Car smart: 19 car insurance terms that you definitely need to know

Getting car insurance is just as important as the car registration itself; here are most of the terms that are used. Knowing these terms; will equip car owners with everything they need to know about it!

For most car owners; getting car insurance is needed, and it can’t be avoided at all. When getting the car insured; there will be car insurance terms that must be understood! It outlines the importance of car insurance terms and all you need to know; which should be important for the owner of the car to be insured.

Not knowing these terms is not an option because all aspects of the policy; should be covered by these terms. Familiarity will with car insurance terms, and all you need to know is the cornerstone of responsible vehicle ownership too.

Car insurance is especially needed for car crash

If there’s any point missed; just because a term or two is not clear with the policy should be avoided. When it comes to claiming from the insurer; having all these terms down pat and well understood is very crucial. Much so when getting the paperwork done, and avoiding double-dealing on the part of the insurer.

For one thing; ignorance about these car insurance terms and all you need to know will be a formula for disaster! If it is impressed that the insurer can’t double talk because all aspects of the policy are clear and understood; is protection to get all that’s due to the policyholder. That's why Philkotse.com is here to help you out!

1. Fault and limits of the policy

Most motorist should know that fault and limits of the policy are the amounts paid for the claims. The exact amount will vary and how it is calculated.

At fault

This is the one who caused the accident is at “fault”, or the policy owner himself. The one at fault will have to pay or their insurance companies, or whichever is applicable to everything.

Getting car insurance is just as important as the car registration itself

Limits of the liability

It refers to the amount that will be paid by the insurance company paid to the policyholder or the car that is damaged accidentally. It should be clarified how much is covered or whether limits can be increased with higher premiums.

>>> Read more: Best car insurance companies for teens & college students in the Philippines.

2. Terms that cover kinds of injury

Without car insurance; you’re a sitting duck and having it is a good back up too! Whether the accident was caused by the policy owner or another third party, these terms cover what is covered by the policy itself.

Personal injury protection

This covers payment for medical and funerary costs that result from an accident. Those covered by it; is the policyholder, passengers in the car, or other third parties that have been maimed or mangled because of the accident. Most costs will depend on the policy of the insured.

This covers payment for medical and funerary costs that result from an accident

Payments for medical coverage

This provided for in the policy and will have limits too, but can be raised with higher premiums for fewer costs for the driver. Consult the policy for the exact amounts paid or what may be added; if it isn’t enough to cover it

Motorists with uninsured coverage

Some motorists will not have any insurance at all. They should pay expenses or help with part of them; if they aren’t able to afford it. Those who should be compensated for include the policyholder, passengers, and relatives who live with the policyholder/

Motorists with underinsured coverage

It’s better than uninsured motorists because they have insurance that can partly cover expenses from accidents, and the policyholder can dictate the limits too. It covers the same individuals as with uninsured coverage.

>>> Also read: What insurance covers the damage of natural disasters and how does it work?

3. Terms that affect payout and premiums

These are important to know because it determines how much is receivable for all premiums and claims. It should be cleared up to know how much is paid for claims; also how much is really due.

Depreciation

Simply put; this is how much the value of the car is affected as it gets older. Cars with good depreciation won’t be sold at a lower price than those with better depreciation. It’s called resale value in ordinary terms of course.

Continuously insured

All the premiums are paid on time; without any penalties for late payments. For the entire period of the policy; it is insured until the end of the term indicated.

All the premiums are paid on time; without any penalties for late payments

Endorsement or rider

Usually, an agreement that should add or subtract to the benefits as indicated by the insurance policy.

Roadside Assistance

Some policies may come with this service but should be indicated though, whether free or not!

Surcharge

When surcharges are added; it means the policyholder is delinquent because of at-fault accidents or determined as a certified risk.

>>> You might concern: 10 must-know things to consider before buying car insurance in the Philippines.

4. Basic terms

Every policyholder should know these basic terms when contracting car insurance, and ignorance is no excuse too and a loss too.

Premium

The fee paid to be covered and be insured from accidents. It can be lowered or increased due to a number of factors during the term covered by the policy.

The fee paid to be covered and be insured from accidents

Deductible

If the premium is low; then expect to pay more out of pocket other dues called deductibles.

Named Insured/Primary Driver

Usually, one who is covered by the policy from day one to the end of it.

Policy Period or Term

The duration that the policy is in effect; when it ends, there will no protection anymore.

When getting the car insured; there will be car insurance terms that must be understood

5. Kinds of car insurance

There are several kinds of auto insurance to procure and here are some of them. Motorist should opt for the best insurance for better coverage.

Liability Insurance

This is would cover property damage and expenses for injuries caused to a third party. It usually has lower coverage payments though, and adding from the pocket is inevitable.

Compulsory Third Party Insurance

All cars in the Philippines are required to have it, to pay for the cost of accidents involving a third party.

Collision Coverage

Any accidents caused by the collision and other car-related accidents are covered by this policy.

>>> For your explanation: A detailed explanation of car insurance and how it works.

Any accidents caused by the collision and other car-related accidents are covered by this policy

Comprehensive Coverage

Most should opt for this coverage because it covers all accidents and even acts of God if indicated in the policy. It covers all possible expenses through the premiums may be heftier, but more protected too.

Wrapping up!

Car owners should be aware of these car insurance terms and all you need to know how to choose what is right for them. All these terms will give more leverage for the insurance policy; that is chosen and a smart move as well!