Common Auto Insurance Terms
Insurance policies have their own language which can make them difficult to understand. So you will know what your insurance agent or customer service representative is talking about when you get car insurance in Van Nuys , here are some common auto insurance terms and their definitions.
Actual cash value: Current replacement cost minus depreciation.
Bodily Injury Liability: This gives payments to people who are physically injured and the injury is your fault.
Claim: The action of a policyholder asking the insurance company to pay for his or her losses.
Collision Coverage: Covers damage when your car collides with an object, like another vehicle or even a pothole.
Comprehensive coverage: Covers damage other than collision, like vandalism or hail.
Declarations page: A page in the policy that shows the amount and length of coverage, the premium amount and the property being insured.
Deductible: The out-of-pocket amount the policyholder has to pay before the insurance company pays.
Gap Insurance: This covers the amount that is left on the car loan after the insurance company pays the actual cash value.
Named driver policy: Coverage applies to the driver only if he or she is named on the policy.
Premium: The amount you pay for insurance coverage.
Property Damage Liability: This covers damage to someone’s property caused by your vehicle.
Rental reimbursement coverage: This pays for a rental car when your car is being repaired.
Third Party: With insurance, the policy holder is the first party, the insurance company is the second and anybody else is a third party.
Underwriter: This person decides whether or not the insurance company should approve your application and how much your premiums should be.
UM or UIM: These stand for uninsured motorist or under-insured motorist. Your company pays when the motorist at fault is not insured or does not have sufficient coverage to pay for all the damage.
VIN: The Vehicle Identification Number is found on the dash and can be seen through the windshield.