Explaining Auto Insurance Language Terms

By Author: Alisdair Cosgrove
Total Articles: 184
Comment this article

When an ordinary person tries to understand the language included in their auto insurance policy, it can be an almost impossible task to perform. Some of the words used in a conversation involving insurance or the insurance industry are not normally used in our everyday language. It can seem as though someone is speaking to you in a foreign language, if you do not have an understanding of those words, but it is necessary for you to learn some of the jargon that is used, because insurance is a big part of your life.

Without insurance, you do not have any type of protection in case you are in a car accident. If you are involved in an accident that was your fault, and you do not have auto insurance, you may be sued for any damages sustained in the accident.

Even if the accident wasn't your fault, you still have to worry about your medical bills, replacing your car and the medical expenses of anyone in the car with you.

It can easily be seen why insurance is a necessity and why the majority of them stipulate that people have a minimum amount of auto insurance.

When speaking about car insurance, ...
... there is a real need to know only five basic terms. These basic insurance terms list as: Physical damage coverage, Liability coverage, Medical Coverage, Emergency assistance coverage, and coverage for Unattached equipment.

Most of the terms are familiar to all of us, but there are a couple of them that will not be readily recognized. We frequently hear the terms liability coverage, physical damage coverage, and medical coverage when talking about car insurance and reading our policies.

There is not a lot that is said about emergency assistance coverage and unattached equipment coverage. These add-on types of auto insurance coverage are of less importance than the other aspects of your insurance coverage, but they are worthy of notice.

The most common insurance term you will hear about is liability coverage. The part of your insurance policy that covers damages caused by you in an accident, is your liability coverage.

In order to avoid paying an out of pocket expense to the person who is a victim in the crash, it is necessary for you to have enough in your policy's liability coverage to cover their damages.

Medical coverage pays medical expenses you and any passengers within your vehicle may incur as a result of a crash.

The physical damage coverage on your auto insurance policy helps to repair or replace your vehicle if the need arises due to an accident of some kind.

Emergency assistance coverage, one of the insurance terms that is a bit different, is a sort of roadside assistance. When this type of coverage is added to your auto insurance plan, you will have the assurance of being provided with a tow in case you get stranded in strange surroundings on an unfamiliar road.

The unattached
equipment coverage will provide coverage for equipment which is not permanently attached to your vehicle. Things like satellite radio systems are what may be included in this. If there are expensive attachments on your car, you have to make sure they are covered by the insurance, so you will not need to pay for having them repaired or replaced.

This important and confusing language one reads and hears is best understood after first learning these important insurance terms. Not understanding them leads to not understanding what type of home and car insurance you have or how it works. Knowing how it works, helps you determine if what you have is adequate enough for your particular needs.
Alisdair Cosgrove loves to write about finance issues and advise on how people can save money on their personal finance outgoings and can find more of his work at the insurance site Peppercoin, offering cheap auto insurance and also life insurance. Visit today to read more of Alisdair's great insurance articles.