Car Insurance Primer - Terms You Should Know

Some form of car insurance is required in virtually every state of the United States, so if you're driving you probably already have car insurance. However, not everyone takes the time to really learn about their coverage. If you're feeling like your reading car insurance statement is like trying to read greek, here's a few important terms you should know.

Car Insurance Terms - Premium

Premium is the amount you pay for your car insurance on a regular basis. Most car insurance companies bill on a monthly, or bi-yearly basis. Premiums range from $400 every 6 months, to several thousand, depending on the driver and and vehicle being driven. Car insurance companies usually offer a better deal for those willing to pay in advance for their insurance.

Car Insurance Terms - Property Damage Coverage

If your car insurance includes property coverage, it means that if the vehicle being covered does damage to someone else's property, the insurance company will cover the costs to a pre-defined extent. Usually this covers damage to another car as a result of an accident, but it can also cover non-moving items such as buildings, fences or other structures.

Car Insurance Terms - Bodily Injury Liability Coverage

Bodily Injury Liability coverage, in terms of car insurance, covers injury done to others while driving. This type of liability insurance is required by most states in the country, and for two good reasons: 1) Medical costs are extremely high, and 2) You run a good risk of being sued by the injured party. Without this kind of liability car insurance, you could end up losing everything you have to a lawsuit.

Car Insurance Terms - Personal Injury Protection

Personal Injury Protection in car insurance covers any damage done to yourself or to the passengers of your vehicle in the case of a car accident. This type of coverage is nearly as important as Bodily Injury Liability for the same reasons. You could be sued, and medical costs are very high.

Car Insurance Terms - Comprehensive Coverage

Comprehensive car insurance covers pretty much everything else. If your car is broken into and your CDs are stolen, this type of car insurance will cover it. Other kinds of damage are covered as well, including floods, fire, earthquakes, damage from animals, and hail, among other things.