It doesn't matter whether your auto insurance provider claims to speak English or not, you're going to know the minute you take a look at your insurance policy that the two of you are speaking a totally different language! Insurance-ese, with the occasional smattering of legal-ese, is a language all its own. Before you sign on the dotted line for your insurance policy, take a step back and make sure you know exactly what they're talking about!
The Auto Insurance Terminology You Need to Know Before You Say Yes:
1. At Fault-Believe it or not, this one isn't quite as simple as it sounds. There are two variations on "At Fault" in the auto insurance dictionary. The person considered to be "at fault" in an accident is the one who caused it in the first place, and "at fault" insurance (as opposed to no-fault insurance) means that the person who was "at fault" is going to be paying all of the bills.
2. Bodily Injury Liability-This is the part of your insurance coverage that makes sure you're not stuck with emergency room bills, ICU bills, outpatient bills and rehabilitative therapy expenses for someone else after you take a slide on a slick city street in the middle of winter and run head first into their vehicle.
3. Comprehensive Coverage-Regardless of what your personal religious beliefs happen to be, there's no denying that "Acts of God" can do horrible things to your vehicle. When Mother Nature is the only one to blame for the damages to your car, your comprehensive auto insurance coverage will step in and pick up the bill.
4. Collision Coverage-Your liability insurance might pick up the tab for the other person's repairs after you've been in an accident, but it's not going to do anything about yours. That's why you need to make sure you're carrying collision coverage. Collision will get you back on the road after you've been in an accident or total your car and cut you a check so you're not left for weeks without wheels trying to come up with the money to make it happen.
5. Continuously Insured-This is one of those auto insurance terms you really have to look out for, because your insurer's definition of continuously insured and yours may be a lot different. Most of us don't think much of it if we're late with a payment and our coverage lapses a few days, but your insurance company isn't going to be impressed. Continuously insured means continuously insured-no excepetions.
6. Deductible-This is what you owe them each time you file an auto insurance claim for the privilege of having them pick up the tab. Think of it as the five bucks you chip in toward dinner, only instead of single digits it hits double or triple.
7. Garaging Location-Where you park your car. The phrasing on this is a little misleading-it doesn't matter whether you have a garage or not.
8. Limit-The maximum amount your insurer is going to pay out for your auto insurance claims. This will usually be separated on a "per person" and "per incident" basis.
9. No Fault-With no fault car insurance it doesn't matter whodunit. Your auto insurance is going to take care of you, and theirs is going to take care of them. (But only the driver actually at fault is going to watch their insurance rates go up.)
10. Premium-The amount of money you pay your insurer each month for the privilege of being insured.
11. Primary Use-What you use your car for MOST of the time. No, they're not being nosy. They're just checking to make sure you're not a traveling salesman who spends forty hours a week on the road. (Relative risk and all that-business use usually requires a commercial policy.)
12. Uninsured/Underinsured Motorist Coverage-Not everyone has the good sense to stay continuously covered by an auto insurance policy. If you have the bad luck to run into one of these drivers on the road you could spend years in court trying to get the money for your repairs. Uninsured motorist coverage saves you the trouble-your insurance company picks up the tab. You can figure the rest out later.
