Auto Insurance Explained
What is "auto insurance"?
Auto or car insurance is a policy that you can purchase that applies to your vehicle. The insurance protects you from excessive cost or repair when the vehicle is in any sort of an accident or if the vehicle has been stolen. Car insurance is a necessary product in that it protects you from excessive costs and hassle if your car is in a big accident. Car insurance also protects you from liability, if you are hit by somebody who doesn't have insurance, your car insurance will protect you from shouldering the cost of getting your vehicle back to its original state.
What is "gap insurance"?
With regards to auto insurance, ‘gap insurance' is usually offered when somebody's going into a lease. The insurance gap is covering the gap between what the vehicle is worth and how much you owe in the lease. This is in the case of the vehicle being absolutely destroyed and won't be something that you'll be handing in at the end of that lease term.
What is a "deductible"?
With regards to auto insurance, a ‘deductible' is the part of the car insurance policy that you as the insured are responsible to pay. If there's a reason for the policy to be revoked, the deductible is the amount anywhere between $250 -$1000. It's your responsibility that all of the costs of getting your vehicle either replaced or back to original specification are then covered by the insurance company.
What is "VIN window etching" and how does it affect my premium?
With regards to auto insurance, VIN Number window etching is a service provided after the purchase of the vehicle by the dealer in most cases. The VIN number is etched into two or three secret locations on the windows of the vehicle. This is done so that if the vehicle is stolen and the VIN number plate is removed, the VIN number can still be identified by going to that secret location on the window. It's usually in a section of the vehicle where the window is below the surface of the metal so it can't be easily seen or altered. Therefore VIN number window etching is a counter-theft measure because it's providing an additional level of protection so that if the vehicle is stolen, it can easily be identified. This means VIN number window etching also reduces your overall insurance burden too.
What are "car insurance discounts"?
Car insurance discounts are discounts, or incentives, provided by the vehicle insurer that benefit you for maintaining certain levels of behavior. Multiple vehicles insured all at one location can reduce your costs, having a good driving record, or being a student. A few typical car insurance discounts you should ask your insurer about with regards to your policy would be a non-smoker discount, multiple car discount, or possibly a low-mileage discount. If your vehicle is only used for commuting a very short distance, based upon the lack of exposure it has to the roads, you might be able to negotiate a discount on that as well. And, some discounts are actually motivated by the insurer so you're looking at discounts for anti-locking brake systems, passive restraint systems, or airbag systems. And, then, of course, more obviously, anti-theft systems – if the insurer believes that the vehicle is going to be harder to steal, then, therefore, it is less of a risk and they can pass those savings on to you.
What is "collision" insurance?
With regards to auto insurance, collision insurance is the part of the insurance policy that covers the cost of repair to the vehicle in the event of a collision, above and beyond the original deductible that you, as the insured have to pay.
What is "comprehensive coverage" insurance?
With regards to auto insurance, comprehensive insurance coverage covers the cost of the car in the event that the vehicle is exposed to damage outside of a typical accident.
What is "car rental" insurance?
With regards to auto insurance, car rental insurance refers to the part of your insurance policy which covers you in the event that you are actually renting a car. Most policies do extend some degree of coverage, but it's probably most important that you check your particular insurance policy to see if you are covered whilst renting a car in case of any sort of damage which might happen while you are using that vehicle.
What is "umbrella liability coverage" insurance?
Umbrella liability coverage is supplemental coverage that acts, as the word says, as an umbrella over your existing policies. It therefore protects you from unscrupulous lawsuits, or massive situations that drain your original funding from your insurance policy and then go after your own personal assets for payment.
What is "uninsured motorist" coverage?
With regards to auto insurance, in many states, uninsured motorist coverage is required by law and for a very good reason. In essence there are a lot of people out there driving without any sort of insurance whatsoever. If you are hit by one of those people they can basically walk away from the scene, and you are left with the responsibility and the cost of getting your vehicle back to shape. Uninsured motorist coverage is very important because it protects you from the liability if somebody who is uninsured that hits you. You are then covered to the cost for getting your property fixed and any sort of bodily injury as well.
