Whether you’re seeking auto insurance coverage for the first time or shopping around for a new policy that provides better rates and protections, the process can be confusing and tedious.
The good news is that you can better navigate finding auto insurance in Tallahassee (or wherever you call home) by familiarizing yourself with a few key terms.
While the list below is by no means comprehensive, it will help you understand the coverage that meets your needs and budget.
Comprehensive coverage typically pays for vehicle repairs after miscellaneous incidents like weather damage or animal collisions. It also covers non-accident-related issues like fires and car theft.
This type of policy covers the costs of repairing your vehicle if you’re involved in a single-car accident or cause a crash.
The declarations page highlights key details about your policy and coverages, including things like your address, the drivers covered on the policy, and your vehicle’s VIN. It will also list your liability limits, coverages, and deductibles.
The deductible is the amount you must pay when making a claim under your policy.
For instance, if your deductible is $1,000 and repair costs for an accident are $5,000, you’d receive $4,000 from the insurance company and have to pay the difference yourself. The higher your deductible, the lower your monthly premium, and vice versa.
Note: your deductible doesn’t apply if the claim falls on someone else’s policy.
Gap coverage pays the difference between the balance of your auto loan and the actual value of your vehicle. It goes into effect if your vehicle is stolen or totaled during an accident.
For example, imagine you owe $30,000 on your vehicle, but its market value is only $27,000 before it’s totaled. In this scenario, your insurance company would pay $27,000 to your lender, and the gap coverage would pay the remaining $3,000.
Liability insurance covers the costs of others’ medical care in the event that you cause a crash. This coverage will also pay for any property damage you caused and your legal expenses if you’re sued.
Uninsured motorist coverage pays for your repair expenses and medical treatment if you’re struck by an uninsured motorist. Depending on the terms of your policy, you may or may not have to pay a deductible for this coverage.
Having uninsured motorist coverage is vital, as you’ll be left financially vulnerable without it.
There’s an important distinction between an insurance company and an insurance agency.
Your insurance company is the business that actually insures your vehicle. If you file a claim, they’ll be the ones that process it and pay for vehicle repairs or medical costs. An insurance agency, on the other hand, acts as a broker that helps you find coverage.
A broker can quickly compare rates from multiple insurance companies to find the best price and coverage and help you determine the level of coverage you need based on where you live, what you drive, and other factors.
For instance, an insurance agency in Tallahassee, Florida, will be familiar with coverage requirements in the Sunshine State. That’s why you should consider working with an agency that specializes in policies for your home state.
The above description(s) provide(s) a brief overview of the terms and phrases used within the insurance industry. These definitions are not applicable in all states or for all insurance and financial products. This is not an insurance contract. Other terms, conditions and exclusions apply. Please read your official policy for full details about coverages. These definitions do not alter or modify the terms of any insurance contract. If there is any conflict between these definitions and the provisions of the applicable insurance policy, the terms of the policy control.