When you’re in the market for a new Pennsylvania auto insurance policy it is a good idea to educate yourself on the terms auto insurance companies use. This article will help you learn all you need to know about the lingo used by auto insurance companies when it comes to policies and coverage.

Policy:

This is what you are purchasing and is often known as an insurance policy. It includes your signed contract and is normally a term of 6 months. You will need to renew your policy every 6 months.

Premium:

This is the amount you pay monthly or bi-monthly for your auto insurance. If you miss a payment on your Pennsylvania auto insurance premium you might risk your policy being cancelled and you will be left without coverage. You might also have to pay a higher premium the next time you purchase insurance.

Deductible:

This is the amount of money you agree to pay in order to claim an accident or theft of your vehicle. This has to be paid before the insurance company will pay on any claim made by you. If your deductible is $500 and the damages to your vehicle are $1000, you will pay the $500 first and then your insurance company will pay the remaining balance. Unlike health insurance, the deductible renews with each claim rather than staying paid throughout your policy.

Covered Person:

This refers to the person or people who are listed on your policy and are covered by your insurance policy. These people are eligible for benefits if a claim is made and accepted.

Benefit:

This is the amount that the Pennsylvania auto insurance company will pay to you or your dependents or beneficiaries if you file a claim that is covered by your insurance.

Claim:

A claim is what the policy holder or covered person does when there is an accident or theft of their car. The insurance company will evaluate your claim and pay you the damages after you have completed your deductible requirement.

Endorsements:

An endorsement is any kind of special change that you make to your policy which modifies your insurance contract. This might include a different deductible, a new driver or a different car.

Exclusions:

These are listed in the Pennsylvania auto insurance policy documents and are the restrictions that the insurance company will not cover. This normally includes a person driving your car who isn’t insured or you driving a car that you aren’t insured on. Reading your policy documents carefully will ensure you won’t be surprised when you try to make a claim on an excluded event.

There are many more terms that you might need to know about before you sign a policy for Pennsylvania auto insurance, these include indemnity, limits, tort, lapse in coverage, claims adjuster, comprehensive, bodily injury liability, property damage liability, collision, gap insurance, medical payments, personal injury protection (PIP), Uninsured/Underinsured motorist coverage, “No Fault” coverage, Towering Costs, and Fleet Policy. Make sure you find out what each means before you purchase your next Pennsylvania auto insurance policy!

Author Bio: 1984 University of Pitt Grad
1986 Founded Williams Agency
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