Insurance can be confusing. If it isn’t something that we deal with on a regular basis, the terminology can leave us even more befuddled. The following are terms that are used in “insurance talk” and what they mean to you.
Collision Coverage – This will cover your vehicle for physical damage caused by a collision with another vehicle or object.
Comprehensive Coverage – This is for non-collision-related damage that results from a covered loss such as theft, vandalism, hitting an animal, or falling objects like tree branches or hail.
Liability Coverage – This covers damage that your vehicle does to others and their property. If a person has liability-only coverage, their vehicle is not covered for a collision or comprehensive claim.
Premium – The amount you pay for your insurance coverage. This can be paid yearly, quarterly, or monthly depending upon your insurance company and the plan you select.
Deductible – The portion you are responsible for on a covered loss, as opposed to the portion the insurance company is paying. This is something that you select when you are choosing your insurance. Common deductibles range between $250-1000. This is paid to the shop when repairs are completed.
Betterment – This is an improvement to the value of what was originally on the vehicle. This happens most of the time with tires and batteries. If a tire or battery needs to be replaced, there can be a betterment charged to the owners, which is usually a percentage of the cost.
Rental Car Coverage – This will provide rental coverage for a specific amount of days while your vehicle is being repaired. This is an additional item to add to your insurance coverage for a minimal amount of money that, when needed, is really beneficial.
It is important to understand what type of insurance you have and what it covers. This is an abbreviated list of what I would consider the most important terms when there is a property damage loss. If you are unsure what your coverage is, ask your insurance agent to go over what types of coverage you have.