Sometimes, all of the terms and phrasing in car insurance policies can make your head spin. There can be tons of different names referring to the coverage you need, but how do you know what they mean? How do you know you’re getting the right auto insurance? Here are 10 basic Atlanta auto insurance terms to help you crack the car insurance code.
Auto insurance terms to know.
1. What does at-fault mean?
“At-fault” is basically who is responsible for an accident. It might give you someone to blame, but for your insurance company, it’s a way to determine which auto insurance carrier will pay who. If you’re at-fault, your insurance company will have to pay the other driver or their carrier. If the other driver is at-fault, their insurance company pays you or your carrier.
2. What is a covered loss?
A covered loss is an incident that your insurance can help you pay for, such as an accident or a tree falling on your car. This is a section you really want to pay attention to on your insurance policy because each type of car insurance policy doesn’t cover the same things. Plus, not every car insurance policy covers every type of damage to your car.
For instance, your auto insurance may cover the cost to repair your vehicle if you’re in an accident with another car. However, it may not pay for certain windshield repairs if it’s damaged by something other than a crash.
3. What is a declarations page?
The declarations page of your insurance is what gives you a basic run-down of what and how much your car insurance covers. It will usually include information like:
- The types of coverage you have
- The limits for each type of coverage
- The cost of each type of coverage
- Which vehicles are covered by your policy and how much coverage they have under your policy.
Your entire policy will go into more detail, but your declarations page can be a quick way to know what and how much your insurance actually covers in a sticky situation.
4. What is a deductible?
If you’ve ever had to file a car insurance claim, you’ve probably wondered why you have to pay anything out of pocket if you have insurance. Your deductible would be the reason why. Your car insurance deductible is the amount that you’ve agreed to pay out of pocket if you have a claim. (So it’s another one of the auto insurance terms on the list that has to do with money.)
For example, let’s say that your policy has a $500 deductible. If you hit a deer, and it causes $4,000 worth of damage, you would have to pay $500 out of pocket. Then your insurance would pay the rest of the repair amount, $3,500.
5. What is a coverage limit?
Your coverage limit is how much money total your insurance company is willing to pay out in a given plan year. Usually, each state has a required limit that your insurance has to cover. For Georgia, the easiest way to remember the coverage limit requirement is 25/50/25, which means you have to have at least:
- $25,000 in bodily liability coverage per person (what your insurance can pay out to another driver if you’re at-fault for an accident)
- $50,000 in total liability coverage per accident (the total amount that your insurance company can pay out to everyone in the other car in the accident)
- $25,000 in property damage coverage (the max amount that your insurance can pay to fix the other vehicle if you’re at fault in an accident)
Again, this is just the minimum coverage limit you’ll have to have to legally drive in GA. However, these limits may not be enough to fully cover someone else’s medical bills and car repair costs. So, it’s probably a better idea to get more than the minimum requirements for coverage.
6. What is an MVR?
MVR stands for Motor Vehicle Report. It’s the report that an insurance company looks at to determine how risky you are to insure and thus, what your rates should be for the year. The report is a record of your license status, traffic violations, license suspensions, and accidents.
7. Who is the named insured?
The named insured on an auto insurance policy is just who the main person who is covered on the policy.
8. What is primary use?
This is just another term for the main purpose you use your car for. Your insurance company is going to need to know this info so that they can insure you properly. Even if you use your car for personal and to travel/transport things for business, your carrier will need to know since insuring a car for that type of use is different than insuring a driver that only uses a vehicle to run errands.
9. What is a car insurance premium?
This is one of the auto insurance terms you’re probably most concerned about. Your premium is the monthly payment you make just to have the insurance policy. It doesn’t count toward your deductible and is determined by different factors, such as:
- Your driving history
- Where you live
- What kind of car you drive
- How old you are
- The primary use of the car
- The types of coverage and deductible you’ve chosen
- Your credit score
Different car insurance companies will usually determine your risk and rates in different ways. So, if you’re shocked by the sticker price of one insurance carrier, shop around for a quote. You may be pleasantly surprised. Also, be sure to ask your agent about any car insurance discounts you may qualify for. It can help you save on your monthly premium and give you room to get the auto insurance you truly need.
10. Who is the principal driver?
The principal driver is going to be the main person who’s driving the insured car, or who is using the car the most. Your insurance company may also ask about any secondary drivers, especially if you’re married, but the principal driver is usually the one that’s listed on the car title.
Now that you know some of the basic auto insurance terms, you’re ready to make informed decisions about which kind of coverage to choose. However, there are a lot more factors that go into finding the right auto insurance specific to your needs.
That’s why our agents are here. We’ll use our expertise to find you quotes on great coverage for the best possible rate. We specialize in breaking down the nitty gritty parts of car insurance that are too complex to cover here (including going into more detail about auto insurance terms.) That way you know why your quotes make sense for your unique situation. To make sure you’re not missing out on the best car insurance coverage you can get, give us a call today, fill out our online form, or live chat with an agent today!