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Top Glossary Terms for Auto Insurance

  1. Premium: The amount you pay for your auto insurance coverage, typically on a monthly or annual basis.
  2. Deductible: The initial out-of-pocket amount you're responsible for before your insurance coverage begins.
  3. Liability Insurance: Coverage that pays for bodily injury and property damage you cause to others in an at-fault accident.
  4. Collision Coverage: Insurance that pays for repairs to your own vehicle in the event of an accident, regardless of fault.
  5. Comprehensive Coverage: Insurance that covers damage to your vehicle caused by factors other than a collision, such as theft, vandalism, or natural disasters.
  6. Uninsured/Underinsured Motorist Coverage: Protection in case you're involved in an accident with a driver who has no insurance or insufficient insurance.
  7. Policyholder: The person who owns the auto insurance policy.
  8. Claim: A formal request to your insurance company for payment after an accident or loss.
  9. Exclusion: Specific circumstances or events not covered by your auto insurance policy.
  10. Coverage Limit: The maximum amount your insurance policy will pay for a covered loss.
  11. No-Fault Insurance: A system in some states where each driver's insurance pays for their own injuries and damages, regardless of fault.
  12. Rental Reimbursement: An optional coverage that pays for the cost of renting a replacement vehicle while your car is being repaired after an accident.
  13. SR-22: A form filed with the state to provide proof of financial responsibility, often required for drivers with a history of violations or accidents.
  14. Full Coverage: A term used to describe a combination of liability, collision, and comprehensive coverage.
  15. Underwriting: The process of evaluating an applicant's risk and setting the appropriate premium for their auto insurance policy.
  16. Policy Term: The length of time your insurance policy is in effect, often six or twelve months.
  17. Endorsement/Rider: A modification or addition to your insurance policy to provide additional coverage for specific items or situations.
  18. Gap Insurance: Coverage that pays the difference between the actual cash value of your vehicle and the amount you owe on a car loan or lease.
  19. Accident Forgiveness: A feature that prevents an increase in your insurance premium after your first at-fault accident.
  20. Anti-Theft Discount: A discount applied to your premium for having anti-theft devices installed in your vehicle.

These are some of the key terms you might encounter when dealing with auto insurance. The specific terms and their meanings can vary depending on your insurance provider and the state or country in which you live.

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