury Protection (PIP) – PIP coverage can help pay medical bills and lost wages when you or your passengers are injured in a car accident, regardless of who is at fault. Depending on state law, PIP can be required or optional. 
• Declarations page – a car insurance declarations page is a summary of your car insurance policy. It is typically the first page of your policy.
• Medical payments coverage (MedPay) – MedPay coverage can help pay medical expenses when you or your passengers are injured in a car accident, regardless of who is at fault. MedPay is an optional coverage in most states.
• Uninsured/underinsured motorist coverage – if you’re involved in a car accident with an at-fault driver who doesn’t have enough, or any, auto liability coverage, uninsured/underinsured motorist coverage can help pay your medical expenses and the cost of vehicle repairs/replacement.

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