Fault is how responsible someone is for an accident. It’s kind of the whodunit of car insurance – if you’re at fault, you’re probably the one who caused the accident. Fault is kind of a big deal because it determines whose insurance company is going to pay out for an accident. (Or whose auto insurance is going to pay for what part of the damage.)<\/p>\n
This is something you need to pay attention to when you read through your policy or buy your auto insurance.<\/p>\n
A covered loss is something your insurance will pay for if it happens to you. It could be damage to you, your vehicle, another person, or another person’s property. Basically, your policy outlines which losses (or causes of damage) will be covered by your insurance. Believe it or not, not everything is covered by your car insurance. And what’s covered can depend on what coverages you choose to purchase.<\/p>\n
The declaration page of your policy gives you a handy little snapshot of what your insurance policy looks like. It gives you a nifty summary of the coverages you have for the cars on your policy.<\/p>\n
For example, the “dec page” (it needed a nickname, right?) usually includes:<\/p>\n
So, if you’re just looking to see what kind of coverage you have, you can take a look at your dec page. It’ll give you a high-level overview of your insurance. Helpful, right?<\/p>\n
The deductible is the not-so-fun part of our Car Insurance 101 guide. Your deductible is the amount that you agree to pay out of pocket if you have a claim. Basically, you have your portion of the claim and insurance has theirs (if it makes you feel better, their portion will probably be way more than yours.)<\/p>\n
Here’s an example:<\/p>\n
You have a $500 deductible for your comprehensive insurance<\/a>. A tree falls on your car and causes $4,000 of damage. You would pay $500 and insurance would pay $3,500.<\/p>\n Your insurance will come with a limit of coverage, meaning the maximum amount that insurance will pay for specific coverages. It’s essentially how much insurance you’ve bought. Each state has its own requirements for the “minimum limits” of insurance that a driver has to carry to legally drive. It’s really important to make sure you pay attention to your limits of coverage and get enough insurance to truly protect you if you have a serious accident – and you might want to carry more than the state minimum level of car insurance<\/a>. Not that we want to sound all doom-and-gloom or anything, but a severe accident can happen in the blink of an eye. Car insurance is a financial safety net (another point we felt compelled to make in our Car Insurance 101 guide!)<\/p>\n An MVR (Motor Vehicle Report) is a record held by the state that details your driving history from the past few years. It can include your license status, traffic violations, license suspensions, and accidents. Many insurance companies use them when they’re setting car insurance premiums because it gives them an idea of how risky you are to insure. Safe drivers tend to get lower insurance rates (a fundamental Car Insurance 101 concept.)<\/p>\n The named insured is just the primary person that the insurance policy is issued to. It’s who the policy covers.<\/p>\n This is what you use the car for most of the time. Are you using it to commute to work? Are you using it to run errands and drive around town (using the car for pleasure?) Are you using it for business? (You’ll need to talk to your agent to make sure you have the proper coverage for a business vehicle.) Or are you using the vehicle on a farm?<\/p>\n Premium isn’t just a fancy type of gas for your car.<\/p>\n Your premium is the amount of money you pay for your car insurance. It’s the price tag of your car insurance policy. Your premium depends on many different factors, including:<\/p>\nWhat is the limit of coverage?<\/h3>\n
What is an MVR?<\/h3>\n
Who is the named insured?<\/h3>\n
What is primary use?<\/h3>\n
What is a car insurance premium?<\/h3>\n
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