Car Insurance Terms – A Glossary

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Buying car insurance can be confusing. Make things easier on yourself by doing a little homework before you start; familiarize yourself with the auto insurance laws in your state and the types of auto insurance coverage that make up a complete policy.

Here are some terms you should know:

Collision – Collision insurance covers vehicle damage caused when your car hits another vehicle or object.

Comprehensive – Comprehensive insurance covers damage to your vehicle from any cause other than collision, like vandalism and natural disaster.

Liability – Liability insurance covers accidental damage to:
1.  Property including vehicles;
2. Bodily injury including medical costs, pain and suffering and lost income;
3. Court costs and legal defense for suits relating to the accident.

Medical – Covers medical costs that result from a car accident.

Person Injury Protection (PIP) – PIP covers medical expenses that result from a car accident for the insured driver only.

Rental Reimbursement – Rental Reimbursement is exactly what it sounds like, this kind of coverage reimburses you for the cost of a rental car during repairs to your car from an auto accident.

Underinsured Motorist – Underinsured Motorist insurance pays for the remaining damages if you are in an accident caused by someone’s whose liability insurance is not enough to cover the full cost of the damage to your vehicle.

Uninsured Motorist – Uninsured Motorist insurance pays for damage to your car caused by an uninsured driver.

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