“Insurance-ese” for Cars, Trucks & SUVs
Insurance is one of the hardest subjects to understand. Just like the medical industry has “Medical-ese” and the legal industry has “Legalese”, the insurance industry has “Insurance-ese”. It’s a combination of “Legalese” and insurance jargon. You’ll know what I’m talking about if you’ve ever read your insurance policy. “Comprehensive” in everyday language is something that is understandable. Not in the insurance world: “Comprehensive” is the name of the coverage and it’s not very understandable. So, a quick course in “Insurance-ese” definitions….
Liability Coverage
You may have heard, from your insurance agent, this is the most important coverage you can have. Did you realize that your Liability Coverage will not pay you? So, why is it so important? We’ve all come close to hitting another car at some point in our driving lives. This time, what if the brakes didn’t grab quite fast enough and you hit the other car? It was just a mistake, but, it’s your fault. In the other car, they had a young baby. Even though she doesn’t appear hurt, the paramedics want her checked thoroughly at the hospital, because of her age. Big brother has an arm that might be broken. Mom hit her head on the side and needs to be checked for concussion. Dad wasn’t hurt but the car has a side panel crunched into a tire. Not huge damage, but the car isn’t drivable.
Bills include:
The total bill is over $13,000 and that’s a minor accident! Guess who is expected to pay that bill? You, of course. I don’t know about you but that bill scares me! It’s so easy for it to get worse fast. What if this car got pushed into another car? Now you are responsible for two cars with all the people in them. Your liability coverage pays that $13,000-plus bill. Liability was designed to protect us from our mistakes, as much as possible.
Uninsured Motorist Coverage
This coverage is for “that” kid! You know, the one in his late teens or early 20s, who drives around your neighborhood like a maniac. He makes you afraid for your cars and your health. One day he comes around that corner way too fast and the next thing you know, he plows straight into your car. He’s not hurt, but your car looks like an accordion. Definitely totaled! He doesn’t have insurance. He doesn’t even have a job. He’s old enough that his parents aren’t responsible for him anymore. How are you going to get paid? You could try suing him, but that won’t get you a car anytime soon.
Uninsured Motorist Property Damage pays to fix your car. If you happen to be in the car when he hit, Uninsured Motorist would pay your medical bills. Uninsured motorists come in all ages, genders and nationalities, but the one thing they have in common is financial difficulty. That’s what makes it hard to get your bills paid by them. Uninsured Motorist Coverage protects us from them. Don’t think they’re getting away with anything, however, because most states take a very dim view of driving without insurance. They will go after the uninsured driver.
Collision Coverage
Collision Coverage is fairly easy to understand. It covers exactly what it says: collisions. It will pay to fix your car if you run into another car, your neighbor’s mailbox or your own fence post.
Collision Coverage comes with the deductible. The deductible is the amount you pay before the insurance pays. Let’s say, for example, that your deductible is $500. So if your damage is $3000, you pay your $500 deductible and then the Collision Coverage pays the remaining $2500. Most collision deductibles do not allow you to go below $500, but you can choose $1000 or more. Just remember, you have to pay that deductible first. There is one thing you can hit that would not repair your car with Collision Coverage. That is an animal. We’ll cover that under Comprehensive Coverage.
Comprehensive Coverage
Hitting an animal is the one thing that is a collision but is not covered under Collision Coverage. Hitting an animal is considered the animal’s fault, and is covered under your Comprehensive Coverage. Comprehensive Coverage also pays for your car if it is damaged from fire, theft, vandalism, falling objects, and glass damage.
Examples:
These are all examples of things that are not considered your fault and are covered under Comprehensive Coverage. Deductibles vary widely from insurance company to insurance company, some offering deductibles as low as $0. Some have two deductibles: one for glass damage and another higher deductible for everything else. Bear in mind that although comprehensive claims are considered not your fault, some insurance companies count how many you’ve had and it can affect how they deal with you.
Now you know the basics for the most common car insurance coverages. Feel free to refer back to this page any time you need a refresher course in “Insurance-ese”.
Disclaimer: These are very general and basic descriptions of insurance coverage. Qualifications, exceptions and state laws may affect these coverages. All insurance coverages are subject to the terms, conditions and limitations of the actual policy. To understand specifics for your state and your insurance company, please read your policy or speak to your insurance professional.
Insurance is one of the hardest subjects to understand. Just like the medical industry has “Medical-ese” and the legal industry has “Legalese”, the insurance industry has “Insurance-ese”. It’s a combination of “Legalese” and insurance jargon. You’ll know what I’m talking about if you’ve ever read your insurance policy. “Comprehensive” in everyday language is something that is understandable. Not in the insurance world: “Comprehensive” is the name of the coverage and it’s not very understandable. So, a quick course in “Insurance-ese” definitions….
Liability Coverage
You may have heard, from your insurance agent, this is the most important coverage you can have. Did you realize that your Liability Coverage will not pay you? So, why is it so important? We’ve all come close to hitting another car at some point in our driving lives. This time, what if the brakes didn’t grab quite fast enough and you hit the other car? It was just a mistake, but, it’s your fault. In the other car, they had a young baby. Even though she doesn’t appear hurt, the paramedics want her checked thoroughly at the hospital, because of her age. Big brother has an arm that might be broken. Mom hit her head on the side and needs to be checked for concussion. Dad wasn’t hurt but the car has a side panel crunched into a tire. Not huge damage, but the car isn’t drivable.
Bills include:
- ER visits for three
- An MRI for mom
- Hospital overnights for mom and baby sister
- X-ray and casting for brother
- Car towing
- Repairs for the car
- Rental car while the car is in the shop
The total bill is over $13,000 and that’s a minor accident! Guess who is expected to pay that bill? You, of course. I don’t know about you but that bill scares me! It’s so easy for it to get worse fast. What if this car got pushed into another car? Now you are responsible for two cars with all the people in them. Your liability coverage pays that $13,000-plus bill. Liability was designed to protect us from our mistakes, as much as possible.
Uninsured Motorist Coverage
This coverage is for “that” kid! You know, the one in his late teens or early 20s, who drives around your neighborhood like a maniac. He makes you afraid for your cars and your health. One day he comes around that corner way too fast and the next thing you know, he plows straight into your car. He’s not hurt, but your car looks like an accordion. Definitely totaled! He doesn’t have insurance. He doesn’t even have a job. He’s old enough that his parents aren’t responsible for him anymore. How are you going to get paid? You could try suing him, but that won’t get you a car anytime soon.
Uninsured Motorist Property Damage pays to fix your car. If you happen to be in the car when he hit, Uninsured Motorist would pay your medical bills. Uninsured motorists come in all ages, genders and nationalities, but the one thing they have in common is financial difficulty. That’s what makes it hard to get your bills paid by them. Uninsured Motorist Coverage protects us from them. Don’t think they’re getting away with anything, however, because most states take a very dim view of driving without insurance. They will go after the uninsured driver.
Collision Coverage
Collision Coverage is fairly easy to understand. It covers exactly what it says: collisions. It will pay to fix your car if you run into another car, your neighbor’s mailbox or your own fence post.
Collision Coverage comes with the deductible. The deductible is the amount you pay before the insurance pays. Let’s say, for example, that your deductible is $500. So if your damage is $3000, you pay your $500 deductible and then the Collision Coverage pays the remaining $2500. Most collision deductibles do not allow you to go below $500, but you can choose $1000 or more. Just remember, you have to pay that deductible first. There is one thing you can hit that would not repair your car with Collision Coverage. That is an animal. We’ll cover that under Comprehensive Coverage.
Comprehensive Coverage
Hitting an animal is the one thing that is a collision but is not covered under Collision Coverage. Hitting an animal is considered the animal’s fault, and is covered under your Comprehensive Coverage. Comprehensive Coverage also pays for your car if it is damaged from fire, theft, vandalism, falling objects, and glass damage.
Examples:
- You hit a turkey, deer, moose or cow.
- Your car is caught in a fire.
- Your car is stolen.
- Your car gets keyed or spray painted.
- A load of hay bales falls on your car. (That actually happened.)
- You get a crack across the windshield.
These are all examples of things that are not considered your fault and are covered under Comprehensive Coverage. Deductibles vary widely from insurance company to insurance company, some offering deductibles as low as $0. Some have two deductibles: one for glass damage and another higher deductible for everything else. Bear in mind that although comprehensive claims are considered not your fault, some insurance companies count how many you’ve had and it can affect how they deal with you.
Now you know the basics for the most common car insurance coverages. Feel free to refer back to this page any time you need a refresher course in “Insurance-ese”.
Disclaimer: These are very general and basic descriptions of insurance coverage. Qualifications, exceptions and state laws may affect these coverages. All insurance coverages are subject to the terms, conditions and limitations of the actual policy. To understand specifics for your state and your insurance company, please read your policy or speak to your insurance professional.